A planned economy which adjusts to demand

[UnknownPerson]

Is it possible to eliminate the surplus value exploitation while still having an economy which adjusts to the people's demand? Doesn't a centrally planned economy result in plans without any changes in the consumer preference set for the time of the plan (usually 5 years)?

Do you think market socialism would adjust to the demand and be a good system to operate? Market socialism implies public ownership of the means of production and those means of production being operated for profit, and the profit being paid back to the workers.

[Broletariat]

I don't see why a planned economy couldn't adjust to demand.

Here's the way I imagine it'd work.

Alright, here's all the supplies we've got, here's all the demand we've got, well shit the demand is larger than supply, lets have people rank what they most want in priority form or something.

Okay satisfy top priorities first.

Do this for each production period or something.

[jake williams]

Is it possible to eliminate the surplus value exploitation while still having an economy which adjusts to the people's demand? Doesn't a centrally planned economy result in plans without any changes in the consumer preference set for the time of the plan (usually 5 years)?
Why would this be impossible?

At any rate, 5 year plans aren't sacred. The fundamental point of socialism is that workers/consumers, not a small minority out to extract private profit, control production. And control the planning decisions that exist in any society. You think capitalism doesn't make complex, long-term planning decisions? You think large firms don't have 1-year, 5-year, 10-year plans? They couldn't raise any capital without them. Even capitalism has to plan.

But it does a really shitty job of it in pretty fundamental ways. First, the plans aren't shared, or coordinated. In some cases they're practically trade secrets. A manufacturer doesn't have access to all sorts of important information from energy and raw material producers, and retailers in turn are often in the dark about manufacturers. They all have to pay for what little they know about consumers' actual preferences, and what they get when they pay is "if you give us more money, we can brainwash people to want your shit". Secondly and more importantly, the plans aren't made by or in the interests of the vast majority of society - they're made in the interests of accumulating profit to the tiny minority of people doing the planning (and lending, and managing, and so on).

The point of socialist planning is to coordinate the long-run planning decisions that any complex industrial economy has to make, and to coordinate them in the interests of the working class. This includes adjusting to consumers' needs if and when they change. There's absolutely no decision that a socialist planned economy should have a harder time adjusting to consumers' needs than a modern capitalist economy, if it's actually controlled by consumers, in an advanced society with social networks and generalized wireless communication and fibre optics and super computers. In fact we have every reason to believe that it would do a much, much better job.

The fact that a plans need to be followed, and decisions can't be left up to the whims of particular firms, is because plans are the means by which workers exercise democratic control of the economy at its highest levels. If workers collectively decide we need this much electricity, and you're put in charge - by workers - of a power plant that all workers collectively own, then you don't get decide "no, I only want to produce this much power, bugger off". But there's absolutely no reason plans can't be changed as information changes, something which happens much more often at the smaller and more specific levels of organization where volatility in needs and capacities is much higher. In the long run we can credibly predict about how much electricity we'll need, and about how much we'll be able to produce. Obviously you need to change your plans if, say, half your power plants are destroyed, or if production miraculously becomes twice as energy efficient. There's no reason this can't or won't happen, but these events are relatively unlikely.


Do you think market socialism would adjust to the demand and be a good system to operate? Market socialism implies public ownership of the means of production and those means of production being operated for profit, and the profit being paid back to the workers.
No. "Market socialism" isn't socialism. Market socialism is a messy network of petty capitalism and social democracy which fails spectacularly whenever it's tried.

[UnknownPerson]

Why would this be impossible?

At any rate, 5 year plans aren't sacred. The fundamental point of socialism is that workers/consumers, not a small minority out to extract private profit, control production. And control the planning decisions that exist in any society. You think capitalism doesn't make complex, long-term planning decisions? You think large firms don't have 1-year, 5-year, 10-year plans? They couldn't raise any capital without them. Even capitalism has to plan.

But it does a really shitty job of it in pretty fundamental ways. First, the plans aren't shared, or coordinated. In some cases they're practically trade secrets. A manufacturer doesn't have access to all sorts of important information from energy and raw material producers, and retailers in turn are often in the dark about manufacturers. They all have to pay for what little they know about consumers' actual preferences, and what they get when they pay is "if you give us more money, we can brainwash people to want your shit". Secondly and more importantly, the plans aren't made by or in the interests of the vast majority of society - they're made in the interests of accumulating profit to the tiny minority of people doing the planning (and lending, and managing, and so on).

The point of socialist planning is to coordinate the long-run planning decisions that any complex industrial economy has to make, and to coordinate them in the interests of the working class. This includes adjusting to consumers' needs if and when they change. There's absolutely no decision that a socialist planned economy should have a harder time adjusting to consumers' needs than a modern capitalist economy, if it's actually controlled by consumers, in an advanced society with social networks and generalized wireless communication and fibre optics and super computers. In fact we have every reason to believe that it would do a much, much better job.

The fact that a plans need to be followed, and decisions can't be left up to the whims of particular firms, is because plans are the means by which workers exercise democratic control of the economy at its highest levels. If workers collectively decide we need this much electricity, and you're put in charge - by workers - of a power plant that all workers collectively own, then you don't get decide "no, I only want to produce this much power, bugger off". But there's absolutely no reason plans can't be changed as information changes, something which happens much more often at the smaller and more specific levels of organization where volatility in needs and capacities is much higher. In the long run we can credibly predict about how much electricity we'll need, and about how much we'll be able to produce. Obviously you need to change your plans if, say, half your power plants are destroyed, or if production miraculously becomes twice as energy efficient. There's no reason this can't or won't happen, but these events are relatively unlikely.


No. "Market socialism" isn't socialism. Market socialism is a messy network of petty capitalism and social democracy which fails spectacularly whenever it's tried.

Thanks for your post, I found it informative.

Is it possible to constantly keep changing the consumer preference data target in a centrally planned economy?
Also, could you please suggest any information which could help me to learn more about centrally planned economies and their advantages?

[Tommy4ever]

I'm not sure if central planning can effectively adjust demand and supply. Then again, the advent of advanced computers from the late 90s might have been able to revolutionise the planning system.

In the Soviet Union they tried desperately to adjust supply to demand with colossal screeds of information of people's consuming habits - that all took a significant time to process. Then this information had to be fed to industry so that it would begin to produce what people wanted. But industry was so incredibly sluggish that people had often moved on to demanding new goods.

The main problem there is trying to streamline the process - I'm not sure if that is possible.

[ÑóẊîöʼn]

The main problem there is trying to streamline the process - I'm not sure if that is possible.

Put an RFID chip in every product, so that when it leaves the distribution centre, the information is immediately sent where ever it is needed. Assuming every distribution centre has a decent internet connection, one could potentially have real-time consumption data available.

[UnknownPerson]

Put an RFID chip in every product, so that when it leaves the distribution centre, the information is immediately sent where ever it is needed. Assuming every distribution centre has a decent internet connection, one could potentially have real-time consumption data available.

Couldn't this be done through less costly means such as simple manual counting?

[ÑóẊîöʼn]

Couldn't this be done through less costly means such as simple manual counting?

RFID chips aren't expensive, and internet connections are already used in many contemporary shops for bank and credit card transactions. RFID transceivers can be placed at the doorways like anti-theft systems are today, but monitoring rather than hindering the product's movement.

[Blackscare]

I feel that the quickest way to harmonize goods distribution, consumer demand, and production, would be to simply pluck the low-hanging fruit that capitalism has created for us. By that I of course mean harnessing the power of WalMart (at least in the US). Don't get me wrong, any large-scale distributor following suit would suffice. It's just the best example I can think of.


WalMart is a massively efficient network for a number of reasons, the first being that it centralizes the distribution of a wide variety of goods that previously would have been sold in more specialized, possibly locally owned enterprises. This allows several hurdles to be overcome. It allows for the greater coordination of deliveries to fewer locations at higher volumes less often. It's cheaper to send a lot of stuff to one place than a few things here and there. That doesn't mean that there can't be a lot of variety, but the fewer trips that need to be made to distribute X volume of product, the better. Also, if you're going to have some sort of "planned" economy (I prefer the term coordinated), it's a good idea to have an efficient way of keeping tabs of your stocks of goods (say, in massive warehouses that coordinate distribution for what basically amount to entire districts, in the case of WalMart), which brings me to my next point, and the part I think you're more interested in.

WalMart makes brilliant use of bar code scanning technology. They have devices that can display, with the swipe of a shemp, the sales patterns (as well as other information) for any item. Does this dress sell more in red on tuesdays or wednesdays? When do people buy more toothbrushes and what were the recorded temperatures for those days? Ok, I don't know if they really track that particular metric, but I wouldn't be surprised. My point is that they have an incredibly efficient method of digitally recording statistics about all of their products, all the time, and sifting through this vast amount of data automatically, identifying statistical correlations and accounting for them. When items run low new orders to warehouses are placed automatically, without human interference.

This shift towards centralization and automation has precipitated the advent of so called "pull production". Pull production is when the demands of retail outlets dictate what gets produced and for how much, which is an improvement over the previously dominant dynamic where producers decided to produce X amount of shit for Y price and hope they found buyers (push production). This type of harmonization of demand and production, though stunted by the constraints of capitalism today, should be the keystone that we seize upon and build off of. I don't know, this all may sound sort of grim and Orwellian to some, basing a socialist 'utopia' off of the likes of WalMart, but to me the goal of communists should be the maximization of efficiency and the minimization of human labor, so that we can do the shit that we actually find value in. I've never been one of those people who found anything really personally fulfilling in shopping, so to me going to one store that has all or most of the shit I want rather than a host of specialized boutiques just means I have to deal with less bullshit before I'm done. Socialization has a lot to do with this, of course. Anyway, if we were to move forward in a unified way and improve infrastructure along these lines, drop planned-obsolescence and Bernaysian witchcraft, try various methods of going beyond mere statistical manipulation to democratize the selection of goods for production, and begin to much more actively harness the potential of industrial automation, we'd be well on our way to communism.


We've seen that WalMart has grown in this direction as far as it could, and as a consequence of the demands for constant growth inherent in capitalism, has stagnated as a company. Even though they can consistently generate a profit, their economic viability as a publicly traded company was predicated on rapid growth around the world as they expanded to fill a wonderfully utilitarian niche that is now very much saturated because of it's own inherent efficiency. So, rather than being vigorously expanded upon, one of the greatest industrial achievements in human history (embodied in large part, but not exclusively, by WalMart) languishes in economic limbo. Big enough to be considered basically a public utility but economically outdated, from the perspective of growth/profit-generation. Capitalism creates extremely innovative, potentially useful things, and cannot abide their full implementation.

[Tommy4ever]

Put an RFID chip in every product, so that when it leaves the distribution centre, the information is immediately sent where ever it is needed. Assuming every distribution centre has a decent internet connection, one could potentially have real-time consumption data available.

The consuming habits data would be easier to solve with modern technology. But the real issue with the Soviet style central planning system was the sluggishness of industry. That's the real central issue.

[Blackscare]

I'd also like to mention that Allende's Cybersyn project, which was an early analogue attempt to synchronize production, could be used in tandem with what I talked about above. Stafford Beers (the mind behind Cybersyn) was an interesting guy, but a bit of a dillhole.


Also, if you want to see a documentary that goes into everything I was talking about and more, watch "WalMart: the high cost of low prices".

[Jose Gracchus]

It should be remembered that the Stalinist Five Year Plans were more about forcibly coordinating the nation-wide accumulation of capital stock for the Stalinist ruling class than it had to do with anything like Marxian planning in-kind on the basis of human needs and wants. The Stalinists abolished the statistical organization that plotted the caloric subsistence of the immediate producers, when in a need-based scientifically planned economy, the welfare of your producers would be the first thing you got data on and made decisions based on.