Thread: Understanding Economic Planning?

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  1. #21
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    Speaking of economic planning, I know it hasn't worked that well in the past, but do you all think with all the advances in computer technology it might work out better?
    Yes modern computer technology makes it possible to do detailed planning in kind, with much more detailed material balances than the USSR could do with what was still essentially an adminstrative human operated and calculated plan.

    The claim that a centrally planned economy is highly inefficient, is just a blind reproduction of neo-liberal ideology. The soviet planned economy achieved quite outstanding rates of economic growth until it ran into labour an natural resource shortages in the mid 1970s. Even in the 70 and early 80s, the worst period for the USSR you did not have the stagnation in real living standards for the majority of the people in the USSR that you had in the USA at the same time.
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  3. #22
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    Yes modern computer technology makes it possible to do detailed planning in kind, with much more detailed material balances than the USSR could do with what was still essentially an adminstrative human operated and calculated plan.

    The claim that a centrally planned economy is highly inefficient, is just a blind reproduction of neo-liberal ideology. The soviet planned economy achieved quite outstanding rates of economic growth until it ran into labour an natural resource shortages in the mid 1970s. Even in the 70 and early 80s, the worst period for the USSR you did not have the stagnation in real living standards for the majority of the people in the USSR that you had in the USA at the same time.
    Rather ironic that you would say that calling central planning inefficient is somehow neoliberal, and in the next sentence mention GDP to counter this. Using GDP to measure efficiency of an economic is as neoliberal as it gets. GDP tells us quite little about efficiency, consumer satisfaction, etc.

    The point of an economy should not be economic growth, but consumer wants/needs. Shortages due to the centralised, and thence unresponsive nature, are the problem. Diseconomies of scale are inherit in any centralised economic arrangement.
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    Rather ironic that you would say that calling central planning inefficient is somehow neoliberal, and in the next sentence mention GDP to counter this. Using GDP to measure efficiency of an economic is as neoliberal as it gets. GDP tells us quite little about efficiency, consumer satisfaction, etc.

    The point of an economy should not be economic growth, but consumer wants/needs. Shortages due to the centralised, and thence unresponsive nature, are the problem. Diseconomies of scale are inherit in any centralised economic arrangement.
    Sorry but this is just plain sillyness. If you are in a poor predominantly agricultural economy as Brazil and Russia were in the 1920s, the only way to meet consumer needs is to increase the level of material production. That implies growth, and the more rapid the growth the sooner the needs can be met.

    There are indeed all sorts of problems with measuring GDP growth to do with the basket of goods you use as your index, but the relative rates of growth achieved by the Soviet planned economy and the unplanned capitalist economies of of South America ( which is the relavant comparator ) is not in doubt. If you dont like GDP as a measure look at the availability of classes of consumer goods to the general population and the improvements are clear to see. GDP growth does indeed understate the benefits that the Soviet Population gained from free healthcare and free state education, as these will tend to be underestimated compared to a country in which these are run by the private sector. But even using this relatively unfavourable measure the superiority of socialist planned economy is quite evident.
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    The problem is poor planning, GOSPLAN sucked at planning. Just take the production of buses you had GAZ, ZiL, Laz, LiAZ, Neman, RAF, KAG and KAvZ (I might be forgetting one or two) all designing and producing their own buses and that was just the USSR the rest of the Comecon had their own producers of buses (it gets worse when you look at trucks, vans and cars). This is the so called "centralized plan" of the USSR where you have 8 bus manufactures in the USSR all competing for funding from GOSPLAN thus little cooperation to create a unified bus design incorporation the engineering talent across the 8 manufactures.
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    Credit Counseling Companies Tackle Consumer Debt, and Governments of have brought forward various such provisions in their economic planning.
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    that is a much more valid criticism of the Soviet and Comecon economies. That the planning was under centralised and Gosplan was too weak relative to the industrial ministries to impose a More rational plan.
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    On the other hand in computing there was probably over centralisation the decision to standardise on the unified range stymied the development of the more promising BESM range.
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    Sorry but this is just plain sillyness. If you are in a poor predominantly agricultural economy as Brazil and Russia were in the 1920s, the only way to meet consumer needs is to increase the level of material production. That implies growth, and the more rapid the growth the sooner the needs can be met.
    Obviously, but using economic growth as the sole measurement of economic efficiency is simply wrong. Moreover, economic growth alone is not a guarantee that the product of economic growth (i.e. increased number of goods) will be allocated efficiently to meet consumer wants and needs.

    For example, if a country undergoes rapid economic growth but fruits of this growth is almost exclusively beneficiary to the rich then economic growth is rather meaningless. Similarly, if a country with a centrally planned economy undergoes rapid economic growth, but shortages and waiting lines persist, then economic growth is again rather meaningless. More goods does not mean that they are allocated where they are most needed/wanted.

    There are indeed all sorts of problems with measuring GDP growth to do with the basket of goods you use as your index, but the relative rates of growth achieved by the Soviet planned economy and the unplanned capitalist economies of of South America ( which is the relavant comparator ) is not in doubt. If you dont like GDP as a measure look at the availability of classes of consumer goods to the general population and the improvements are clear to see. GDP growth does indeed understate the benefits that the Soviet Population gained from free healthcare and free state education, as these will tend to be underestimated compared to a country in which these are run by the private sector. But even using this relatively unfavourable measure the superiority of socialist planned economy is quite evident.
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    What I wonder about how the socialist economy will be planned (decentralized) is how we will put things in the right place, in the right time, and in the right amounts.

    More simply, how will various cities and whatnot communicate to other places what they need and so forth? Voting? How would that work?

    Sometimes I begin to wonder whether or not some theories on economies are utopian or not, based upon simply walking into a super market and seeing tons and tons of good from a million different places.
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    there were issues with consumer pricing in the USSR which did lead to queues,but that has only an incidental relationship to planning. A planned economy can use market clearing prices for consumer goods.
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    that is a much more valid criticism of the Soviet and Comecon economies. That the planning was under centralised and Gosplan was too weak relative to the industrial ministries to impose a More rational plan.
    On the other hand in computing there was probably over centralisation the decision to standardise on the unified range stymied the development of the more promising BESM range.
    The problem was the plans never had any end goals. even the USSR space program was directionless which resulted fatalities as the USSR space program only understood meeting short term milestone rather then moving towards a long term goal, for example China's space program is gearing up to land their astronauts on moon as they see being second to land on the moon is still a major accomplishment.
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    Hey comrades
    Maybe this should go under the economics section, but seeing as it's fairly foreign to me and I'd like to learn some more from you guys, I thought this seemed appropriate enough!

    Questions about economic planning ....
    So, I get the gist of it. I'd like to think of myself as a market socialist, but I'm starting to lean more towards a planned economy. The idea of overcoming overproduction, duplicate products, etc and organizing an economy based on needs seems pretty good, but how would a planned economy go about being administered?

    (maybe if my idea of economic planning isn't really the real definition of economic planning, maybe you could define it for me and clear that up )

    What structure do you think a planned economy should take and why?
    If a planned socialist economy is to be successful it must be completely democratic.
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    One of the many failures of capitalism is due to the fact that there is a completely unplanned economy.
    Rich Man/Poor Man. The Lucky and The Unlucky. The Classic "Boom and Bust Cycle." Anything goes!

    But then it occurs to silly me that there is, in fact, a planned economy after all.

    It is planned to favor the wealthy!
    money is to politics as fertilizer is to garden weeds.
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  16. #34
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    One of the many failures of capitalism is due to the fact that there is a completely unplanned economy.
    Rich Man/Poor Man. The Lucky and The Unlucky. The Classic "Boom and Bust Cycle." Anything goes!

    But then it occurs to silly me that there is, in fact, a planned economy after all.

    It is planned to favor the wealthy!
    Individual and corporate capitalist ventures are usually very carefully planned (of course, always to the advantage of the capitalist or the state).

    The anarchy or disorder of capitalist production arises out of clashing and contending commercial interests between capitalists and from the inevitable class antagonism that the arbitrary division of labor's product is bound to produce.

    The success of a planned economy is guaranteed only if the productive capacity of society is publicly owned and democratically managed by the workers themselves directly from their workplaces.
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  18. #35
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    there were issues with consumer pricing in the USSR which did lead to queues,but that has only an incidental relationship to planning. A planned economy can use market clearing prices for consumer goods.


    If a planned socialist economy is to be successful it must be completely democratic.


    What I wonder about how the socialist economy will be planned (decentralized) is how we will put things in the right place, in the right time, and in the right amounts.

    More simply, how will various cities and whatnot communicate to other places what they need and so forth? Voting? How would that work?

    Sometimes I begin to wonder whether or not some theories on economies are utopian or not, based upon simply walking into a super market and seeing tons and tons of good from a million different places.



    [P]olitics *should* be about the issues and policy, anyway -- these days we can even realistically potentially transcend *representational democracy* and go straight to *direct participation*, as over discussing and deciding-on the issues themselves (thanks to communications technology), as on a discussion board like RevLeft, perhaps.

    So, I'll suggest a proportional weighting, per person, over each-and-all of a mass-contributed pool of issues -- each participant has 100 points to distribute over all issues put forth, for the sake of prioritization. (Issues from the list are then prioritized according to most points received from all participants.)

    Centralization-Abstraction Diagram of Political Forms

    http://postimage.org/image/35ru6ztic/


    [17] Prioritization Chart

    http://postimage.org/image/35hop84dg/
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  20. #36
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    What I wonder about how the socialist economy will be planned (decentralized) is how we will put things in the right place, in the right time, and in the right amounts.

    More simply, how will various cities and whatnot communicate to other places what they need and so forth? Voting? How would that work?

    Sometimes I begin to wonder whether or not some theories on economies are utopian or not, based upon simply walking into a super market and seeing tons and tons of good from a million different places.
    Good question. It's a very natural question and I think is one that comes up a lot in capitalist societies.

    I think a lot of leftists come up with very impressive and elaborate answers. But what's even more striking to me is that capitalists have already basically figured out how to approach this.

    You should look into the stable marriage problem:

    http://en.wikipedia.org/wiki/Stable_marriage_problem

    The basic premise is it's sort of a way to make sure that everyone gets at least some of what they want subject to the constraint that other people might want the same entity. It's already used on a wide scale in for example matching hospitals to medical trainees.
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    la luz
    de un Rojo Amanecer
    anuncia ya
    la vida que vendrá.
    -Quilapayun

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