Planned Economys'?

[TheGodlessUtopian]

What are they exactly? What are the benefits and dysfunctions of such a system?

Also,the conservatives have been yelling a lot about Europe's "planned economy's," are Europe's markets actually planned or is this simply a lie?

[Ned Kelly]

A planned economy is just what the name suggests, central forces, such as GOSPLAN in the USSR, would plan what is to be produced and how much based on needs.

This is as opposed to the looseness of the capitalist 'market economy', whereby each individual capitalist produces what they think will make a profit, eventually leading to overproduction and economic chaos.

[Ned Kelly]

Also, that is a blatant lie. All economies in Europe are market economies

[MarxSchmarx]

European economies are no more planned economies than the American or Japanese economy - they are "planned" in the sense that the production decisions are made by a handful of capitalists and the money supply is controlled by the state, but beyond that supply and demand largely determine prices and patterns of consumption.


A planned economy is just what the name suggests, central forces, such as GOSPLAN in the USSR, would plan what is to be produced and how much based on needs.


Determining how much of what to produce in planned economies can also be largely decentralized in practice. That is what, for example, Parecon seeks to accomplish.

As far as the pros/cons go, this ought to get you started:
http://en.wikipedia.org/wiki/Transformation_problem

[TheGodlessUtopian]

Interesting,thanks guys.

However,what's parecon?

[Ned Kelly]

Participatory Economics
http://en.wikipedia.org/wiki/Participatory_economics

[scarletghoul]

There are no planned economies in Europe, and very few left in the world. Most planned economies now are socialist countries (Cuba, North Korea, Libya), though I think there's a few nonsocialist countries like Myanmar that may have planned economy. There are also some countries that have a market system but with a powerful state guidance like China or Belarus, which lets them keep capitalist system but prevent crazy financial collapse like the US and EU have had. That's not planned economy exactly but it shows how important some coordination in the economy is.

Planned economy is good because it means things can be coordinated better than in a market, and things can be done to benefit society as a whole. Also it overcomes the limitations of capitalist investment which will only go ahead when there is an obvious profit; planned economy can take the profit from one place to compensate for the loss of something else (a great example of this is Libya. They get loads of money from their oil reserves, and one thing this money is used for is the huge desert water system which creates rivers and reservoirs in the Sahara desert from fossilised water. Its hard to imagine oil revenue being used for such a project in a market economy)

It's also great for developing a country (just look up the industrialisation of the USSR and compare it to the UK or whatever).

[Hen]

I must admit to my confusion. Can anyone make clear how central planning doesn't run in opposition to the objective of statelessness.

[Ned Kelly]

Central planning in a Marxist sense is carried out by the state under the dictatorship of the proletariat, a step on the way to stateless communism. It is no longer the bourgeois state apparatus and superstructure we Marxists oppose.

[B0LSHEVIK]

Well actually, Marx never called for a 'planned economy' per se. Thats a development (or interpretation) from the russian rev.

There are some scenarios where one would benefit from a planned economy. War time is one. Usually, during a crisis really. Other than that though, it leads to major problems. Especially if the bureaucrats are only carerrists instead of actual socialists. Any disruption, be it weather, an influenza, sabotage, etc can derail a planned economy. Its not very stable in other words and takes too long to alter. Also, if you are a socialist and believe in worker control of the economy, than it becomes rather hard to justify such a top-down heirarchial system.

Oh and EU is not planned economy in any respects. Some aspects are planned though. Like armament production during peace time. 99.9% of countries are mixed economies. Some parts are market based, some are planned. Very few countries, if any, are totally one or the other.

[ComradeOm]

I must admit to my confusion. Can anyone make clear how central planning doesn't run in opposition to the objective of statelessness.The absence of a political state does not imply the absence of an administrative state. Or, in anarchist lingo, its the difference between 'the State' and governance. Running a planned economy is little different in running an electricity grid, in that some degree of central co-ordination/control is required


Well actually, Marx never called for a 'planned economy' per seHe didn't call for the creation of a world wide web either, yet here we are


Also, if you are a socialist and believe in worker control of the economy, than it becomes rather hard to justify such a top-down heirarchial systemThere are a number of problems with this. The most obvious being the assumption that a planned economy must be "a top-down heirarchial system" a la the USSR. There must be a centre exerting some degree of control, of course, but any socialist economy must be entirely beholden to its base. Which leads us on the the second issue - the narrow interpretation of "worker control" to mean little more than worker management of individual factories. It is so much more than that and there are a variety of ways in which workers can control not just their own immediate environment but the entire economic apparatus

[B0LSHEVIK]

The absence of a political state does not imply the absence of an administrative state. Or, in anarchist lingo, its the difference between 'the State' and governance. Running a planned economy is little different in running an electricity grid, in that some degree of central co-ordination/control is required

He didn't call for the creation of a world wide web either, yet here we are

There are a number of problems with this. The most obvious being the assumption that a planned economy must be "a top-down heirarchial system" a la the USSR. There must be a centre exerting some degree of control, of course, but any socialist economy must be entirely beholden to its base. Which leads us on the the second issue - the narrow interpretation of "worker control" to mean little more than worker management of individual factories. It is so much more than that and there are a variety of ways in which workers can control not just their own immediate environment but the entire economic apparatus


1) TOUCHE!!! But that is pushing it to be honest. Yes he never called for a www either, but he sure believed in worker organization and communication. Which is, what the web is, communication. A planned economy on the otherhand, I dont know....

2) Well comrade, explain to me how a economy can be a command economy, and be simultaneously managed by the workers. Isnt that what the USSR did and failed, in theory at least? Command economics inherently point to a heirarchial society. EG, someone commands (a dear leader, a council, a politburo, a stavka, a soviet whatever) and workers produce.

I do agree with you on what some people take as worker control being narrow and simple.

[ComradeOm]

Isnt that what the USSR did and failed, in theory at least?No. The Stalinist economy was never intended to function as an expression of workers' control. There is a huge amount to be taken from the experience but these are largely technical tools (such as linear programming techniques and the like) that are not inherently Stalinist or somehow despotic. Nor is anyone suggesting that we simply recreate the Soviet economy with all its obvious faults and deficiencies


Command economics inherently point to a heirarchial society. EG, someone commands (a dear leader, a council, a politburo, a stavka, a soviet whatever) and workers produceWhat of when the 'commands' (aka 'plans' or 'production targets') are issued by a democratically elected authority and compiled on the basis of instructions/demands from grassroots bodies? Centralisation does not automatically equate to class society

As an aside, nor does correlation imply causation

[Obs]

Might be a bit hasty to call yourself a Maoist if you don't even know what a planned economy is, son

[TC]

I believe the term "planned economy" is actually a misnomer. Every economy is planned both on the large scale and small scale. The question is really who plans the economy and how do they plan it.

Enforcing a regime of private property rights in a market is just enough type of central planning.

All economies also have small scale local planning too. How a particular shop floor is run might be planned by a workers committee, a local manager to a capitalist, capitalists at headquarters in another city, or a state department of industry - but how these plans are interpreted and implemented will always require local decisions.

The liberals/conservatives (and the leftists who adopt their analysis without critically examining it, i.e. most leftists) make this distinction between central planned economies and free market economies - but in reality both are regulated systems.

Different types of socialist economies are of course planned and regulated differnetly so you can't really generalize about that either.

[B0LSHEVIK]

No. The Stalinist economy was never intended to function as an expression of workers' control. There is a huge amount to be taken from the experience but these are largely technical tools (such as linear programming techniques and the like) that are not inherently Stalinist or somehow despotic. Nor is anyone suggesting that we simply recreate the Soviet economy with all its obvious faults and deficiencies

What of when the 'commands' (aka 'plans' or 'production targets') are issued by a democratically elected authority and compiled on the basis of instructions/demands from grassroots bodies? Centralisation does not automatically equate to class society

As an aside, nor does correlation imply causation

1) Oh ok. Its just that some Stali-Mao comrades here make it seem as if the USSR was a workers state.:rolleyes: Which in turn, leads to my confusion on this matter.

But didnt Stalinism pay lip service to being democratic and worker managed? I mean, wasnt Stalin the Comissar of the Supreme Soviet of the USSR? Which implies that there are other soviets, but Stalin heads the supreme one? I know you're not defending Soviet 'socialism,' Im just making a point that certain types of comrades will take your advice, yet present a beastly product.

2) Ok. I see. Im a bit more cynical though. My take is how would the proletarian class know what to produce in the coming months, if their concerns cant possibly begin to capture all the concerns of the individual proletariats? I mean I can see a command economy setting a path or groundwork for future development, but a fully command economy? I just dont think its plausible.

[syndicat]

It's true that lots of planning occurs in capitalism. the big corps are essentially central planning machines. they have elaborate bureaucracies of financial people, analysts, industrial engineers (who devise work flows and job descriptions), legal advisors and so on. these planning bureaucracies are thick enough they can skew the operation of the corporation to also serve their bureaucratic class interests, while also maintaining profitability of the firm, thus serving their plutocratic masters.

But the capitalist economy as a whole is uncoordinated. Each capital does its own planning in autonomy from the others. The state sets some rules of the road but these come out of needs for adjudicating disputes between capitalist factions or responding to protests, in order for the system to maintain some semblance of popular legitimacy. some planning in regard to public services does sometimes take place, and is done in the same top down way by bureaucratic hierarchies, usually, as is done in the private sector. exceptions to this are mainly the few experiments going on in socalled "participatory budgeting" by some municipalities.

I think we can differentiate at least 3 different conceptions of a "planned economy". at the time of the Russian revolution there were two competing conceptions. The Russian libertarian socialists (syndicalists and maximalists) proposed that coordination and planning be organized "from below" through a national congress of the factory committee movement. this proposal was opposed by the mensheviks, bolsheviks and SRs.

the actual soviet central planning system goes back to Nov 1917 and the creation of the Supreme Council for National Economy, created from above by the Council of People's Commissars, and stacked with various Bolshevik party members, union bureaucrats, managers, engineers.

the model proposed by the libertarian socialists in the Russian revolution could be regarded as a form of grassroots or from below central planning because it envisioned a single plan through a big meeting of delegates. similar ideas have been proposed by various left writers, such as Daniel DeLeon's proposed National Industrial Union Congress, or the worker congresses proposed for this purpose by the Spanish anarchist Diego Abad de Santillan in "After the Revolution", and in the '50s the ideas of Castoriadis elaborated in "Workers Councils & the Economics of a Self-managed Society".

the third conception is based on some idea of negotiated coordination between separate governance systems, one rooted in the workplace assemblies & councils, and one rooted in neighborhood assemblies. the earliest form of this was in guild socialism, as elaborated by GDH Cole in "Guild Socialism Restated". the idea of a system of organized negotiation between workers and consumers was worked out in a fuller way by Robin Hahnel & Michael Albert in their various books on participatory planning. Earliest formulation is in an essay in the book "Socialist Visions". Pat Devine's system of negotiated coordination is another variation on this theme.

[SpineyNorman]

The IWCA have produced an excellent piece that would seem to be relevant to this discussion. It first argues that the capitalist "free market" is nothing of the sort, as it is in fact planned by corporations that own suppliers, producers and retailers. (As has been argued above). It also proposes how a socialist (or democratic, as they call it) economy could function without the need for top-down planning. It's in two parts. Part One. (http://www.iwca.info/?p=10145) Part Two. (http://www.iwca.info/?p=10172)

[ComradeOm]

I know you're not defending Soviet 'socialism,' Im just making a point that certain types of comrades will take your advice, yet present a beastly productIf a revolution is comprised solely of those 'comrades' (hah) then its already been lost


Ok. I see. Im a bit more cynical though. My take is how would the proletarian class know what to produce in the coming months, if their concerns cant possibly begin to capture all the concerns of the individual proletariats?As I say, centralisation is necessary. It just doesn't automatically translate into despotism

Look at it this way. Every planning problem is comprised of two basic components - what needs to be produced (demand) and what we're able to produce (capacity). The whole planning process is just a matter of reconciling these two. Now this is not easy and the process itself does require both skills and expertise. However the key determinants (demand and capacity) can be set at grassroots level through feedback from communities/soviets/factories/whatever. They say what they need and what they are capable of producing; this is collated into a collective plan (edit: by specialist planners) and production targets are passed back along the line

All of which is pure speculation, of course. I've no idea what any future economic system will look like but the above additions (ie, introducing real grassroots involvement) are an obvious place to start when talking about salvaging the remains of Soviet planning systems. And we'd be mad not to avail of the experience of the latter


I believe the term "planned economy" is actually a misnomer. Every economy is planned both on the large scale and small scale. The question is really who plans the economy and how do they plan it.Have to agree with syndicat here. Without splitting hairs, it is misleading to call the market system a 'planned economy' or to argue that the term is without worth. Market mechanisms are still predominant in determining the key economic questions in 'free market' capitalism - product produced, quantities, prices, inflation, demand, etc. Companies turn to planners to turn this into production plans and the like but that does not mean that the overall economy is planned in any real way. When talking about an economy in which these market mechanisms have been removed then the term 'planned economy' is as good as any


I think we can differentiate at least 3 different conceptions of a "planned economy". at the time of the Russian revolution there were two competing conceptions. The Russian libertarian socialists (syndicalists and maximalists) proposed that coordination and planning be organized "from below" through a national congress of the factory committee movement. this proposal was opposed by the mensheviks, bolsheviks and SRs.I'm going to surprise everyone and say that the Russian Revolution is not particularly relevant to this discussion. Bolshevik plans for the economy (insofar as they existed in 1917-18) were quickly torn up by crises and the Soviet planned economy owed far more to the Stalinist reforms of the late 1920s than anything seen a decade previously. Secondly, the picture painted by the "Russian libertarian socialists" is disingenuous at best. Its rarely mentioned, for example, that the first suggestions to create Vesenkha did not come "from above" but from within the FC movement itself (the CCPFC IIRC). The situation was fluid to say the least

[syndicat]

Its rarely mentioned, for example, that the first suggestions to create Vesenkha did not come "from above" but from within the FC movement itself (the CCPFC IIRC). The situation was fluid to say the least

this is disingenuous at best. the Bolshevik Party had colonized the factory committee movement. there were separate councils that were influenced by different tendencies. the St Petersburg Regional Soviet of Factory Committees was a syndicalist influenced grouping that opposed the proposals of the Bolshevik party. certain Bolshevik bodies in the factory committee movement may have been persuaded...after all, with party members in the majority...to go along with what the party wanted. But Vesenkha was created by the Council of People's Commissars, from above, not by any meeting of the factory committee movement.

[ComradeOm]

this is disingenuous at best. the Bolshevik Party had colonized the factory committee movement"Colonised"? I would have used the term 'overwhelmingly popular with'. Were there syndicalists active in the FCs and present on FC congresses/councils/bodies? Yes. They were typically however in a tiny minority. By October 1917 the FC movement was solidly Bolshevik in character - FCs returned Bolshevik deputies to higher coordinating bodies and solidly voted for Bolshevik resolutions. Most obviously the various major FC conferences (for example, First, Second, Third Petrograd and First All-Russian) saw delegates sent from individual factories, and thus is as close to a gauge of grassroots sentiment as its possible to have, and yet produced solid Bolshevik majorities and overwhelmingly support for Bolshevik sponsored resolutions

This was not the result of some Bolshevik 'black magic' or organisational trickery but the simple fact that, as in the Soviets, the Bolsheviks were the most popular party going. The counterpoint to all this is of course that the "libertarian socialists" were not nearly as popular as some like to make out and nor was there some mass yearning for their economic policies. The Russian worker saw no incompatibly between his/her aspirations and increased coordination through state bodies. Hence the irrelevancy of 1917 to this discussion - some people were calling for syndicalist policies and they were roundly ignored


But Vesenkha was created by the Council of People's Commissars, from above, not by any meeting of the factory committee movement.And I didn't suggest that it was. What I've made clear above is that there was no conflict between the FCs and increased state control. This is encapsulated in the call from the All-Russian Council on Factory Committees (not Petrograd as I assumed above) on 26 Oct for the creation of "a central apparatus to regulate the economy" (quoting Smith, Red Petrograd). Ironically enough, it was this resolution, supposedly on workers' control, that motivated Lenin to write his rather more radical draft decree (http://www.marxists.org/archive/lenin/works/1917/oct/26.htm). Again, any attempt to counterpose Bolshevik and FC policies on planning runs afoul of the fact that there was little difference between the two

[syndicat]

All-Russian Council on Factory Committees

a Bolshevik Party dominated gruop that became dormant rather soon.

[ComradeOm]

a Bolshevik Party dominated gruop that became dormant rather soon.A description that could be applied to virtually every FC body given that the movement was both a stronghold for the Bolsheviks and shortly amalgamated into trade union movement. Syndicalists continually play up the democratic nature of the FCs while ignoring that it was the Bolsheviks who benefited the most from this

[Hen]

I saw Robin Hahnel mentioned and thought this quote from him served some relevance:

"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 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."

[electro_fan]

there's actually no such thing, currently, as an unplanned economy, all economies are planned, but most of the time thhey are "planned" on a capitalist basis by large companies and the state, and the state will step in to help out large industrialists and companies and prevent them from going under. they will do anything to prevent this, the recent bank bail-outs illustrate this, even (espeically) at the extent of workers' rights collapsing and even small(er) businesses collapsing as well

if the economy was democratically planned under workers control then it would mean that rather than the state doing everything to stop a small group of capitalists losing their wealth, everyone involved, workers, consumers, etc, would be able to decide on what was necessary for the needs of the population, and a plan would be drawn up, rather than what happens currently