Thread: Efficiency of a centrally planned economy

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    Default Efficiency of a centrally planned economy

    Would a centrally planned economy be able to analyze millions of inputs and allocate resources with the same efficiency of a market? How? If not, would market socialism be a viable alternative ?
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    Probably not, but neither can or does capitalism. Markets are highly inefficient at allocation of resources. If we can avoid central planning, I'd advocate it, but central planning is much better than the market system.
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    Probably not, but neither can or does capitalism. Markets are highly inefficient at allocation of resources. If we can avoid central planning, I'd advocate it, but central planning is much better than the market system.
    How are markets inefficient and why is central planning better?
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    Alnaqi,

    First, I recommend the use of the search function on this site to see if this has been addressed before. It has.

    However, I still offer a new response, in the spirit of not some anonymous authority figure, but a cautious helper to an unknown stranger.

    Your question:

    Would a centrally planned economy be able to analyze millions of inputs and allocate resources with the same efficiency of a market? How? If not, would market socialism be a viable alternative ?

    and then your subsequent leading question:

    How are markets inefficient and why is central planning better?


    To begin, you are starting with the wrong question. The first question you should be asking is, "do markets actually even exclude central planning?", and the obvious answer is "No"; for example, the so called global "market" is currently about as "centrally planned" as it can possibly be. Comrade Stalin would have been impressed. However, this center doesn't consist of any institutions that are accountable to the public; they are based on satisfying private, namely bourgeois interests, which just so happen to be -- for "just" reasons -- brutally antagonistic to the common good (I'll give you a hint. Think "oppression for the sake of maintaining the status quo").

    In asking about the "allocation" of resources, you fail to comprehend the purely ideological dimension of your current mode of thought. If your main concern really were the "efficient allocation of resources" (which I sincerely doubt), what you are really asking is not a political, but a technical question.

    Let me ask you this: whether a group of 5 people, or a group of 5 million people are involved in the planning of (global) economic strategies, what difference does it make? What matters is who can solve the problem best. Yet, what is best for the bourgeosie -- the current ruling class -- is not what is best for the emerging class of the proletariat. Not by a railroad gun's shot radius, no!

    You see, your question is really to be answered in purely technical terms: through engineering, the institutionalization of a critique of ideology (as a sort of aufhebung dynamite), and careful consideration of who our leaders represent and what they stand for. It's not what the leaders' "jobs" are. When we become socialists, there are no "jobs" in the normal sense. Call it a part of how we changed our minds. Jobs are ways of making money for most. For us, they are a way of organizing, educating, and agitating. It also just so happens that socialists tend to have little interest in acquiring finance capital. More valuable economies to us are economies like ontological beliefs, what topics are maintained in the realm of the essential, institutionalized traditions, and so forth.

    You see, Stranger, communism is, at its core, extremely practical -- for to us, truth has no externality; we are capable of acknowledging the actual possibility of changing ones mind.

    Do you think people just accidentally become communists? Communism is our tool for gaining the ability to plan things like the economy SCIENTIFICALLY. No longer would ones livelihood be dependent on ones next paycheck, but our brothers and sisters instead would achieve the capacity to live UN-alienated lives; lives where their relationships with one another are not different from their relationship to what Hegel calls Absolute Spirit, and what we may naively refer to here as True Consciousness.

    True Consciousness is an evolving constellation of ideas, ideas which shape what we think is real. It's your beliefs. But not just the beliefs you know you have -- no -- not even close: it's almost entirely about the beliefs you don't know about. These are the unknown unknowns; the things you don't even know you don't know! A 19th century Pink Floyd might've called it The Dark Side of God; and Dionysus the psueudo-Areopagite pronounced it quite uniquely through his apophatic, negative theological treatise, The Cloud of Unknowing, as the highest form of knowledge: more specifically, dialectic (un/)knowledge of Absolute Spirit as manifest in the realm of man.

    Yet, there is a way of discovering some things about that non-that. Ask yourself: "What is it that I don't know I don't know?" Is there any way of consciously being aware of what it is I don't know that I don't know?"

    Could something so fundamental as [who], [what], [why], [when], [where], [how] you yourself -- Alnaqi98 -- are, be of any use to this line of inquiry?

    Welcome to the forum, Stranger.

    -Riot!
    Last edited by Riot; 4th October 2016 at 06:41. Reason: formatting
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    Would a centrally planned economy be able to analyze millions of inputs and allocate resources with the same efficiency of a market? How?

    I agree with Riot that this is a *loaded question* to begin with -- 'efficiency' in this context suggests that many significant material factors, like the use of environmental resources, would be relegated to off-sheet 'externalities', like they are today under capitalism, if the guiding aim of 'efficiency' is paramount in consideration.

    Taking long-term environmental 'health' into account is inherently 'inefficient' since it doesn't directly relate to human-oriented projects and productivities, for example. (Any given socio-political *objection* to a course of things would be *another* 'externality', since objections run *counter* to the fixed productive goals of any given project, by definition.)

    I think we need to realize that, due to the human-interest *complexity* around any viable post-capitalist political economy, such post-revolution endeavors will always be more *qualitative* than *quantitative* in character and consideration.


    Order - Complexity - Complication - Chaos






    And here's from my model:



    consumption [demand] -- Every person in a locality has a standard, one-through-infinity ranking system of political demands available to them, updated daily

    consumption [demand] -- Basic human needs will be assigned a higher political priority by individuals and will emerge as mass demands at the cumulative scale -- desires will benefit from political organizing efforts and coordination

    ---



    If not, would market socialism be a viable alternative ?

    No, so-called 'market socialism' is an inherent *contradiction* since it would rely on *exchanges* (and thus inherent exchange-values) at some level / scale, which is the definition of commodity-production -- *not* a communist-type political economy.

    'Market socialism' is also unable to resolve the distinction / friction between the *public sector* and the *private sector* -- to what extents could individuals self-aggrandize, and who / what interests would adequately represent broader public interests for a 'commons' of free-production (that would naturally be contrary to *private* interests) -- ?



    [W]hether a group of 5 people, or a group of 5 million people are involved in the planning of (global) economic strategies, what difference does it make?

    Taking this statement on its own, it would make a *lot* of difference, insofar as the size of the pool of participants over collective-planning matters.

    While you're correctly initially objecting to the post-capitalist political-economy concept of 'efficiency', you're then falling into its trap by accepting that 'a correct matrix' of inputs and outputs could be *abstractly* arrived-at -- like a 'blueprint' -- as by a dedicated (though substitutionist) 'panel of administrative experts'.

    What's called-for here is *mass bottom-up participatory planning', since only people / consumers know their own needs the best, which should be the *driving force* ('organic demand')(my wording) for subsequent liberated-production.

    And since only *workers* know their own *production* the best, that should be another, separate 'realm' of social consideration, again bottom-up in scale (though bottom-up-to-top-down in potential worldwide *coordination*, for overall scales of efficiency).
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    Taken alone, this statement is indeed quite ambiguous. Even more though, when I qualify it in the next line by saying what matters is who can solve the problem "best", I obscure the point I'm trying to make even more by not being precise in what type of organizations I'm suggesting. Your suggestion of "bottom-up participatory planning" is, I agree, ideal. However, I can easily imagine a situation where that is not a feasible approach, yet alternative social organizations ARE capable of being the, to use your language, ""driving force" for subsequent liberated-production". Maybe we're just playing with semantics though, as you later mention "bottom-up-to-top-down" *coordination*, which sounds like you acknowledge that once a mass uprising is done, what matters is, to use Zizek's term, "the morning after"; the new state of normalcy; the qualitative changes achieved.
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    Taken alone, this statement is indeed quite ambiguous. Even more though, when I qualify it in the next line by saying what matters is who can solve the problem "best", I obscure the point I'm trying to make even more by not being precise in what type of organizations I'm suggesting.

    Your suggestion of "bottom-up participatory planning" is, I agree, ideal. However, I can easily imagine a situation where that is not a feasible approach,

    Please feel free to elaborate on this, then.

    I'll reiterate that -- from my model -- if each person simply 'ranks' / prioritizes their demands every day as to which is first, second, third, and so on, then that would make *all* people's daily lists of demands *aggregatable*. It would be a common *standard* by which demands could then be tallied on a mass basis, with the aggregated results by rank position (#1, #2, #3, etc.) showing definitively what people are demanding-in-common over any given area.



    yet alternative social organizations ARE capable of being the, to use your language, ""driving force" for subsequent liberated-production".

    You're continuing to be vague -- what 'alternative social organizations' -- ?



    Maybe we're just playing with semantics though, as you later mention "bottom-up-to-top-down" *coordination*, which sounds like you acknowledge that once a mass uprising is done, what matters is, to use Zizek's term, "the morning after"; the new state of normalcy; the qualitative changes achieved.

    We're talking about different time-frames, though -- you're referring to an immediate post-revolution calendar day, while I'm referring to a general, mature post-capitalist era of 'bottom-up-to-top-down coordination' (imagine a three-legged stool, but with potentially millions and billions of legs of support).

    (And feel free to elaborate on what you think is merely semantics here.)


    labor credits framework for 'communist supply & demand'

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    One situation where a bottom-up participatory planning approach (if I understand what you mean by the term correctly) was deemed unfeasible was by the Bolsheviks, culminating in the October Revolution. Whether or not vanguardism is an effective strategy or not depends on the situation. Then again, does vanguardism even necessarily exlude "bottom-up participatory planning"? I don't think it does.



    The aggregating of demands is an interesting idea. It seems to be addressing a problem of knowing what the majority are explicitly demanding in any given region. Seems like a, as you say, "mature post-capitalist era" structure, by necessity though.


    "We're talking about different time-frames, though -- you're referring to an immediate post-revolution calendar day, while I'm referring to a general, mature post-capitalist era of 'bottom-up-to-top-down coordination' (imagine a three-legged stool, but with potentially millions and billions of legs of support)."


    Maybe I'm missing the point, but it sounds like you're suggesting a more or less permanent state of revolution, to be culminated in some far distant future, where then and only then is it justified to have "bottom-up-to-top-down coordination'? I'm inclined to believe that, once semantic issues like what you mean by bottom-up-to-top-down coordination are cleared up, we are likely theoretically of quite a similar mind.
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    One situation where a bottom-up participatory planning approach (if I understand what you mean by the term correctly) was deemed unfeasible was by the Bolsheviks, culminating in the October Revolution.

    You're continuing to be unclear -- here's the historical facts:



    During this time, urban workers began to organize into councils (Russian: Soviet) wherein revolutionaries criticized the provisional government and its actions. The October Revolution in Petrograd overthrew the provisional government and gave the power to the local soviets. The Bolshevik party was heavily supported by the soviets. After the Congress of Soviets, now the governing body, had its second session, it elected members of the Bolsheviks and other leftist groups such as the Left Socialist Revolutionaries to key positions within the new state of affairs. This immediately initiated the establishment of the Russian Socialist Federative Soviet Republic, the world's first self-proclaimed socialist state.

    The revolution was led by the Bolsheviks, who used their influence in the Petrograd Soviet to organize the armed forces. Bolshevik Red Guards forces under the Military Revolutionary Committee began the takeover of government buildings on 24 October 1917 (O.S.). The following day, the Winter Palace (the seat of the Provisional government located in Petrograd, then capital of Russia), was captured.

    ---



    Whether or not vanguardism is an effective strategy or not depends on the situation. Then again, does vanguardism even necessarily exlude "bottom-up participatory planning"? I don't think it does.

    I would actually say that they're roughly *synonymous* -- there are two different timeframe contexts here, though, that of *pre*-revolution (necessitating a mass-revolutionary-worker-participatory 'vanguard'), and that of *post*-revolution, where 'bottom-up participatory planning' would refer to actual *society-wide* mass planning and liberated-production in common.



    The aggregating of demands is an interesting idea. It seems to be addressing a problem of knowing what the majority are explicitly demanding in any given region. Seems like a, as you say, "mature post-capitalist era" structure, by necessity though.

    Yes, thank you -- that's basically what I was aiming to address.

    I'll note, though, that it's not so much about discerning a conventional 'majority' (vs. minorities), as much as it's displaying which 'initiatives', 'demands', 'proposals', 'projects', 'production runs', 'funding', 'debt issuances', 'policy packages', '[production] orders', '[production] requests', and 'slot donations' are being higher-ranked than everything else.

    So for 'Locality A' of 20,000 people there may, on one day, happen to be 1,324 people who put 'Proposal A-010' into rank position #1. There may, at the same time, be 894 people who put 'Proposal A-010' into rank position #2, while also 'Proposal A-017' happens to be ranked as #1 by 1,209 people, with the same 'Proposal A-017' getting rank position #2 from 5,091 people.

    Obviously 'Proposal A-010' was most popular at rank position #1, while 'Proposal A-017' was most popular at rank position #2.

    What all this means is that everyone could clearly see what's being most-demanded, and society, collectively, through its individuals' own self-determination, would respond appropriately, and would most likely pay the most attention to and give the most efforts to Proposals A-010 and A-017 for finalization, since they've been most-indicated at rank positions #1 and #2, respectively.

    Since a post-capitalist social order would be most concerned about collective liberated-production for the common good, this kind of daily demands-lists aggregation would be a good method for transparently showing what *kinds* of production people are most-interested in for any given area(s).


    ---



    We're talking about different time-frames, though -- you're referring to an immediate post-revolution calendar day, while I'm referring to a general, mature post-capitalist era of 'bottom-up-to-top-down coordination' (imagine a three-legged stool, but with potentially millions and billions of legs of support).


    Maybe I'm missing the point, but it sounds like you're suggesting a more or less permanent state of revolution, to be culminated in some far distant future, where then and only then is it justified to have "bottom-up-to-top-down coordination'? I'm inclined to believe that, once semantic issues like what you mean by bottom-up-to-top-down coordination are cleared up, we are likely theoretically of quite a similar mind.

    I won't attempt to comment on a possible timeframe for decisive revolution over bourgeois rule, but, to explain, 'bottom-up-to-top-down coordination' means that liberated workers themselves, necessarily on-the-ground, would each have unfettered 100% self-determination over what they do with their potential labor efforts.

    In parallel, those who *are* available-and-willing to contribute their liberated labor efforts to any given project -- large- or small-scale -- would then, by virtue of their on-the-ground participation, also each have their own proportional socio-political *administrative* input -- as for collectively determining *how* (finalized) 'Policy Package A-010' should be implemented by themselves, or for (finalized) 'Policy Package A-017', etc.

    (The 'bottom-up' part is the initial increment of calendar time used for defining and discussing mass-popular demands, initiatives, and proposals, while the 'top-down' part is the *finalizing* of proposals into policy packages, for the actual implementation of doable projects and production runs by specific liberated laborers on specific time schedules.)
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    Would a centrally planned economy be able to analyze millions of inputs and allocate resources with the same efficiency of a market? How? If not, would market socialism be a viable alternative ?
    Centrally planned economies already exist under global, centralized capitalism. Capital now exists in a gigantic network of interconnected corporations and bourgeois governments organized in vast computer systems.

    The trick is not to determine whether a centrally planned economy can work, but rather to appropriate the existing one and run it for the benefit of the working/unemployed classes.
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    [T]hose who *are* available-and-willing to contribute their liberated labor efforts to any given project -- large- or small-scale -- would then, by virtue of their on-the-ground participation, also each have their own proportional socio-political *administrative* input -- as for collectively determining *how* (finalized) 'Policy Package A-010' should be implemented by themselves, or for (finalized) 'Policy Package A-017', etc.

    (The 'bottom-up' part is the initial increment of calendar time used for defining and discussing mass-popular demands, initiatives, and proposals, while the 'top-down' part is the *finalizing* of proposals into policy packages, for the actual implementation of doable projects and production runs by specific liberated laborers on specific time schedules.)

    Just wanted to note that this last part may sound somewhat 'authoritarian' to some, depending on interpretation -- to clarify, the 'top-down' aspect would be the broad-ranging *coordination* efforts of those liberated workers who actively *participate* in whatever project according to its finalized 'policy package' specifics.

    Any detailed, finalized or close-to-finalized policy package would spell-out the specifics of *socially necessary work roles* for the project, but wouldn't necessarily have to spell-out the specifics of *who* / which particular individuals should or would participate. Once the generic *work roles* are defined for the project, the 'bottom-up' aspect would then *complement* the policy package, meaning that available-and-willing liberated laborers could either sign-up for those work roles, at certain schedules, or not.

    If the project was large-scale and multi-locality in scope, the work roles could potentially be fulfilled by liberated laborers *anywhere in the world* as a joint-effort. All workers-collective-self-coordination within the project, at whatever scale, could be considered to be 'liberated labor internal' matters. (See the graphic at post #7.)



    communist administration -- Distinct from the general political culture each project or production run will include a provision for an associated administrative component as an integral part of its total policy package -- a selected policy's proponents will be politically responsible for overseeing its implementation according to the policy's provisions

    communist administration -- Assets and resources are collectively administered by a locality, or over numerous localities by combined consent [supply]

    labor [supply] -- Work positions are created according to requirements of production runs and projects, by mass political prioritization

    So, finally, for an example, both 'Policy Package A-010' and 'Policy Package A-017' for Locality A, may be almost *identical* -- let's say pertaining to the making of steel -- but 'A-010' is *broad-based* (multi-locality) in its scope of where the work roles come from, while 'A-017' is strictly *localist* in scope, addressing just one steel plant, with local work roles only.

    Head-to-head the *larger* (A-010) plan is shown to win-out in the scenario I provided, versus A-017. This would be a transparent mandate to available-and-willing liberated laborers at *several* different steel sites, perhaps across an entire continent or whatever.

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