Proof that planned economics work?

[Jacob Cliff]

What are some good stats about the successes of planned economics? Many libertarians and anti communists often claim planned economies/nationalized sector is inefficient/leads to shortages/causes famine, etc. Or, even more annoyingly, that no planning can calculate the wants and needs of everyone in society. How do you respond to these claims, and are there any statistics backing any successful planned economies?

[Mr. Piccolo]

A good book on the success of Soviet central planning is Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution by Robert C. Allen.

A short summary of the book can be found here: http://press.princeton.edu/titles/7611.html

For a longer summary see: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.507.8966&rep=rep1&type=pdf

If you have time Allen's entire book is worth reading in my opinion.

Stephen Gowans wrote a good blog piece defending economic planning here: https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/

Gowans references a number of good works on the USSR, especially works by David M. Kotz and Fred Weir, particularly their work, Revolution From Above: The Demise of the Soviet System, where Kotz and Weir argue against the claim that the USSR collapsed primarily because of problems with economic planning.

Allin Cottrell and Paul Cockshott have written some very impressive discussions of planning, including critiques of Ludwig von Mises and Friedrich Hayek.

A good place to start would be this paper: http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/calculation_debate.pdf

A paper devoted to critiquing Hayek: http://www.dcs.gla.ac.uk/~wpc/reports/hayek/hayek.html

A more recent piece by Cockshott on planning: http://www.dcs.gla.ac.uk/~wpc/reports/standalonearticle.pdf

Cockshott has an entire section of his academic webpage devoted to his papers on economics. Here:http://www.dcs.gla.ac.uk/~wpc/reports/index.html#econ

I hope this helps.

[mushroompizza]

The Soviet Union sent robots to the moon in 1969, the capitalist west only set humans.
The Soviet Union invented satellites.
The birthrate went up under Stalin.
America won WW2 using a temporary planned economy, (rations, central planning, state owned businesses).

[Antiochus]

Because a centrally planned economy isn't what Socialists advocate?

Centrally planned economies are usually disasters. This is what India, the United States etc... (and the USSR) had/have. What, exactly, is the difference between ~200 bureaucrats 'planning' an economy and ~200 billionaires? Is it any wonder that in the USSR when neoliberalism was introduced these same bureaucrats became the billionaires?

Socialists should (and do) advocate for a democratically planned economy where everyone has an input in the decision making. In a perfect scenario the decisions and made locally and affect the immediate locale, in reality it is a bit more complicated.

[oneday]

What, exactly, is the difference between ~200 bureaucrats 'planning' an economy and ~200 billionaires?

There's a pretty big difference, the bureaucrats actually planned the economy.

[Antiochus]

Ugh, yeah sure. It was truly a planned paradise. The Soviet economy had massive distortions, which seem palatable only in the context of what came right after (neoliberalism).

Had that transition been smoother, as was the case in Poland, you would have no argument for propping up centrally planned economies.

Indeed, you can still see the effects of the centrally planned nature of the Soviet economy till this day; the Central Eurasian nations being far far poorer than Moscow or St. Petersburg.

[GiantMonkeyMan]

Indeed, you can still see the effects of the centrally planned nature of the Soviet economy till this day; the Central Eurasian nations being far far poorer than Moscow or St. Petersburg.
Just like London is richer than the north of England and New York is richer than Kentucky, right? Regional disparity in relative wealth has nothing to do with the success or failure of 'planning'.

[Antiochus]

Just like London is richer than the north of England and New York is richer than Kentucky, right? Regional disparity in relative wealth has nothing to do with the success or failure of 'planning'.

Off course it does. The Soviet Union was "socialist", right?:lol: So why were people in Tajikistan much, much (the gap between New York and Kentucky falls flat) poorer than those in the western cities? Its pretty obvious why. Centralized planning leads to centralization of resources and distribution. Which is a pretty telling reason for why the USSR was 'capitalist' in every sense of the word.

[Tim Cornelis]

I don't follow your point about centralisation. Centralisation of resources and distribution should diminish inequality. If you have decentralised distribution and allocation of resources, areas will have to rely on their own resources, which are unequally endowed, cementing inequality between areas. This is also the critique of decentralisation of healthcare currently in the Netherlands.

But yeah, pretty clearly, Soviet-style capitalism is comparatively inefficient and ineffective in terms of capital accumulation, hence lower growth rates and poorer economies in those countries.

[John Nada]

Off course it does. The Soviet Union was "socialist", right?:lol: So why were people in Tajikistan much, much (the gap between New York and Kentucky falls flat) poorer than those in the western cities? Its pretty obvious why. Centralized planning leads to centralization of resources and distribution. Which is a pretty telling reason for why the USSR was 'capitalist' in every sense of the word.Tajikistan was stuck in medieval times compared to Russia proper before the Revolution. It has very few resources. The Soviets spent billions modernizing those republics. Many of the poorer Soviet Republics were a net drain and would've been ignored under regular capitalism. Strangely all those same Soviet Republics that were "failed" by central planning were the ones which wanted to keep the USSR together, only leaving when that drunk fuck Yeltsin tried to put all their resources under the control of the Russian Soviet Republic(which he led).

[Comrade Jacob]

Planned economy has made industrialized nations that make sure nobody is in poverty.

[Anglo-Saxon Philistine]

The birthrate went up under Stalin.

As it did under Khomeini. Now, there are a lot of positive things to be said for the economies of the Soviet Bloc, usually with huge caveats though - the fall in living standards after the fall of the Stalinist regimes is important to note in this regards (and it's often weakly blamed on "shock therapy", but even states where there was no shock therapy, like the regimes of Tuđman and Milošević, who nationalised everything that looked at them funny and then some, experienced the same fall in living standards). But that there were more babies for the Motherland is not one of them. In fact, generally you expect that as the standard of living and the education level increases, birth rates fall. That the latter did not follow the former in the Soviet Union and similar countries is due to a conservative, narrow-minded, nationalist bureaucracy sitting on the necks of the workers.


Because a centrally planned economy isn't what Socialists advocate?

Centrally planned economies are usually disasters. This is what India, the United States etc... (and the USSR) had/have. What, exactly, is the difference between ~200 bureaucrats 'planning' an economy and ~200 billionaires? Is it any wonder that in the USSR when neoliberalism was introduced these same bureaucrats became the billionaires?

Socialists should (and do) advocate for a democratically planned economy where everyone has an input in the decision making. In a perfect scenario the decisions and made locally and affect the immediate locale, in reality it is a bit more complicated.

Of course socialists advocate for a centrally planned economy, unless by "socialists" you mean people like Ben Bella and his minister for abandoned properties. The thought that, in modern conditions of objectively socialised production, where the production of something as basic as steel or glass requires inputs from around the globe and is required as an input in other production processes (as well as for direct use) throughout the globe, production and distribution can be planned locally is somewhere between quaint and completely outrageous. Not to mention that localism - the stultifying small-town nonsense that some romantic "leftists" peddle - is incompatible with socialism.

And of course central planning can be democratic. As it is impractical to cram several billion people in a room - although this would produce some interesting effects - some form of delegation is needed. But delegation is needed in any case, unless you plan to have groups of about fifty people deciding on resource allocation. Which would either lead to barbarism through the destruction of the productive forces, or to a market (and then barbarism).

As for centrally planned economies, there haven't been any. At most you can have nationally-delimited, partially planned economies embedded in the world market. You can "prove", through practice, that planned economies work about as much as you could "prove" that a global market works in the time of Raymond of Burgundy, the lord of all the Galicias.

Another thing that needs to be considered is - what does it mean to say that a particular way of organising the production of necessities of life "works"? Obviously to socialists the important thing is whether human needs are met. It seems to me, however, that some people (not saying anything about the OP, this is a general observation) really mean that planned economies should successfully compete on the world market. And first of all that's impossible - to the extent that the market exists, planning does not - and second, if a planned economy had money and was efficient in extracting it from the workers, it would not be socialism in any way, shape or form.

[Jacob Cliff]

As it did under Khomeini. Now, there are a lot of positive things to be said for the economies of the Soviet Bloc, usually with huge caveats though - the fall in living standards after the fall of the Stalinist regimes is important to note in this regards (and it's often weakly blamed on "shock therapy", but even states where there was no shock therapy, like the regimes of Tuđman and Milošević, who nationalised everything that looked at them funny and then some, experienced the same fall in living standards). But that there were more babies for the Motherland is not one of them. In fact, generally you expect that as the standard of living and the education level increases, birth rates fall. That the latter did not follow the former in the Soviet Union and similar countries is due to a conservative, narrow-minded, nationalist bureaucracy sitting on the necks of the workers.



Of course socialists advocate for a centrally planned economy, unless by "socialists" you mean people like Ben Bella and his minister for abandoned properties. The thought that, in modern conditions of objectively socialised production, where the production of something as basic as steel or glass requires inputs from around the globe and is required as an input in other production processes (as well as for direct use) throughout the globe, production and distribution can be planned locally is somewhere between quaint and completely outrageous. Not to mention that localism - the stultifying small-town nonsense that some romantic "leftists" peddle - is incompatible with socialism.

And of course central planning can be democratic. As it is impractical to cram several billion people in a room - although this would produce some interesting effects - some form of delegation is needed. But delegation is needed in any case, unless you plan to have groups of about fifty people deciding on resource allocation. Which would either lead to barbarism through the destruction of the productive forces, or to a market (and then barbarism).

As for centrally planned economies, there haven't been any. At most you can have nationally-delimited, partially planned economies embedded in the world market. You can "prove", through practice, that planned economies work about as much as you could "prove" that a global market works in the time of Raymond of Burgundy, the lord of all the Galicias.

Another thing that needs to be considered is - what does it mean to say that a particular way of organising the production of necessities of life "works"? Obviously to socialists the important thing is whether human needs are met. It seems to me, however, that some people (not saying anything about the OP, this is a general observation) really mean that planned economies should successfully compete on the world market. And first of all that's impossible - to the extent that the market exists, planning does not - and second, if a planned economy had money and was efficient in extracting it from the workers, it would not be socialism in any way, shape or form.
I'm no Stalinist, but how exactly would a genuinely planned economy differ from Soviet economics? From what I've read by Trotsky, he seems to believe the soviet economy was a planned economy, just with a parasitic bureaucracy (and not the proletariat) wielding state-power. You being a Trot, what is your stance on the economic structure of the proletarian dictatorship?

[Rafiq]

It would differ insofar as it would have an advanced-industrial capitalist base, with the incredibly complex, information-riddled and bureaucratic-corporate capitalist cartels (now appropriated) at its disposal. The difference here is that there would be no disparity between the necessities of political survival and the dictatorship of the proletariat - no need to introduce capitalist relations to rebuild the proletarian base which is supposed to sustain you and destroy the remnants of feudal relations.

In a "genuinely planned economy", because of the absence of these pre-conditions for the formation of a bureaucratic caste (who did not swipe power under the feet of the proletariat, for the proletariat was largely decimated by the civil war), the utilization of information based technology would make a planned economy quite sustainable. To give you an idea, there was a point in Soviet history where the Soviet Union could have pioneered international computer science, there were state-funded institutions which saw to their development, and considering the fact that the Soviet Union had some of the best mathematicians in the world (because of its complex planning), the integration of computational technologies would have greatly improved the efficiency of the production process. They could have developed such technologies organically too, because they had the necessary industrial and scientific base.

In the midst of the Soviet Union's collapse, some of the biggest masterminds behind Soviet computational technology, like Vladimir Pentkovski went on to oversee its development in the west. The Pentium processor by Intel was developed under his leadership. It was the chaos of the bureaucracy that disallowed computational technologies to develop in the Soviet Union, which abandoned their creative development because the young Soviet computer science wasn't yet able to mass produce computers in approximation to their military demand, so state simply decided to copy western computers solely for the purpose of their mass-production for military use. Tragic, no?

[Luís Henrique]

Any capitalist company is a central planned economy. The Human Resources Dept. doesn't sell labour power to Research and Development, R&D doesn't sell new gadgets to Production, and Sales doesn't buy from them before selling to the "outer world".

Luís Henrique

[Antiochus]

I don't follow your point about centralisation. Centralisation of resources and distribution should diminish inequality. If you have decentralised distribution and allocation of resources, areas will have to rely on their own resources, which are unequally endowed, cementing inequality between areas. This is also the critique of decentralisation of healthcare currently in the Netherlands.

But yeah, pretty clearly, Soviet-style capitalism is comparatively inefficient and ineffective in terms of capital accumulation, hence lower growth rates and poorer economies in those countries.


Because that isn't what is being spoken about when 'centralization' comes into play. The centralized economies that the OP was talking about (USSR being the key one here) had massive distortions and were run absolutely egregiously. This is how you had disasters like the Aral sea, when centralized bureaucracy came into play, in order to compete with American jean manufacturers.

And it isn't just Tajikistan... areas in Siberia are dirt poor (and were under the USSR). Which places Tim's comment in reverse. Siberia (huge region off course) is immensely rich, Moscow has what exactly? What does St. Petersburg have? And yet the relative wealth of these areas was counter to what logic would dictate.

Now, I admit if everything was 'decentralized' you would inevitably have rich and poor regions based solely upon the resources of those locations, given also that there would be no parasitic imperialism. But imo those problems could simply be solved via an exchange of goods and services, which could very well be centralized as long as the decision making as to which resources are allocated is done at the local level.

[RedMaterialist]

What are some good stats about the successes of planned economics? Many libertarians and anti communists often claim planned economies/nationalized sector is inefficient/leads to shortages/causes famine, etc. Or, even more annoyingly, that no planning can calculate the wants and needs of everyone in society. How do you respond to these claims, and are there any statistics backing any successful planned economies?

The economy of a gigantic, monopolistic corporation is planned down to the minutest detail. If Walmart wants to introduce a new kind of screwdriver it researches every possible detail about cost, marketing, labor, etc. etc. You can read Galbraith's The New Industrial State. He was obviously no Marxist but he understood that central planning is essential to the modern, bureaucratic economy.

Of course, while the capitalists use central planning for themselves, they at the same time condemn it as socialist and demand that the rest of society remain in a state of pre-industrial economics. Therefore, the millions they spend on the myth of the free market, competition, the lonely entrepeneur, the genius of the CEO, etc. They also spend millions on university economic departments which completely ignore the economic role of the monopolistic corporation.

The Chinese have been spectacularly successful in implementing the planned, Leninist style economy: control and direction of the largest sectors of the economy. In a few years the Chinese will have the largest economy, per capita, in the world.

Some planned economies fail. So what?

[RedMaterialist]

Any capitalist company is a central planned economy. The Human Resources Dept. doesn't sell labour power to Research and Development, R&D doesn't sell new gadgets to Production, and Sales doesn't buy from them before selling to the "outer world".

Luís Henrique

And no important decisions are made without thorough cost analysis, risk evaluation, advertising preparation, etc. etc. The influences of the "free market" are reduced as far as possible to the barest minimum.

[Anglo-Saxon Philistine]

I'm no Stalinist, but how exactly would a genuinely planned economy differ from Soviet economics? From what I've read by Trotsky, he seems to believe the soviet economy was a planned economy, just with a parasitic bureaucracy (and not the proletariat) wielding state-power. You being a Trot, what is your stance on the economic structure of the proletarian dictatorship?

The Soviet economy can be called planned only with massive caveats. It still existed in the context of a global market (this is not a criticism; it takes a special sort of naivety to think a state where modern large-scale industrial production is the norm can extricate itself from the global market), for one thing. What we Trotskyists mean to say is that the law of planning operated aside the law of value. In socialism, only the law of planning operates.

As for our differences with the Stalinists on economic questions, I'm afraid that's too broad a subject. Every instance of proletarian dictatorship exists in its own circumstances, that warrant different mechanisms. E.g. China with its massive peasant population certainly would not have had the same policies in place, under a Leninist-Trotskyist leadership, as Germany. We can point to concrete criticism of the triumvirs and the Stalin leadership by Trotsky - i.e. that money was being spent on projects like the Moscow metro whereas many workers had to take dirt roads to work.

Generally, I would underline democratic participation and international integration. The latter doesn't simply mean voting - if we're talking about simple voting the USSR was the most democratic state in the world. It means workers' participation in the planning process, by voting, by oversight, by discussion, by proposals etc. That, of course, depends on the cultural level of the workers.


Any capitalist company is a central planned economy. The Human Resources Dept. doesn't sell labour power to Research and Development, R&D doesn't sell new gadgets to Production, and Sales doesn't buy from them before selling to the "outer world".

But the capitalist company doesn't exist in a vacuum. There is economic planning in any company, but it is planning for profit, not for fulfilling human need as the law of planning implies. And a capitalist company can only function because it sells on the market - so obviously you can't "prove" social planning works by pointing to a company.

[Luís Henrique]

But the capitalist company doesn't exist in a vacuum. There is economic planning in any company, but it is planning for profit, not for fulfilling human need as the law of planning implies. And a capitalist company can only function because it sells on the market - so obviously you can't "prove" social planning works by pointing to a company.

No, indeed not.

What the argument does is a different thing: it upends the idea that capitalism is about "individuals". Competition is among companies - which are big collectives - and not among individuals, and competition among individuals within any given company is either suppressed or strictly regulated for the greater good of the collective (and is, in any way, very, very different from the competition among companies).

Further, it forces the liberal opponent, in order to reject the idea that "planned economies work" to recognise that the functioning of a private company is, and necessarily must be, very different from the functioning of a government - even a pro-capital government. If the government was to function like a company among others, it would of necessity be a dictatorship, like every private company is. So either there are two different levels - public and private - with different rules and procedures, or we are talking about something that is not capitalism.

But of course, for us communists, the issue is not to demonstrate that a "planned economy" (as in, "planned management of value") can work; instead, we stand for the idea that any "economy" that is an "economy of value" cannot "work", be it planned or not.

Luís Henrique