A planned economy is a type of
economic system
An economic system, or economic order, is a system of Production (economics), production, resource allocation and Distribution (economics), distribution of goods and services within a society or a given geographic area. It includes the combinati ...
where
investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
,
production
Production may refer to:
Economics and business
* Production (economics)
* Production, the act of manufacturing goods
* Production, in the outline of industrial organization, the act of making products (goods and services)
* Production as a stati ...
and the allocation of
capital good
The economic concept of a capital good (also called complex product systems (CoPS),H. Rush, "Managing innovation in complex product systems (CoPS)," IEE Colloquium on EPSRC Technology Management Initiative (Engineering & Physical Sciences Researc ...
s takes place according to economy-wide economic plans and production plans. A planned economy may use
centralized
Centralisation or centralization (see spelling differences) is the process by which the activities of an organisation, particularly those regarding planning and decision-making, framing strategy and policies become concentrated within a particu ...
,
decentralized
Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.
Conce ...
,
participatory
Citizen Participation or Public Participation in social science refers to different mechanisms for the public to express opinions—and ideally exert influence—regarding political, economic, management or other social decisions. Participato ...
or
Soviet-type forms of
economic planning
Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources b ...
. The level of
centralization
Centralisation or centralization (see spelling differences) is the process by which the activities of an organisation, particularly those regarding planning and decision-making, framing strategy and policies become concentrated within a particu ...
or
decentralization
Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.
Conce ...
in decision-making and participation depends on the specific type of planning mechanism employed.
Socialist states
Several past and present states have declared themselves socialist states or in the process of building socialism. The majority of self-declared socialist countries have been Marxist–Leninist or inspired by it, following the model of the Sovi ...
based on the Soviet model have used central planning, although a minority such as the former
Socialist Federal Republic of Yugoslavia
The Socialist Federal Republic of Yugoslavia, commonly referred to as SFR Yugoslavia or simply as Yugoslavia, was a country in Central and Southeast Europe. It emerged in 1945, following World War II, and lasted until 1992, with the breakup of Yug ...
have adopted some degree of
market socialism
Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...
.
Market abolitionist
Market abolitionism is the belief that the economic market should be completely eliminated from society. Market abolitionists argue that markets are ethically abhorrent, antisocial and fundamentally incompatible with long term human and environ ...
socialism replaces
factor market
In economics, a factor market is a market where factors of production are bought and sold. Factor markets allocate factors of production, including land, labour and capital, and distribute income to the owners of productive resources, such as wage ...
s with direct calculation as the means to coordinate the activities of the various
socially-owned economic enterprises that make up the economy. More recent approaches to socialist planning and allocation have come from some economists and computer scientists proposing planning mechanisms based on advances in computer science and information technology.
Planned economies contrast with
unplanned economies
An unplanned economy is an economy where economic decisions regarding production, investment and resource allocation are not linked together through conscious economic planning. This may refer to subsistence-level economies, systems of barter o ...
, specifically
market economies
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers are ...
, where autonomous firms operating in
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
s make decisions about production, distribution, pricing and investment. Market economies that use
indicative planning
Indicative planning is a form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market economies by coordination of private and public investment through forecasts and output targets. The res ...
are variously referred to as
planned market economies
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economies ...
,
mixed economies
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economies ...
and
mixed market economies
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economies ...
. A
command economy
A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, part ...
follows an
administrative-command system
The administrative-command system (russian: Административно-командная система, Administrativno-komandnaya sistema), also known as the command-administrative system, is the system of management of an economy of a state ...
and uses Soviet-type economic planning which was characteristic of the former
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
and
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
before most of these countries converted to market economies. This highlights the central role of hierarchical administration and public ownership of production in guiding the allocation of resources in these economic systems.
Overview
In the
Hellenistic
In Classical antiquity, the Hellenistic period covers the time in Mediterranean history after Classical Greece, between the death of Alexander the Great in 323 BC and the emergence of the Roman Empire, as signified by the Battle of Actium in ...
and post-Hellenistic world, "compulsory state planning was the most characteristic trade condition for the
Egyptian
Egyptian describes something of, from, or related to Egypt.
Egyptian or Egyptians may refer to:
Nations and ethnic groups
* Egyptians, a national group in North Africa
** Egyptian culture, a complex and stable culture with thousands of years of ...
countryside, for
Hellenistic India, and to a lesser degree the more barbaric regions of the
Seleucid
The Seleucid Empire (; grc, Βασιλεία τῶν Σελευκιδῶν, ''Basileía tōn Seleukidōn'') was a Greek state in West Asia that existed during the Hellenistic period from 312 BC to 63 BC. The Seleucid Empire was founded by the ...
, the
Pergamenian, the southern
Arabia
The Arabian Peninsula, (; ar, شِبْهُ الْجَزِيرَةِ الْعَرَبِيَّة, , "Arabian Peninsula" or , , "Island of the Arabs") or Arabia, is a peninsula of Western Asia, situated northeast of Africa on the Arabian Plate. ...
n, and the
Parthian Parthian may be:
Historical
* A demonym "of Parthia", a region of north-eastern of Greater Iran
* Parthian Empire (247 BC – 224 AD)
* Parthian language, a now-extinct Middle Iranian language
* Parthian shot, an archery skill famously employed by ...
empires". Scholars have argued that the
Incan
The Inca Empire (also known as the Incan Empire and the Inka Empire), called ''Tawantinsuyu'' by its subjects, (Quechua for the "Realm of the Four Parts", "four parts together" ) was the largest empire in pre-Columbian America. The admin ...
economy was a flexible type of command economy, centered around the movement and utilization of labor instead of goods. One view of
mercantilism
Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...
sees it as involving planned economies.
The Soviet-style planned economy in Soviet Russia evolved in the wake of a continuing existing
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
war-economy as well as other policies, known as
war communism
War communism or military communism (russian: Военный коммунизм, ''Voyennyy kommunizm'') was the economic and political system that existed in Soviet Russia during the Russian Civil War from 1918 to 1921.
According to Soviet histo ...
(1918–1921), shaped to the requirements of the
Russian Civil War
, date = October Revolution, 7 November 1917 – Yakut revolt, 16 June 1923{{Efn, The main phase ended on 25 October 1922. Revolt against the Bolsheviks continued Basmachi movement, in Central Asia and Tungus Republic, the Far East th ...
of 1917–1923. These policies began their formal consolidation under an official organ of government in 1921, when the Soviet government founded
Gosplan
The State Planning Committee, commonly known as Gosplan ( rus, Госплан, , ɡosˈpɫan),
was the agency responsible for central economic planning in the Soviet Union. Established in 1921 and remaining in existence until the dissolution of ...
. However, the period of the
New Economic Policy
The New Economic Policy (NEP) () was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient. Lenin characterized the NEP in 1922 as an economic system that would include "a free market and capitalism, ...
( to intervened before the planned system of regular
five-year plans started in 1928.
Nazi Germany
Nazi Germany (lit. "National Socialist State"), ' (lit. "Nazi State") for short; also ' (lit. "National Socialist Germany") (officially known as the German Reich from 1933 until 1943, and the Greater German Reich from 1943 to 1945) was ...
's
Four Year Plan
The Four Year Plan was a series of economic measures initiated by Adolf Hitler in Nazi Germany in 1936. Hitler placed Hermann Göring in charge of these measures, making him a Reich Plenipotentiary (Reichsbevollmächtigter) whose jurisdiction cut a ...
of 1936 onwards involved elements of state planning in the
Reich economy.
After
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
(1939–1945) France and Great Britain practised
dirigisme
Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role contrary to a merely regulatory interventionist role over a market economy. As an economic doctrine, dirigisme is the opposite of ''lai ...
- government direction of the economy through non-coercive means. The Swedish government planned public-housing models in a similar fashion as
urban planning
Urban planning, also known as town planning, city planning, regional planning, or rural planning, is a technical and political process that is focused on the development and design of land use and the built environment, including air, water, ...
in a project called
Million Programme
The Million Programme ( sv, Miljonprogrammet) was an ambitious public housing program implemented in Sweden between 1965 and 1974 by the governing Swedish Social Democratic Party to ensure the availability of affordable, high quality housing t ...
, implemented from 1965 to 1974. Some decentralized participation in economic planning occurred across Revolutionary Spain, most notably in Catalonia, during the
Spanish Revolution of 1936
The Spanish Revolution was a workers' social revolution that began at the outbreak of the Spanish Civil War in 1936 and for two to three years resulted in the widespread implementation of anarchist and, more broadly, libertarian socialist or ...
.
[Wetzel, Tom]
"Workers Power and the Spanish Revolution"
[Dolgoff, Sam, ed. (1974). '']The Anarchist Collectives
''The Anarchist Collectives: Workers’ Self-Management in the Spanish Revolution, 1936–1939'' is a book of perspectives from the Spanish Revolution edited by Sam Dolgoff and published with Free Life Editions in 1974.
Further reading
* ...
'' (1st ed.). Free Life Editions. p. 114. .
Relationship with socialism
While
socialism
Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
is not equivalent to economic planning or to the concept of a planned economy, an influential conception of socialism involves the replacement of capital markets with some form of economic planning in order to achieve ''
ex-ante'' coordination of the economy. The goal of such an economic system would be to achieve conscious control over the economy by the population, specifically so that the use of the
surplus product
Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx in his critique of political economy. Roughly speaking, it is the extra goods produced above the amount needed for a community of workers to ...
is controlled by the producers. The specific forms of planning proposed for socialism and their feasibility are subjects of the
socialist calculation debate
The socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices for ...
.
Computational economic planning
In 1959
Anatoly Kitov
Anatoly Ivanovich Kitov (9 August 1920, Samara - 14 October 2005) was a pioneer of cybernetics in the Soviet Union
Cybernetics in the Soviet Union had its own particular characteristics, as the study of cybernetics came into contact with th ...
proposed a distributed computing system (Project "Red Book", ru , Красная книга) with a focus on the management of the Soviet economy. Opposition from the
Defence Ministry
{{unsourced, date=February 2021
A ministry of defence or defense (see American and British English spelling differences#-ce.2C -se, spelling differences), also known as a department of defence or defense, is an often-used name for the part of a g ...
killed Kitov's plan.
In 1971 the socialist
Allende administration of Chile launched
Project Cybersyn
Project Cybersyn was a Chilean project from 1971 to 1973 during the presidency of Salvador Allende aimed at constructing a distributed decision support system to aid in the management of the national economy. The project consisted of four modul ...
to install a telex machine in every corporation and organisation in the economy for the communication of economic data between firms and the government. The data was also fed into a computer-simulated economy for forecasting. A control room was built for real-time observation and management of the overall economy. The prototype-stage of the project showed promise when it was used to redirect supplies around a trucker's strike, but after CIA-backed
Augusto Pinochet
Augusto José Ramón Pinochet Ugarte (, , , ; 25 November 1915 – 10 December 2006) was a Chilean general who ruled Chile from 1973 to 1990, first as the leader of the Military Junta of Chile from 1973 to 1981, being declared President of ...
led a
coup in 1973 that established a
military dictatorship
A military dictatorship is a dictatorship in which the military exerts complete or substantial control over political authority, and the dictator is often a high-ranked military officer.
The reverse situation is to have civilian control of the m ...
under his rule the program was abolished and Pinochet moved Chile towards a more
liberalized market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
.
In their book ''
Towards a New Socialism
''Towards a New Socialism'' is a 1993 non-fiction book written by Scottish computer scientist Paul Cockshott, co-authored by Scottish economics professor Allin F. Cottrell. The book outlines in detail a proposal for a complex planned socialist e ...
'' (1993), the computer scientist
Paul Cockshott
William Paul Cockshott (born 16 March 1952) is a Scottish computer scientist, Marxian economist and a reader at the University of Glasgow. Since 1993 he has authored multiple works in the tradition of scientific socialism, most notably ''Toward ...
from the
University of Glasgow
, image = UofG Coat of Arms.png
, image_size = 150px
, caption = Coat of arms
Flag
, latin_name = Universitas Glasguensis
, motto = la, Via, Veritas, Vita
, ...
and the economist Allin Cottrell from the
Wake Forest University
Wake Forest University is a private research university in Winston-Salem, North Carolina. Founded in 1834, the university received its name from its original location in Wake Forest, north of Raleigh, North Carolina. The Reynolda Campus, the un ...
claim to demonstrate how a democratically planned economy built on modern computer technology is possible and drives the thesis that it would be both economically more stable than the free-market economies and also morally desirable.
Cybernetics
The use of computers to coordinate production in an optimal fashion has been variously proposed for
socialist economies
Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may t ...
. The Polish economist
Oskar Lange
Oskar Ryszard Lange (27 July 1904 – 2 October 1965) was a Polish economist and diplomat. He is best known for advocating the use of market pricing tools in socialist systems and providing a model of market socialism. He responded to the econo ...
(1904–1965) argued that the computer is more efficient than the market process at solving the multitude of simultaneous equations required for allocating economic inputs efficiently (either in terms of physical quantities or monetary prices).
Salvador Allende
Salvador Guillermo Allende Gossens (, , ; 26 June 1908 – 11 September 1973) was a Chilean physician and socialist politician who served as the 28th president of Chile from 3 November 1970 until his death on 11 September 1973. He was the fir ...
's socialist government pioneered the 1970 Chilean distributed
decision support system
A decision support system (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations and planning levels of an organization (usually mid and higher management) and h ...
Project Cybersyn
Project Cybersyn was a Chilean project from 1971 to 1973 during the presidency of Salvador Allende aimed at constructing a distributed decision support system to aid in the management of the national economy. The project consisted of four modul ...
in an attempt to move towards a decentralized planned economy with the
experimental viable system model of computed organisational structure of autonomous operative units though an
algedonic feedback
The viable system model (VSM) is a model of the organizational structure of any autonomous system capable of producing itself. A viable system is any system organised in such a way as to meet the demands of surviving in the changing environment. On ...
setting and bottom-up participative decision-making in the form of
participative democracy by the Cyberfolk component.
Fictional portrayals
The 1888 novel ''
Looking Backward
''Looking Backward: 2000–1887'' is a utopian science fiction novel by Edward Bellamy, a journalist and writer from Chicopee Falls, Massachusetts; it was first published in 1888.
The book was translated into several languages, and in short o ...
'' by
Edward Bellamy
Edward Bellamy (March 26, 1850 – May 22, 1898) was an American author, journalist, and political activist most famous for his utopian novel ''Looking Backward''. Bellamy's vision of a harmonious future world inspired the formation of numerou ...
depicts a fictional planned economy in a United States around the year 2000 which has become a socialist utopia.
The
World State
World government is the concept of a single political authority with jurisdiction over all humanity. It is conceived in a variety of forms, from tyrannical to democratic, which reflects its wide array of proponents and detractors.
A world gove ...
in
Aldous Huxley
Aldous Leonard Huxley (26 July 1894 – 22 November 1963) was an English writer and philosopher. He wrote nearly 50 books, both novels and non-fiction works, as well as wide-ranging essays, narratives, and poems.
Born into the prominent Huxley ...
's ''
Brave New World
''Brave New World'' is a dystopian novel by English author Aldous Huxley, written in 1931 and published in 1932. Largely set in a futuristic World State, whose citizens are environmentally engineered into an intelligence-based social hierarch ...
'' (1932) and
Airstrip One
In George Orwell's 1949 dystopian novel ''Nineteen Eighty-Four'', the world is divided into three superstates: Oceania, Eurasia and Eastasia, who are all fighting each other in a perpetual war in a disputed area called the Equatorial Front. All ...
in
George Orwell
Eric Arthur Blair (25 June 1903 – 21 January 1950), better known by his pen name George Orwell, was an English novelist, essayist, journalist, and critic. His work is characterised by lucid prose, social criticism, opposition to totalitar ...
's ''
Nineteen Eighty-Four
''Nineteen Eighty-Four'' (also stylised as ''1984'') is a dystopian social science fiction novel and cautionary tale written by the English writer George Orwell. It was published on 8 June 1949 by Secker & Warburg as Orwell's ninth and final ...
'' (1949) provide fictional depictions of command economies, albeit with diametrically opposed aims. The former is a
consumer economy A consumer economy describes an economy driven by consumer spending as a percent of its gross domestic product, as opposed to the other major components of GDP (gross private domestic investment, government spending, and imports netted against expo ...
designed to engender productivity while the latter is a
shortage economy
"Shortage economy" ( pl, gospodarka niedoboru, hu, hiánygazdaság) is a term coined by Hungarian economist János Kornai, who used this term to criticize the old Centrally planned economy, centrally-planned economies of the communist states of th ...
designed as an agent of totalitarian social control. Airstrip One is organized by the euphemistically named Ministry of Plenty.
Other literary portrayals of planned economies include
Yevgeny Zamyatin
Yevgeny Ivanovich Zamyatin ( rus, Евге́ний Ива́нович Замя́тин, p=jɪvˈɡʲenʲɪj ɪˈvanəvʲɪtɕ zɐˈmʲætʲɪn; – 10 March 1937), sometimes anglicized as Eugene Zamyatin, was a Russian author of science fictio ...
's
''We'' (1924), which influenced Orwell's work. Like ''Nineteen Eighty-Four'',
Ayn Rand
Alice O'Connor (born Alisa Zinovyevna Rosenbaum;, . Most sources transliterate her given name as either ''Alisa'' or ''Alissa''. , 1905 – March 6, 1982), better known by her pen name Ayn Rand (), was a Russian-born American writer and p ...
's dystopian 1938 story
''Anthem'' offered an artistic portrayal of a command economy that was influenced by ''We''. The difference is that it was a
primitivist
Primitivism is a mode of aesthetic idealization that either emulates or aspires to recreate a "primitive" experience. It is also defined as a philosophical doctrine that considers "primitive" peoples as nobler than civilized peoples and was an o ...
planned economy as opposed to the advanced technology of ''We'' or ''Brave New World''.
Central planning
Advantages
The government can harness
land
Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various islan ...
,
labor
Labour or labor may refer to:
* Childbirth, the delivery of a baby
* Labour (human activity), or work
** Manual labour, physical work
** Wage labour, a socioeconomic relationship between a worker and an employer
** Organized labour and the labour ...
, and
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
to serve the economic objectives of the state. Consumer demand can be restrained in favor of greater capital investment for economic development in a desired pattern. In international comparisons, state-socialist nations compared favorably with capitalist nations in health indicators such as infant mortality and life expectancy. However, the reality of this, at least regarding infant mortality, varied depending on whether official Soviet statistics or WHO definitions were used. In Socialist China under Mao China's growth in life expectancy between 1950 and 1980 ranks as among the most rapid sustained increases in documented global history.
The state can begin building massive heavy industries at once in an underdeveloped economy without waiting years for capital to accumulate through the expansion of light industry and without reliance on external financing. This is what happened in the Soviet Union during the 1930s when the government forced the share of
gross national income
The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
dedicated to private consumption down from 80% to 50%. As a result of this development, the Soviet Union experienced massive growth in heavy industry, with a concurrent massive contraction of its agricultural sector due to the labor shortage.
Disadvantages
Economic instability
Studies of command economies of the
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
in the 1950s and 1960s by both American and Eastern European economists found that contrary to the expectations of both groups they showed greater fluctuations in
output
Output may refer to:
* The information produced by a computer, see Input/output
* An output state of a system, see state (computer science)
* Output (economics), the amount of goods and services produced
** Gross output in economics, the value of ...
than market economies during the same period.
Inefficient resource distribution
Critics of planned economies argue that planners cannot detect consumer preferences, shortages and surpluses with sufficient accuracy and therefore cannot efficiently co-ordinate production (in a
market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
, a
free price system
A free price system or free price mechanism (informally called ''the price system'' or ''the price mechanism'') is a mechanism of resource allocation that relies upon prices set by the interchange of supply and demand. The resulting price signals ...
is intended to serve this purpose). This difficulty was notably written about by economists
Ludwig von Mises
Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and Sociology, sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberali ...
and
Friedrich Hayek
Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...
, who referred to subtly distinct aspects of the problem as the
economic calculation problem
The economic calculation problem (sometimes abbreviated ECP) is a criticism of using economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article "Eco ...
and
local knowledge problem
In economics, the local knowledge problem is the argument that the data required for rational economic planning are distributed among individual actors and thus unavoidably exist outside the knowledge of a central authority.
Friedrich Hayek's des ...
, respectively.
[Hayek, Friedrich A. (1945). " The Use of Knowledge". ''American Economic Review''. XXXV: 4. pp. 519-30.] These distinct aspects were also present in the economic thought of
Michael Polanyi
Michael Polanyi (; hu, Polányi Mihály; 11 March 1891 – 22 February 1976) was a Hungarian-British polymath, who made important theoretical contributions to physical chemistry, economics, and philosophy. He argued that positivism supplies ...
.
Whereas the former stressed the theoretical underpinnings of a market economy to
subjective value theory
The subjective theory of value is an economic theory which proposes the idea that the value of any good is not determined by the utility value of the object, nor by the cumulative value of components or labour needed to produce or manufacture it, ...
while attacking the
labor theory of value
The labor theory of value (LTV) is a theory of value that argues that the economic value of a good or service is determined by the total amount of " socially necessary labor" required to produce it.
The LTV is usually associated with Marxian e ...
, the latter argued that the only way to satisfy individuals who have a constantly changing hierarchy of needs and are the only ones to possess their particular individual's circumstances is by allowing those with the most knowledge of their needs to have it in their power to use their resources in a competing marketplace to meet the needs of the most consumers most efficiently. This phenomenon is recognized as
spontaneous order
Spontaneous order, also named self-organization in the hard sciences, is the spontaneous emergence of order out of seeming chaos. The term "self-organization" is more often used for physical changes and biological processes, while "spontaneous o ...
. Additionally, misallocation of resources would naturally ensue by redirecting capital away from individuals with direct knowledge and circumventing it into markets where a coercive monopoly influences behavior, ignoring market signals. According to
Tibor Machan
Tibor Richard Machan (; 18 March 1939 – 24 March 2016) was a Hungarian-American philosopher. A professor emeritus in the department of philosophy at Auburn University, Machan held the R. C. Hoiles Chair of Business Ethics and Free Enterprise ...
, "
thout a market in which allocations can be made in obedience to the law of supply and demand, it is difficult or impossible to funnel resources with respect to actual human preferences and goals".
Suppression of economic democracy and self-management
Economist
Robin Hahnel
Robin Eric Hahnel (born March 25, 1946) is an American economist and professor emeritus of economics at American University. He was a professor at American University for many years and traveled extensively advising on economic matters all over t ...
, who supports
participatory economics
Participatory economics, often abbreviated Parecon, is an economic system based on participatory decision making as the primary economic mechanism for allocation in society. In the system, the say in decision-making is proportional to the impact ...
, a form of
socialist
Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
decentralized planned economy, notes that even if central planning overcame its inherent inhibitions of incentives and innovation, it would nevertheless be unable to maximize economic democracy and self-management, which he believes are concepts that are more intellectually coherent, consistent and just than mainstream notions of economic freedom.
Furthermore, Hahnel states:
Combined with a more democratic political system, and redone to closer approximate a best case version, centrally planned economies no doubt would have performed better. But they could never have delivered economic self-management, they would always have been slow to innovate as apathy and frustration took their inevitable toll, and they would always have been susceptible to growing inequities and inefficiencies as the effects of differential economic power
Economic power refers to the ability of countries, businesses or individuals to improve living standards. It increases their ability to make decisions on their own that benefit them. Scholars of international relations also refer to the economic p ...
grew. Under central planning neither planners, managers, nor workers had incentives to promote the social economic interest. Nor did impeding markets for final goods to the planning system enfranchise consumers in meaningful ways. But central planning would have been incompatible with economic democracy even if it had overcome its information and incentive liabilities. And the truth is that it survived as long as it did only because it was propped up by unprecedented totalitarian political power.
Command economy
Planned economies contrast with command economies in that a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc."
["Planned economy"](_blank)
Dictionary.com. Unabridged (v. 1.1). Random House, Inc. Retrieved 11 May 2008). whereas a command economy necessarily has substantial public ownership of industry while also having this type of regulation.
["Command economy"](_blank)
''Merriam-Webster Online Dictionary''. Retrieved 11 May 2008. In command economies, important allocation decisions are made by government authorities and are imposed by law.
This is contested by some
Marxist
Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...
s. Decentralized planning has been proposed as a basis for
socialism
Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
and has been variously advocated by
anarchists
Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not necessari ...
,
council communists
Council communism is a current of communist thought that emerged in the 1920s. Inspired by the November Revolution, council communism was opposed to state socialism and advocated workers' councils and council democracy. Strong in Germany a ...
,
libertarian Marxists
Libertarian socialism, also known by various other names, is a left-wing,Diemer, Ulli (1997)"What Is Libertarian Socialism?" The Anarchist Library. Retrieved 4 August 2019. anti-authoritarian, anti-statist and libertarianLong, Roderick T. (201 ...
and other
democratic and
libertarian
Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's e ...
socialists who advocate a non-market form of socialism, in total rejection of the type of planning adopted in the
economy of the Soviet Union
The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy wa ...
.
Most of a command economy is organized in a top-down administrative model by a central authority, where decisions regarding investment and production output requirements are decided upon at the top in the
chain of command
A command hierarchy is a group of people who carry out orders based on others' authority within the group. It can be viewed as part of a power structure, in which it is usually seen as the most vulnerable and also the most powerful part.
Milit ...
, with little input from lower levels. Advocates of economic planning have sometimes been staunch critics of these command economies.
Leon Trotsky
Lev Davidovich Bronstein. ( – 21 August 1940), better known as Leon Trotsky; uk, link= no, Лев Давидович Троцький; also transliterated ''Lyev'', ''Trotski'', ''Trotskij'', ''Trockij'' and ''Trotzky''. (), was a Russian ...
believed that those at the top of the chain of command, regardless of their intellectual capacity, operated without the input and participation of the millions of people who participate in the economy and who understand/respond to local conditions and changes in the economy. Therefore, they would be unable to effectively coordinate all economic activity.
Historians have associated planned economies with
Marxist–Leninist state
A communist state, also known as a Marxist–Leninist state, is a one-party state that is administered and governed by a communist party guided by Marxism–Leninism. Marxism–Leninism was the state ideology of the Soviet Union, the Comint ...
s and the
Soviet economic model
Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union (USSR).
The post-''perestroika'' analysis of the system of the Soviet ...
. Since the 1980s, it was recognized that the Soviet economic model did not actually constitute a planned economy in that a comprehensive and binding plan did not guide production and investment. The further distinction of an
administrative-command system
The administrative-command system (russian: Административно-командная система, Administrativno-komandnaya sistema), also known as the command-administrative system, is the system of management of an economy of a state ...
emerged as a new designation in some academic circles for the economic system that existed in the former
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
and
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
, highlighting the role of centralized hierarchical decision-making in the absence of popular control over the economy.
The possibility of a digital planned economy was explored in Chile between 1971 and 1973 with the development of
Project Cybersyn
Project Cybersyn was a Chilean project from 1971 to 1973 during the presidency of Salvador Allende aimed at constructing a distributed decision support system to aid in the management of the national economy. The project consisted of four modul ...
and by
Aleksandr Aleksandrovich Kharkevich
Aleksandr Aleksandrovich Kharkevich (russian: Алекса́ндр Алекса́ндрович Харке́вич ; 3 February, 1904 – 30 March, 1965) was a specialist in radio engineering, electronics, acoustics and instrumentation. He was ...
, head of the Department of Technical Physics in Kiev in 1962.
While both economic planning and a planned economy can be either authoritarian or
democratic and
participatory
Citizen Participation or Public Participation in social science refers to different mechanisms for the public to express opinions—and ideally exert influence—regarding political, economic, management or other social decisions. Participato ...
,
democratic socialist
Democratic socialism is a left-wing political philosophy that supports political democracy and some form of a socially owned economy, with a particular emphasis on economic democracy, workplace democracy, and workers' self-management within a ...
critics argue that command economies are necessarily authoritarian or undemocratic in practice.
Indicative planning
Indicative planning is a form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market economies by coordination of private and public investment through forecasts and output targets. The res ...
is a form of economic planning in market economies that directs the economy through incentive-based methods. Economic planning can be practiced in a decentralized manner through different government authorities. In some predominantly market-oriented and Western mixed economies, the state utilizes economic planning in strategic industries such as the aerospace industry. Mixed economies usually employ
macroeconomic
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
planning while micro-economic affairs are left to the market and price system.
Decentralized planning
A decentralized-planned economy, occasionally called horizontally-planned economy due to its
horizontalism
Horizontalism is an approach to money creation theory pioneered by Basil Moore which states that private bank reserves are not managed by central banks. Instead reserves will be provided on demand at the bank rate set by the central bank. This in ...
, is a type of planned economy in which the
investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
and
allocation
Allocation may refer to:
Computing
* Block allocation map
* C++ allocators
* Delayed allocation
* File allocation table
* IP address allocation
* Memory allocation
* No-write allocation (cache)
* Register allocation
Economics
* Asset alloca ...
of
consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
and
capital goods
The economic concept of a capital good (also called complex product systems (CoPS),H. Rush, "Managing innovation in complex product systems (CoPS)," IEE Colloquium on EPSRC Technology Management Initiative (Engineering & Physical Sciences Researc ...
is explicated accordingly to an economy-wide plan built and operatively coordinated through a distributed network of disparate economic agents or even production units itself. Decentralized planning is usually held in contrast to centralized planning, in particular the
Soviet-type economic planning
Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union (USSR).
The post-''perestroika'' analysis of the system of the Soviet ...
of the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
's command economy, where economic information is aggregated and used to formulate a plan for production, investment and resource allocation by a single central authority. Decentralized planning can take shape both in the context of a
mixed economy
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economi ...
as well as in a
post-capitalist
Post-capitalism is a state in which the economic systems of the world can no longer be described as forms of capitalism. Various individuals and political ideologies have speculated on what would define such a world. According to classical Marx ...
economic system. This form of economic planning implies some process of democratic and participatory decision-making within the economy and within firms itself in the form of
industrial democracy
Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decisi ...
. Computer-based forms of democratic economic planning and coordination between economic enterprises have also been proposed by various
computer scientists
Computer science is the study of computation, automation, and information. Computer science spans theoretical disciplines (such as algorithms, theory of computation, information theory, and automation) to practical disciplines (including th ...
and
radical economists.
Proponents present decentralized and participatory economic planning as an alternative to
market socialism
Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...
for a post-capitalist society.
Decentralized planning has been a feature of
anarchist
Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not neces ...
and
socialist economics
Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may t ...
. Variations of decentralized planning such as
economic democracy
Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbour ...
, industrial democracy and
participatory economics
Participatory economics, often abbreviated Parecon, is an economic system based on participatory decision making as the primary economic mechanism for allocation in society. In the system, the say in decision-making is proportional to the impact ...
have been promoted by various political groups, most notably
anarchists
Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not necessari ...
,
democratic socialists
Democratic socialism is a left-wing political philosophy that supports political democracy and some form of a socially owned economy, with a particular emphasis on economic democracy, workplace democracy, and workers' self-management within ...
,
guild socialists
Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related guilds "in an implied contractual relationship with the public". It originated in the United Kingdom and was at its most influent ...
,
libertarian Marxists
Libertarian socialism, also known by various other names, is a left-wing,Diemer, Ulli (1997)"What Is Libertarian Socialism?" The Anarchist Library. Retrieved 4 August 2019. anti-authoritarian, anti-statist and libertarianLong, Roderick T. (201 ...
,
libertarian socialists
Libertarian socialism, also known by various other names, is a left-wing,Diemer, Ulli (1997)"What Is Libertarian Socialism?" The Anarchist Library. Retrieved 4 August 2019. anti-authoritarian, anti-statist and libertarianLong, Roderick T. (20 ...
,
revolutionary syndicalists
Syndicalism is a Revolutionary politics, revolutionary current within the Left-wing politics, left-wing of the Labour movement, labor movement that seeks to unionize workers Industrial unionism, according to industry and advance their demands t ...
and
Trotskyists
Trotskyism is the political ideology and branch of Marxism developed by Ukrainian-Russian revolutionary Leon Trotsky and some other members of the Left Opposition and Fourth International. Trotsky self-identified as an orthodox Marxist, a re ...
. During the
Spanish Revolution, some areas where anarchist and libertarian socialist influence through the
CNT and
UGT was extensive, particularly rural regions, were run on the basis of decentralized planning resembling the principles laid out by
anarcho-syndicalist
Anarcho-syndicalism is a political philosophy and anarchist school of thought that views revolutionary industrial unionism or syndicalism as a method for workers in capitalist society to gain control of an economy and thus control influence in b ...
Diego Abad de Santillan in the book ''After the Revolution''.
Models
Negotiated coordination
Economist
Pat Devine Pat Devine is a Political radicalism, radical Socialist economics, socialist economist concerned mainly with industrial economics and comparative economic systems.
Devine made one of the most thorough descriptions of a future Post-capitalism, post- ...
has created a model of decentralized economic planning called "negotiated coordination" which is based upon
social ownership
Social ownership is the appropriation of the surplus product, produced by the means of production, or the wealth that comes from it, to society as a whole. It is the defining characteristic of a socialist economic system. It can take the form o ...
of the
means of production
The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...
by those affected by the use of the assets involved, with the
allocation
Allocation may refer to:
Computing
* Block allocation map
* C++ allocators
* Delayed allocation
* File allocation table
* IP address allocation
* Memory allocation
* No-write allocation (cache)
* Register allocation
Economics
* Asset alloca ...
of
consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
and
capital goods
The economic concept of a capital good (also called complex product systems (CoPS),H. Rush, "Managing innovation in complex product systems (CoPS)," IEE Colloquium on EPSRC Technology Management Initiative (Engineering & Physical Sciences Researc ...
made through a participatory form of decision-making by those at the most localized level of production. Moreover, organizations that utilize
modularity
Broadly speaking, modularity is the degree to which a system's components may be separated and recombined, often with the benefit of flexibility and variety in use. The concept of modularity is used primarily to reduce complexity by breaking a sy ...
in their production processes may distribute problem solving and decision making.
[Kostakis, Vasilis (2019)]
"How to Reap the Benefits of the 'Digital Revolution'? Modularity and the Commons"
''Halduskultuur: The Estonian Journal of Administrative Culture and Digital Governance''. 20 (1): 4–19.
Participatory planning
The planning structure of a decentralized planned economy is generally based on a consumers council and producer council (or jointly, a distributive cooperative) which is sometimes called a
consumers' cooperative
A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members. Such co-operatives operate within the market system, independently of the state, as a fo ...
. Producers and consumers, or their representatives, negotiate the quality and quantity of what is to be produced. This structure is central to
guild socialism
Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related guilds "in an implied contractual relationship with the public". It originated in the United Kingdom and was at its most influent ...
,
participatory economics
Participatory economics, often abbreviated Parecon, is an economic system based on participatory decision making as the primary economic mechanism for allocation in society. In the system, the say in decision-making is proportional to the impact ...
and the economic theories related to
anarchism
Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not necessa ...
.
Practice
Kerala
Some decentralized participation in economic planning has been implemented in various regions and states in
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
, most notably in
Kerala
Kerala ( ; ) is a state on the Malabar Coast of India. It was formed on 1 November 1956, following the passage of the States Reorganisation Act, by combining Malayalam-speaking regions of the erstwhile regions of Cochin, Malabar, South ...
. Local level planning agencies assess the needs of people who are able to give their direct input through the Gram Sabhas (village-based institutions) and the planners subsequently seek to plan accordingly.
Revolutionary Catalonia
Some decentralized participation in economic planning has been implemented across Revolutionary Spain, most notably in Catalonia, during the
Spanish Revolution of 1936
The Spanish Revolution was a workers' social revolution that began at the outbreak of the Spanish Civil War in 1936 and for two to three years resulted in the widespread implementation of anarchist and, more broadly, libertarian socialist or ...
.
Similar concepts in practice
= Community participatory planning
=
The
United Nations
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
has developed local projects that promote participatory planning on a community level. Members of communities take decisions regarding
community development
The United Nations defines community development as "a process where community members come together to take collective action and generate solutions to common problems." It is a broad concept, applied to the practices of civic leaders, activists ...
directly.
See also
*
Adhocracy
Adhocracy is a flexible, adaptable and informal form of organization that is defined by a lack of formal structure that employs specialized multidisciplinary teams grouped by functions. It operates in an opposite fashion to a bureaucracy. The ter ...
*
Communist state
A communist state, also known as a Marxist–Leninist state, is a one-party state that is administered and governed by a communist party guided by Marxism–Leninism. Marxism–Leninism was the state ideology of the Soviet Union, the Comint ...
*
Creative destruction
Creative destruction (German: ''schöpferische Zerstörung'') is a concept in economics which since the 1950s is the most readily identified with the Austrian-born economist Joseph Schumpeter who derived it from the work of Karl Marx and pop ...
*
Critique of political economy
Critique of political economy or critique of economy is a form of Social criticism, social critique that rejects the various social categories and structures that constitute the mainstream discourse concerning the forms and modalities of resourc ...
*
Distributed economy ''Distributed economies'' (DE) is a term that was coined by Allan Johansson et al. in 2005.Johansson A, Kisch P, Mirata M., 2005Distributed economies - A new engine for innovation . Journal of Cleaner Production 2005;13:971-9
Definition
There is no ...
*
Economic equilibrium
In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the ( equilibrium) values of economic variables will not change. For example, in the st ...
*
Economic interventionism
Economic interventionism, sometimes also called state interventionism, is an economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare of ...
*
Inclusive democracy
Inclusive Democracy (ID) is a project that aims for direct democracy; economic democracy in a stateless, moneyless and marketless economy; self-management (democracy in the socio-economic realm); and ecological democracy.
The theoretical p ...
*
Input–output model
In economics, an input–output model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies.Thijs Ten Raa, Input–Output Economics: Theory and App ...
*
Laissez-faire
''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
*
Material balance planning
Material balances are a method of economic planning where material supplies are accounted for in natural units (as opposed to using monetary accounting) and used to balance the supply of available inputs with targeted outputs. Material balancing ...
*
Nationalization
Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
*
Peer-to-peer economy
In capitalism, the sharing economy is a socio-economic system built around the sharing of resources. It often involves a way of purchasing goods and services that differs from the traditional business model of companies hiring employees to produc ...
*
Production for use
Production for use is a phrase referring to the principle of economic organization and production taken as a defining criterion for a socialist economy. It is held in contrast to production for profit. This criterion is used to distinguish commu ...
*
Public ownership
State ownership, also called government ownership and public ownership, is the ownership of an industry, asset, or enterprise by the state or a public body representing a community, as opposed to an individual or private party. Public ownershi ...
*
Resource-based economy
A resource-based or natural-resource-based economy is that of a country whose gross national product or gross domestic product to a large extent comes from natural resources.
Examples
The economies of Gulf Cooperation Council (GCC) countries ...
*
Social peer-to-peer processes
Social peer-to-peer processes are interactions with a peer-to-peer dynamic. These peers can be humans or computers. Peer-to-peer (P2P) is a term that originated from the popular concept of the P2P distributed computer application architecture which ...
*
Steady-state economy
A steady-state economy is an economy made up of a constant stock of physical wealth (capital) and a constant population size. In effect, such an economy does not grow in the course of time. The term usually refers to the national economy o ...
*
Technocracy
Technocracy is a form of government in which the decision-maker or makers are selected based on their expertise in a given area of responsibility, particularly with regard to scientific or technical knowledge. This system explicitly contrasts wi ...
*
Workers' self-management
Workers' self-management, also referred to as labor management and organizational self-management, is a form of organizational management based on self-directed work processes on the part of an organization's workforce. Self-management is a def ...
*
The Venus Project
The Venus Project is a nonprofit organization founded by a Florida-based, architect and social engineer Jacque Fresco. Fresco with his partner Roxanne Meadows founded this organization with a socioeconomic model to develop a resource-based econo ...
; Case studies (Soviet-type economies)
*
Analysis of Soviet-type economic planning
Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union (USSR).
The post-'' perestroika'' analysis of the system of the Soviet ...
*
Eastern Bloc economies
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed d ...
*
Economy of Cuba
The economy of Cuba is a mixed command economy dominated by state-run enterprises. Most of the labor force is employed by the state. In the 1990s, the ruling Communist Party of Cuba encouraged the formation of worker co-operatives and self-empl ...
*
Economy of North Korea
The economy of North Korea is a centrally planned economy, following ''Juche'', where the role of market allocation schemes is limited, although increasing. , North Korea continues its basic adherence to a centralized command economy. With a t ...
*
Five-year plans of the Soviet Union
The five-year plans for the development of the national economy of the Union of Soviet Socialist Republics (USSR) ( rus, Пятилетние планы развития народного хозяйства СССР, ''Pyatiletniye plany razvit ...
*
OGAS
OGAS (russian: Общегосударственная автоматизированная система учёта и обработки информации, "ОГАС", "National Automated System for Computation and Information Processing") was ...
, a plan for creating a computer network to supervise the Soviet economy
*
Project Cybersyn
Project Cybersyn was a Chilean project from 1971 to 1973 during the presidency of Salvador Allende aimed at constructing a distributed decision support system to aid in the management of the national economy. The project consisted of four modul ...
, a project for a computer network controlling the economy of Chile under
Salvador Allende
Salvador Guillermo Allende Gossens (, , ; 26 June 1908 – 11 September 1973) was a Chilean physician and socialist politician who served as the 28th president of Chile from 3 November 1970 until his death on 11 September 1973. He was the fir ...
; Case studies (mixed-market economies)
*
Five-year plans of China
The Five-Year Plans () are a series of social and economic development initiatives issued by the Chinese Communist Party (CCP) since 1953 in the People's Republic of China. Since 1949, the CCP has shaped the Chinese economy through the plenums o ...
*
Dirigisme
Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role contrary to a merely regulatory interventionist role over a market economy. As an economic doctrine, dirigisme is the opposite of ''lai ...
(indicative planning in France)
*
Economy of India
The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable state participation in strategic sectors.
*
*
*
* It is the world's fifth-largest economy by nomin ...
*
Economy of Singapore
The economy of Singapore is a highly developed free-market economy with dirigiste characteristics. Singapore's economy has been previously ranked as the most open in the world, the joint 4th-least corrupt, and the most pro-business. Singapo ...
*
First Malaysia Plan
*
Five-year plans of Argentina
The Five Year Plan was an Argentine state-planning strategy, during the first government of President Juan Domingo Perón.
First Five Year Plan (1947–1951)
Preparations
Early in the second half of 1946, the Technical Secretariat of the Pre ...
*
Five-year plans of South Korea
The Five-Year Economic and Social Development Plans () were an economic development project of South Korea.
Background
Both North and South Korea had survived the Korean War (1950–53). From the end of World War II, South Korea remained largely ...
References
Further reading
*Kaplan, Robert - see reference to his work on International Economics and Foreign Relations, where he addresses nature of “command economy”, a Weberian term.
* Cox, Robin (2005)
"The Economic Calculation Controversy: Unravelling of a Myth" ''Common Voice'' (3).
* Damier, Vadim (2012)
"The Economy of Freedom"
* Devine, Pat (2010). ''Democracy and Economic Planning''. Polity. .
*
Ellman, Michael (2014)
''Socialist Planning''(3rd ed.).
Cambridge University Press
Cambridge University Press is the university press of the University of Cambridge. Granted letters patent by Henry VIII of England, King Henry VIII in 1534, it is the oldest university press
A university press is an academic publishing hou ...
. .
* Grossman, Gregory (1987): "Command economy". ''
The New Palgrave: A Dictionary of Economics''. 1. pp. 494–495.
* Landauer, Carl (1947). ''Theory of National Economic Planning'' (2nd ed.). Berkeley and Los Angeles, California: University of California Press.
* Mandel, Ernest (1986). ''In Defence of Socialist Planning''. ''New Left Review'' (159).
* .
*
Nove, Alec (1987). "Planned economy". ''The New Palgrave: A Dictionary of Economics''. 3. pp. 879–885.
External links
"The Myth of the Permanent Arms Economy"
{{DEFAULTSORT:Planned economy
Anarcho-communism
Anarcho-syndicalism
Communism
Economic ideologies
Economic systems
Former communist economies
Marxism
Marxism–Leninism
Schools of economic thought
Socialism
Socialist calculation
Syndicalism