Talk:Planned economy

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Brief notes on advantages and disadvantages of the following economic systems. Market Economy, Command Economy, Mixed Economy.

Also, whomever iswriting this up should make a stub for palace economies. I have no Idea where to even look for such a thing.
~ender 2003-09-10 03:07:MST

Command and Planned Economy definitions

I got out my econ notes from a while back, if someone wants to rewrite the article with these definitions assuming they get no objections, go ahead:

There are two different ways to catergorize an economy into two.

Little Regulation Heavy Regulation

and

Low Government Expenditure High Government Expenditure

Heavy regulation AND high government expenditure are command economies, heavily regulated economies are planned (price wages enforced by the Nazis for example (although I didn't mean the example to be so extreme)), little regulation is decentralized, low government expenditure is capitalist, high government expenditure is socialist, and free market is both low government expenditure and little regulation.

Note that these are very subjective, and are not as simple as saying "Above 50% government expenditure as a portion of the GDP is socialist," because France has above 50% government expenditure as a portion of GDP and some people refer to it as Capitalist and some as Socialist. Similarly the argument goes for little and heavy regulation, some may say that the U.S. is decentralized while others are extreme enough to say it's a planned economy, the difference in opinion comes from the subjectivity of the two terms (I, for example, say that the U.S. is a planned economy because I'm pissed off and opposed to the regulations on power companies; but that's my opinion). China considers itself Socialist, while many other consider it Capitalist. Some consider the Soviet Union Capitalist because of it's Black Market activities. And so on.

In other words:

Little Regulation AND low government expenditure=Free Market Economy

Little Regulation=Decentralized Heavy Regulation=Planned

and

Low Government Expenditure=Capitalist High Government Expenditure=Socialist

High government Expenditure AND heavy Regulation=Command Economy

Oh! And a mixed economy is any economy that is thought of as a mix between socialist and Capitalist, technically this is all countries, but it is also a subjective factor (Subjective in that the percentiles aren't really placed, it's not like below 10% government expenditure is Capitlist, from 10-90 is mixed, and Socialist is >90).

If no one else ends up objecting to this, I'll change the article according to this, and that poor stub of a Command Economy article.fephisto 13:07, December 5, 2005

Planned economy working example

Cadr, if you can't give an example of a working planned economy, your last rv is not really a POV fixing revert, I am afraid. The planned economies known examples so far are corruption friendly and create a secondary market, just as Lussmu wrote. --Piotr Konieczny aka Prokonsul Piotrus 16:09, 7 Aug 2004 (UTC)

To say that planned economies "don't work" is historically false. In reality, most of the world's planned economies stopped working around the year 1980 - but they had worked very well for many decades before that. And some planned economies had greater achievements than any market economy ever had (for example, the Soviet economy in the 1930s achieved the highest growth rate of any economy in history; planned economies resulted in extremely fast industrializations, and many scientific and technological "firsts" - such as the first artificial sattelite, the first man in space, etc). Furthermore, it is wrong to consider the Soviet system as the model of a planned economy. The Soviet Union had a certain kind of a planned economy, but many different kinds are also possible. After all, there are many different methods of planning. -- Mihnea Tudoreanu 14:25, 24 Nov 2004

On behalf of the public?

Yeah, right... But lets just assume for a moment you were right. It would still be POV. Please review Wikipedia:NPOV tutorial. [[User:Sam Spade|Sam Spade Arb Com election]] 13:16, 24 Nov 2004 (UTC)

I suggest you check the meaning of the phrase "on behalf of". It doesn't necessarely mean "for the benefit of" (although that is a possible meaning). I used it with the meaning of as an agent of. -- Mihnea Tudoreanu 14:25, 24 Nov 2004 (UTC)

No matter how you look at it, it implies a positive intent. That is unnacceptably POV, esp. when so very many people (I would argue most people) feel that it is done on solely behalf of the ruling party, and to the clear detriment of the unfortunate lower classes. [[User:Sam Spade|Sam Spade Arb Com election]] 14:44, 24 Nov 2004 (UTC)

They may feel that way about Soviet-style systems, but this article discusses the concept of a planned economy in general. At any rate, since this little phrase seems to mean so much to you, I will look for a more NPOV synonym. (oh, and for the record, the unfortunate lower classes of Russia and Eastern Europe were much better off before 1991 than today - but we've been over this already) -- Mihnea Tudoreanu 15:05, 24 Nov 2004 (UTC)

"Whose agents" is irrelevant to the notion. In known real examples they act as agents of state, who claim to be an agent of "working people", not the whole "public". You may as well have a planned economy in a banana monarchy; the definition doesn't preclude that. 16:41, 24 Nov 2004 (UTC)

Nevertheless, the fact that most planners are (or at least claim to be) agents of the people must be mentioned. I'll add "sometimes" in there. -- Mihnea Tudoreanu 17:46, 24 Nov 2004 (UTC)

"On behalf of the public" has no relation to "planned economy". Planning may be done on behalf of monarch or dictator. It is only coincidental that in known planned economy they acted allegedly on behalf of "working people". Mikkalai 19:13, 27 Nov 2004 (UTC) www.freewebs.com/xtimerx

Definition

The definition is tautology. Also, it is wrong. In Soviet Union economic decisions were made by Party, based on political goals and economic information. Gosplan did nothing but implement Party's decisions in detail. Of course, you may call the Soviet Communist Party the "planners", but again, this is circular logic. User:mikkalai 18:35, 30 Nov 2004 (UTC) (smth wrong. I cannot login normally)

Missing

I miss some discussion of the Common Agricultural Policy of the European Union and the state monopoly on foreign commerce of the Byzantine Empire (until broken by the Italian maritime republics). Aren't those planned economies? --85.84.25.113 15:42, 25 Jun 2005 (UTC)

Remove Socialism portal

A planned economy is not inherently Socialist so the Socialism portal should be removed. Capitalists can chose to coordinate a planned economy together and monopoly capitalists implicitly plan out their economy, a couple example of a Capitalist planned economy are the way coal towns were typically run during the 1800's or how the Congo was privately run from 1885-1908. Mercantile Monarchy's are a form of planned economy, furthermore, the USSR and similar countries had/have a State Capitalist planned economy.

Command vs Planned Economy Table

The table at the definition of command or planned economy is backwards from what the definition says. I think the chart is wrong. But, I am not confident enough to edit. Thanks Cliff

"Command economy"

The "Command economy" section of the article, and the article's treatment of the term "command economy" in general, is in an extremely confused state.

The lead seems to define a "command economy" as a planned economy which uses Soviet-style planning. But then the first paragraph of the "Command economy" section defines "planned" and "command" economies, contrasting the two, implying they are separate types of economy. The second paragraph of the section opens with "This is contested by some Marxists," which is cited to two texts... the excerpts of which say absolutely nothing about command economies, or the distinction between planned/command economies. What are they contesting, then? The rest of the second paragraph is about decentralized planned economies, which maybe implies an understanding of "command economy" as meaning a centralized planned economy, but does not clarify what is being contested. Then the fourth paragraph says it's been contested whether the Soviet system was actually a planned economy at all, throwing things into even deeper, unexplained confusion.

Is a command economy a type of planned economy? Are the two terms synonymous? Are they different things entirely? The article currently contains material that seems to imply all of these contradictory things- likely as the residue of many editors with different understandings of the term adding new material and removing old material, without harmonizing the article as a whole. (The confusion is reinforced by the fact that "command economy" currently redirects to "planned economy" (this article)- and there's a lingering wikilink to "command economy" in the lead, which is thus a recursive link.)

I am not personally in a position to revise/harmonize the article, not having any particular specialist knowledge on the subject. I came to this article hoping to learn what distinction, if any, there is between a "command" and a "planned" economy, and am simply more confused about the matter than ever. Yspaddadenpenkawr (talk) 16:26, 1 May 2023 (UTC)

A command economy is a planned economy, but not the other way around, as stated in the lede. A planned economy is an economic system in which the government regulates/plans distribution/prices/production, etc.. A command economy is a planned economy that also has substantial state ownership. This is backed by the sources in the lede.

You're right that this is the result of years of cruft. It used to be that command economy was its own separate page, then it was merged with this page due to confusion about the difference between the terms, and then it got shifted to a subsection as people realized that the terms were not the same, and each time the cruft has built up one atop the other. The article needs rewrite. Fephisto (talk) 21:04, 1 May 2023 (UTC)

That's more or less the understanding I had gleaned elsewhere. Thanks for confirming that the article actually is kind of a mess, and that I wasn't just inable to parse it correctly. Yspaddadenpenkawr (talk) 23:34, 1 May 2023 (UTC)

A planned economy is an economic system in which the government regulates/plans distribution/prices/production, etc.. A command economy is a planned economy that also has substantial state ownership

This sounds like a distinction without substance, the substitution of the word "government" with the spookier sounding "state". KetchupSalt (talk) 13:44, 2 May 2023 (UTC)

>This sounds like a distinction without substance

A command economy is a planned economy, but not the other way around, as stated in the lede.

>the substitution of the word "government" with the spookier sounding "state".

Here is the verbatim text from the source (Webster): "an economic system in which activity is controlled by a central authority and the means of production are publicly owned." Are you saying that the article should use the word government instead of state? That sounds fine to me... Fephisto (talk) 18:43, 2 May 2023 (UTC)

Hmm. There being a central authority of some form is a feature common to all forms of planning, including bottom-up ones, since some final set of allocations has to be arrived at. Otherwise you have exchange. This point is raised by Alec Nove and Amadeo Bordiga and probably others.

That leaves the ownership question. Certainly with for example the USSR the ownership was public. But it is not the case that the economy was "commanded" to be in a certain position, the actual planning process being far more involved and iterative. And also it is perfectly conceivable that you could have public ownership and planning but with other political systems, a point that is raised in the article if I remember correctly.

A dictionary entry does not really reflect the state of the literature on the subject is perhaps the point I'm making. Perhaps we should say "Soviet-style planning"? Or we could take Michael Ellman's term: "the traditional model" (but that doesn't really roll of the tongue as well). KetchupSalt (talk) 21:19, 2 May 2023 (UTC)

The history on this article has been very back-and-forth over a decade now about whether or not command economy should be kept as a distinction at all (it used to be a separate page before discussions about whether it should be kept at all). Therefore, in this regard, the dictionary definitions are very useful in pointing out that the two subjects should NOT be homogeneized. First and foremost, I hope that at least that is respected.

That being said, the dictionary entry is a very traditional and respectable place to start in the lede, at least. In Wikipedia terms, as far as WP:RS goes, it'd be an uphill battle to argue against Miriam-Webster. If you want to provide more nuance further in the article, by all means, but as @Yspaddadenpenkawr mentioned, the article is already pretty confusing for newcomers, needs a rewrite, and ideally should focus on entry material and resources that we can already find that are pointing out that command economies are at the very least distinct concepts or even subsets of planned economies.

Fephisto (talk) 01:04, 6 May 2023 (UTC)

I can actually add here that for example Nove uses 'command' with quotation marks. From The Economics of Feasible Socialism Revisited (2nd edition):

Indeed what seems to have happened is that, in the absence of terror and a despot, the units of which the economy is composed acquire increasing power, and become what some Soviet critics have called ‘feudal principalities’ (sectoral or territorial), while others speak of a nominally ‘command’ economy which has turned into a ‘bargaining economy’.

This makes me suspect that by "command" what is actually meant is "planning under Stalin's tenure". This transition to "bargaining" takes place in the tail years of Krushchev, and fully blossoms in the cynicism under Brezhnev. Or so is my understanding at least. The change under Krushchev is one from ministerial/industrial to regional (sovnarkhoz), something that is partly reversed later with Brezhnev. Therefore it might be better to talk of specific examples in specific eras. Perhaps. Either way it is indeed confusing. KetchupSalt (talk) 20:44, 7 May 2023 (UTC)

Failure of planned economies

Proposed addition to lede:

Planned economy has led to wide-spread poverty in Soviet Union and Eastern Europe, and was the main reason for the collapse of Communism.

81.214.107.198 (talk) 18:17, 14 June 2023 (UTC)

1) This is false, as evidenced by the massive growth in productivity alone 2) The source does not say this, the word "poverty" does not appear until page 28. Moreover the text is wrong on a number points, for example in claiming that

[Central planners] decided what goods and services were produced, how much was produced, and who produced and consumed these goods and services.

Taking the USSR as an example, it is not the case that Gosplan decided, completely without any kind of feedback, what final goods were to be produced, nor how these were to be produced. The image painted is one of strict hierarchy with presumably the CC-CPSU(b) somehow deciding precisely what is to be produced. But given the sheer number of goods (12,000,000 according to Alec Nove, Economics of Feasible Socialism Revisited) and plan positions (48,000 again according to Nove) this is simply not the case.

In a market economy, the decisions of a central planner are replaced by the decisions of millions of firms and households.

This is far closer to the truth of how Soviet planning actually worked, it being a far more dialectical process than what Mankiw thinks. Mankiw is however correct that there was a lack of information.

Finally I find the references to Adam Smith amusing, Smith belonging to the school of classical political economy rather than the neoclassical school to which Mankiw appears to belong, a school that rejects classical political economy.

As for the dismantling of the USSR, given the move toward liberalization and the abandoning of planning, this would suggest the opposite conclusion. Were planning the cause of its problems then the USSR would have been dismantled in the 1920's. Yet it functioned for 70 years, surviving the attempted genocide by the Hitlerites and so on. KetchupSalt (talk) 08:24, 15 June 2023 (UTC)

This is your original research. Firstly, you haven't cited a source showing Mankiw is incorrect. Secondly, you haven't cited a page number for Nove's book; therefore, it is not verifiable. 81.214.107.198 (talk) 12:25, 15 June 2023 (UTC)

This is your original research

It is not. Again, it is what is to be found in the literature.

Secondly, you haven't cited a page number for Nove's book; therefore, it is not verifiable.

You will have to read the book and acquire the learns for yourself. While you are at it I also recommend Socialist Planning by Michael Ellman. KetchupSalt (talk) 06:32, 17 June 2023 (UTC)

Per WP:EXTRAORDINARY, "Any exceptional claim requires multiple high-quality sources." - The source you present could be used to say: Gregory Mankiw says: xxxxx, but to claim IN WIKIVOICE that the planned economy (which through multiple 5 year plans was how USSR industrialized and thereby gained significantly higher standards of living than the feudal system under the Czars) CAUSED lots of previously non-existent poverty and was the PRIMARY cause for the USSR's collapse would need many sources. (To my knowledge, the poverty claim is wrong, and the MAIN reason is overstating the PLANNED economy part; there are other factors, like lack of motivation in communism to produce more than expected, etc. ) ---Avatar317^(talk) 23:58, 16 June 2023 (UTC)

References