The USSR, for example, failed dramatically at trying to have a strictly command-based economy.
So did East Germany.
Comment on Why does China have so many multi billionaires if they are aiming to be a communist country?
skidicarus@sh.itjust.works 3 days agoNot only does it make sense from a global perspective, but it also makes sense economically. China would still be in the gutter if they didn’t have market engagement. The USSR, for example, failed dramatically at trying to have a strictly command-based economy.
Hueristic_Autistic@lemmy.world 3 days ago
UnderpantsWeevil@lemmy.world 3 days ago
Did it fail because of the command-economy? I seem to recall the worst days of the USSR following implementation of perestroika. And then the Shock Doctrine that followed Yeltsin’s tank-ride into parliament (literally) was even worse.
The amount of complaining under the command-economy was arguably much worse. But that stemmed more from the receptiveness of the government to complaints than under the modern system, where they just arrest you and shove you into a trench in Ukraine.
skidicarus@sh.itjust.works 3 days ago
I believe so, yes. Other to a the well-documented issues that arose from the information problem, Vivek Chibber has done some recent work on the incentive problems that also plague Soviet-style command economies. …substack.com/…/why-soviet-style-planning-fails
UnderpantsWeevil@lemmy.world 3 days ago
He comes at it empirically - “We ought to be skeptical, as any rational person ought to be, because when you see something failing over and over and over again” - and extends causality from there. And he goes running back to price signals as the proximate cause of the failure, because he conflates market signals with efficient consumption patterns.
Which is all true, but not unique to communist economic planners. We have a bevy of capitalist planners that live all through the corporate world, fixated on directing the flow of investment. And once an industry becomes vertically integrated, it also can’t rely on market signals, because all the company is dealing with is raw material inputs and final product outputs.
What private industry in capitalist states have achieved that communists arguably lacked was the proverbial “Manufactured Consent” of the end consumer. You take a thing that’s incredibly cheap to produce and engineer at scale - plastic or particle board or ink/paper or data - and you upsell it through marketing. So you end up with a $600B/year budget in the United States that’s dedicated just to telling people that they need to buy stuff.
And that doesn’t include the budget for industry lobbying or legal wrangling. It doesn’t include the kind of bribery and kickbacks that avoid popular resistance to industry. Or the negative externalities of waste management that are displaced onto end consumers.
That’s straight foward not true. You make a profit by selling at the highest price possible with the lowest quality of good that you can. You aim for higher margins per unit sold. And then you aim to maximize volume. McDonalds would not exist in its current state if it was in the business of undercutting people making sandwiches at home with superior products.
Everything he’s writing about is just the restatement of the old economic calculation problem posited by Ludwig von Mises in 1920. And it’s been pretty thoroughly debunked with the advent of modern computer technology. But even before the invention of the microprocessor, it was on shaking footing in countries like Allende’s Chile and Deng’s China.
In fact, the reactionary response to central planning as an institution wasn’t to outcompete it but to demolish the methods by which it was achieved. Most famously, when Pinochet’s troops stormed the Presidential offices and shot the computers.
Not only is central planning possible, but it is proven successful, as often within capitalism as within the socialist sphere.