Centrally planned economy - what's the point?

[UnknownPerson]

Please note that I might be misunderstanding the definitions of a centrally planned economy since I'm very new to economics.

What's the point of having a centrally planned economy if the state could simply allow private businesses to be created, but take most of the surplus value away from the business owners, and then use it on the public goods? As this would obviously discourage many from creating a business, the state could compensate the lacking jobs by creating it's own industries.

What political ideology does this view belong to?

[RedMarxist]

your thinking of state-capitalism. In a centrally planned economy run democratically by the working class, it allows society to better serve its needs. Capitalism would be abolished, so no profit driven industries to speak of. This is assuming a world revolution happened already. People would be paid from each according to their needs, to each according to their abilities.
Councils would run the factories and other means of production, in a central manner.

[Armchair War Criminal]

What's the point of having a centrally planned economy if the state could simply allow private businesses to be created, but take most of the surplus value away from the business owners, and then use it on the public goods?...

What political ideology does this view belong to?This is social democracy in a nutshell (especially if we relax the "most.") The primary reasons people offer for preferring a planned economy (or market socialism, and so on) is that (1) production is still primarily under the control of capitalists, even if consumption has been made more egalitarian, (2) the existence of that surplus value, and control over production, will allow the continued political domination of capital, threatening the substantially democratic control of tax expenditures, and (3) lost output during the business cycle.


As this would obviously discourage many from creating a business, the state could compensate the lacking jobs by creating it's own industries.If you're taxing surplus value heavily and using it to subsidize public industries, you're going to evolve towards a planned economy. This is in fact not too far from the program outlined in the Manifesto!

[UnknownPerson]

If you're taxing surplus value heavily and using it to subsidize public industries, you're going to evolve towards a planned economy. This is in fact not too far from the program outlined in the Manifesto!

How will it evolve into a planned economy if it will basically evolve into a market in which the state owns most of the major industries?

[UnknownPerson]

your thinking of state-capitalism. In a centrally planned economy run democratically by the working class, it allows society to better serve its needs. Capitalism would be abolished, so no profit driven industries to speak of. This is assuming a world revolution happened already. People would be paid from each according to their needs, to each according to their abilities.
Councils would run the factories and other means of production, in a central manner.

I've read somewhere that non-market socialism can't work because of some calculation problem. So far, most of the articles I've visited which explained this used very sophisticated economical vocabulary, which I'm not familiar with (or at least not familiar with the concepts that the authors want me to see behind the words they present, and I end up thinking of concepts which I would most commonly see behind the words presented, which very often happen not to be the concepts that the authors want me to think of).

Could anybody please explain this economical calculation problem? Also, is a centrally planned economy more or less efficient than market socialism, and why or why not?

[Armchair War Criminal]

How will it evolve into a planned economy if it will basically evolve into a market in which the state owns most of the major industries?What else would a planned economy be?

[UnknownPerson]

What else would a planned economy be?

As far as I know, in a planned economy, the state determines what to produce and how, not based on the profit motive, unlike in any market economy (be it a socialist or a free-market). I might be wrong though.

[thefinalmarch]

market economy

socialist
Nope.

In a socialist (or communist; when referring to specific modes of production their definitions are identical) mode of production, theoretically speaking (mainly because I haven't done enough research into the economies of any historical actually socialist societies), goods are most often predicted to be distributed either "to each according to his need" (as in a gift economy) or "to each according to his contribution" (the specifics of the latter are really vague). Manufactured, harvested, mined and what-have-you products, as well as services, are not commodities in a socialist mode of production. And since workers no sell their labour for a wage (to capitalists, etc.), labour also ceases to be a commodity. A market cannot be said to exist.

[Black Sheep]

A centrally planned economy, not to be confused with centralized decision making, is in essence a practice all communists and anarchists adhere to, and it is simply planning economy to produce what is needed.Production according to needs, and not according to profit.
1)Calculate the needs of x,y,z goods in a,b,c areas.
2)Distribute production minimums on all faciities producing these goods.
3)Distribute goods according to (1)

That's it.

[Die Rote Fahne]

A centrally planned economy, not to be confused with centralized decision making, is in essence a practice all communists and anarchists adhere to, and it is simply planning economy to produce what is needed.Production according to needs, and not according to profit.
1)Calculate the needs of x,y,z goods in a,b,c areas.
2)Distribute production minimums on all faciities producing these goods.
3)Distribute goods according to (1)

That's it.

Not necessarily. Many communists agree we a decentralized planned economy, where decisions are made from the bottom.