Why are planned economies generally so inefficient?
I'm an economic illiterate, but I really don't understand why it's so hard.
>>879954
>I'm economic illiterate and I don't understand why not understanding economics makes for bad economics.
Have you ever played Dwarf Fortress?
Your fort starts small, 7 Dwarfs. You can make whatever they need. Your food stocks will soar (You can make more food and booze than your Dorfs will EVER eat). Everyone can get a tricked out swag pad filled with gold statues. You can mine mine mine until your heart is content. Sure, it takes a long time, because again, you only have seven Dwarves, but with enough time you can get those seven Dwarves whatever they want.
But as time goes on, you get more Dwarves. And they need more food. They need lots of rooms. Suddenly, you don't just have seven Dwarves, you have 200. It takes up a lot of space to make up all of their bedrooms, and you have to micromanage the actual building of these rooms, you have to plan out the turning of them from caves to smoothe tunnels, and then you have to micromanage MORE in order to swag it out with the gold statues. You need a lot of farms to make food and booze, which takes up more land, but also requires you to actually set these things up. You need to keep designating food and booze production, and you need to store the food.
And that's just bedrooms and food. That doesn't count the actual dining rooms. The workshops (Who do you decide what needs to be made? You do. And you have to go to every workshop and say "make x amount of this" by hand, and they won't make shit on their own as a Dwarf is useless unless given orders. And that doesn't even get into the fucking ARMY which is a godawful mess of micromanagement (You have to make all of their equipment, get them all to equip it BY HAND, and then tell them what to do and when, and they will NOT do anything on their own).
You're one man controlling the lives of 200 inbred alcoholics, scale that up to millions of inbred alcoholics.
because the economy is too chaotic to ever be planned
>>879954
Aside from the calculation problem, they also didn't use computer the way multinational corporations do.
>>879954
http://www.ianwelsh.net/the-fall-of-the-ussr/
Sage.
>>880012
The way to do that is, of course, a vast bureaucracy. But people aren't perfect, so not only can the bureaucrats fuck things up unintentionally, but they can also do so out of malice or corruption. The same problem applies with Dear Leader and his Wise Council getting faulty information (again, from bureaucrats, either out of malice, corruption, incompetence, or just bad luck). But then that information, and their orders, have to be relayed back and forth.
Technology helps alleviate this problem, but only mechanically, and doesn't actually fix the core problem that is Dear Leader and his Wise Council not getting enough information.
And at the end of it all, you have to ask, what's the point? Why should Dear Leader and his Wise Council be allowed to decide when a man works, what he makes, how much he makes, when he's allowed to eat, what he's allowed to eat, etc, etc, etc? Not merely from a "What gives Dear Leader the right" notion, but out of "Why are we even doing this? How does it benefit anyone in any way, shape, or form?".
>>880063
Why can't things just be planned on a local level? Couldn't the community just send messages to inform the factory or farm what it is they need?
>>879954
>I'm an economic illiterate
They're not inefficient. They maximise other phenomena than the immediate expanded reproduction of capital.
>>880080
There's nothing to say they can't other than the "Why are we doing it this way" issue. The problem is that no government would ever give local communities that much power.
A lack of adequate information is also a factor, but ultimately irrelevant (Can your hickass town actually coordinate well enough to pull this off? Does anyone understand what the economic impacts of making certain things will do? etc). And, of course, what if I don't live in town? What if I want to grow beets on my farm innawoods instead of yams?
Most attempts at central planning have either been done at the top most level (The USSR, China) or chaotic blood bathes that have no structure anyways so they might as well be "free market(tm)" (Ukraine, Spain). The decentralized every town for itself idea hasn't really been tried.
>>880117
>The decentralized every town for itself idea hasn't really been tried.
HOLY ROMAN EMPIRE
Imagine a small passenger airplane. Something to service flights between cities in a large country like Russia or the United States.
Now imagine every single part, down to the different varieties of nuts and bolts, that goes into manufacturing this airplane. Now imagine a single person, or maybe a committee of no more than six but no less than three, is in charge of deciding the price and number of units produced of every single part of this airplane.
Now take that mental image of an individual or small committee and multiply it by every single item that can conceivably be manufactured, harvested, itemized, or created.
>>880525
And you have an Austrian thought experiment which doesn't reflect any actual situation in any soviet-style society.
Read some economic history before you open your shit gob. Try Strauss' history of the soviet union to 1940 on marxists.org
>>879954
A planned economy is unable to react quickly enough to new developments, and is unable to quickly change to take advantage of new ideas and technologies. They will always be out-competed by more dynamic economies.
>>880117
>The decentralized every town for itself idea hasn't really been tried.
It was, in SK, actually. We put a stop to it, of course.
We being US.
>>880082
Read somewhere they had 20 hour workweeks.
If one has something to do on one's off-time that sounds pretty sweet.
>>879954
>Why are planned economies generally so inefficient
Because you believe to the mass-media.
Planning is a usual thing on any factory, especially now.
>>880697
Man, when I say I think Communism is kind of cool, people tell me I've been brainwashed by Cultural Marxists. Now that I'm saying planned economies are inefficient I've been brainwashed by media.
I can't keep up with this.
>>880601
Of course, instead of production of ten iPutz models with minor differences there would be a few iPutz with greater changes between the models
>>880701
Cultural marxists are a bunch of pussies, who have never read Marx or Lenin
>>880596
You don't need to account for all the variables. Soviet I-O black box tables had 50 commodities calculated by hand.
>>880601
Pure ideology. Don't open your mouth unless you've read economic histories.
>>880602
Sauce?
>>880715
Go home /leftypol/, It's already night. Shill with shitty infographs again tomorrow.
>>880715
>class is the only form of oppression
wew
>>880596
I want the ancaps to leave
>>880723
It's 8:10 AM.
>>879954
The complexity of an economy is enormous, and central planning is limited to the capacities of a small group of individuals. As the first commenter in >>880032 points out.
Militaries today are facing similar problems with planning tasks that with complexity at the limits of human understanding. The DoD CCRP has a few books on the subject in that context.
>>880709
There wouldn't be iPhones at all because that's "unnecessary bourgeoisie decadence", at most you'd get shitty knockoffs plagarized from capitalist countries, but an ideology of mass misery like communism would never independently develop something like that.
>>879954
Mixed economies are most efficient.
You want to have the profit motive so that people are inclined to work and conduct their business in an efficient manner but at the same time you want the government to have the power to break down monopolies and prevent larger companies from crushing everything else.
>>880753
>there would be nothing like that because gommies are evil and because I said so
>>879954
A bureaucracy is incapable of organizing a state full of millions of people, it simply is unable to fairly distribute goods evenly among the populace. The USSR had a major problem with toilet paper, it didn't know how much to produce and ended up not producing enough and not moving it fairly enough.
Capitalism certainly isn't fair, but it's a LOT better at producing goods at a massive amount as long as there is demand for that product. So every grocery ends up being filled with practically too much of an amount of any good, and usually ends up being at a fair and reasonable price.
A planned economy can only function well if the population is tiny and there is no means of corruption to take place, so we're talking about a small town with a population of maybe a few hundred. I guess leftists will say
>Well, what if that's just how it works? The entire nation is segregated into specific communes with a communal leadership which distributes goods locally produced and grown, and trades with other communes!
And I'd concede, this will probably work, but will be still not as efficient as Capitalism. Plus, the national aspect of the state is weaker, thus no real central authority in which to be the final arbiter of judgement. Also, because a lack of a profit motive, there's no real economic innovation.
All in all, it's a Utopian ideal which will never work more efficiently then what we have now.
>>880772
Talk about actually existing socialist consumer electronics
>>880777
They'll never do that. Nor talk about how reliant on East German reciprocal trade agreements Soviet consumer electronics were.
>>880788
>idealism
Your social practice is identical.
>>880777
There were many computers of original construction until someone said in the 1969 "fuck it, we're making a copy of IBM"
>>880774
What about overproduction crisis?
>>880716
but he has to eat
>>880795
Many big mainframes irrelevant to the citizen. The eventual home computers were initially shoddy derivatives of western designs and in most places personal computing remained an arcane hobbyist pursuit driven by DIY magazines. East germany being an exception as >>880787 says.
https://en.wikipedia.org/wiki/History_of_computer_hardware_in_Soviet_Bloc_countries
>>879954
Because effective central planning requires the planner to have more information than the sum of all the knowledge of every economic actor. Which is impossible.
>>880803
Well, you're right, DIY computers based on foreign designs were usual for the 1980s.
But let's not forget that the Union was in the state of decay since 1950s. And that soviet children were very fond of "radio clubs" where they could make themselves a radio or a Spectrum.
>>880816
>But let's not forget that the Union was in the state of decay since 1950s
I'm definitely not forgetting.
>And that soviet children were very fond of "radio clubs" where they could make themselves a radio or a Spectrum.
Kid's radio sets were pretty common in the US too
>>880801
Are you suggesting that he is paid to shitpost on 4chan on an underused board?
>>880803
You mean exactly like the west in the 1970s and 1980s?
>>880813
which is weird because the soviet union didn't collapse until 1989.
>>880826
Yeah, exactly like it but a few years behind.
The West also had more of the precursor information systems
https://en.wikipedia.org/wiki/Videotex
https://en.wikipedia.org/wiki/Teletext
which you'd forgive an ignorant time traveler mistaking for a computer
>>880833
So the argument is that Soviet consumer computing was "a few" years behind? This isn't a greatly suasive argument. The New Zealand consumer computing movement was "more than a few years behind."
>>880839
>So the argument is that Soviet consumer computing was "a few" years behind?
I would guess it was also behind in terms of overall distribution of machines, but until I have numbers I'm not going to just claim shit I can't back up. We expect a high standard of discourse here on /his/ after all :^)
>>880825
no he has to open his mouth to eat
>>879954
The actual answer is that planned economies cannot accurately assign value.
>>879954
In market economies on somewhat free market, when the managements get fucked up, lazy and simply wastes money they get the boot or go bankrupt. Like you know - exec fucks something up completely so he's out(he's still paid mountains of money for screwing up, but I've didn't say that it's all great in market economies, lot's of screw-ups).
In planned economies they've had those people who were enormously competent(my grandpa was one of those) who were moved across the country, from one place in the shitter to the other, pulling it back from bringing loses to giving profit, but nobody was ever punished for causing loses. The bureaucrat who screwed up was still employed before the "repair" guys came, during their stay and afterwards, so they continue to screw up and waste money/resources.
Then you have several situations where the guys WAAAAAY up simply don't understand what are they doing(that weird agricultural experiments in China) and since I think all planned economies are totalitarian countries, nobody wanted to stop the madness.
Totalitarianism and bureaucracy in central-planned economies also fucks up feedback between all levels of management, where local managers/officials intentionally falsify their results to appear better before their superiors(which also happens in market economies but those have self-cleansing mechanisms). It also doesn't remove the barrier between workers and owners, it just gives little bit bigger wage to the workers and much lower to the owners(bureaucrats) which doesn't make the divide between those layers of workforce disappear and doesn't improve the feedback locally(as happened in Spain under anarchists and is a reason of their efficiency).
All of that makes plans very hard to make since the errors in everything are getting enormous and then the prices on the shelves are simply too hard to set properly which causes responding the supply and demand almost impossible.
>>880903
What is "bankruptcy"
It isn't a punishment, it is a write off.
Fuck me.
>>880905
I don't understand your point.
>>880913
Inefficiency losses are equal over varieties of capital.
Governments cannot predict prices of goods and services.
>>880903
>where the guys WAAAAAY up simply don't understand what are they doing(that weird agricultural experiments
There's also this from Russia
https://en.wikipedia.org/wiki/Lysenkoism
>>879954
Because it wasn't real communism
>>879954
Here's an Adam Curtis documentary, which I'm linking to you because I love his documentaries, but it also covers the Soviet's planned economy and why it's not very efficient, along with some of the amusing insanity it achieved.
https://www.youtube.com/watch?v=h3gwyHNo7MI
In the internet age it's slightly easier than what they were working with at the time, but ultimately the problems remain pretty much the same.
Note that this doesn't make socialism impossible, you can always give market socialism or something a go. (Well, you can toy with the idea anyway. Whether you'll convince anyone to actually have a revolution is another thing altogether.)
One: Everything is still "Centrally planned" too some degree, EVERY SINGLE CAPITALIST CORPORATION is centrally controlled by a board of usually 6-12 people. Corporations can have millions of employees and some are actually bigger and make more money than small countries. Central planning IS possible and Corporations themselves are actually proof of that.
Two: Why was the USSR so inefficient.
Nomenklature bred a bureaucracy based entirely on nepotism rather than merit. This meant basically full fucking retards got into power everywhere and fucked shit up in literally every single way possible.
The reason Soviet agriculture was so fucked? Trofim Lysenko. Why in fuck can corporations like Monsanto run millions of acres of farms centrally controlled from their offices (I've been on corporate farms that are 99% automated), because Monsanto actually employees scientists, The USSR employed psycho retards like Lysenko who were so fucking stupid you wonder if they could even tie their shoes, seriously Lysenko is "water the crops with Gatorade!" tier fucking stupid.
In the late 1960s I shit you not, the USSR basically fucked over one of the top economists and computer scientists on earth and actually said "Computers can have no role in central planning" WHAT THE FUCK?!?
I swear too fucking god the USSR actually sabotaged itself on purpose at every fucking opportunity, even things that are common fucking sense, they just went the opposite route too fuck with themselves for some reason.
I honestly believe you could manage an economy today. No, it wouldn't be as varied as Capitalism, but I think computers could make a steady, sustainable economic system if you want an economic system that can provide everyones basic needs and be sustainable.
The fact the supermarkets ID you and track your purchases too sell too insurance companies so they can build a model of your health shows how far computer modelling has come.
>>881397
>EVERY SINGLE CAPITALIST CORPORATION is centrally controlled by a board of usually 6-12 people. Corporations can have millions of employees and some are actually bigger and make more money than small countries. Central planning IS possible and Corporations themselves are actually proof of that.
This isn't exactly true though, because a corporation is always at the mercy of the consumers not buying their shit. While I agree that corporations are controlled hierarchically in some way, there is a difference between a capitalist going bankrupt because he lacks the funds or the innovation to compete in the market, and a state that will allow the continued existence of any company they own, regardless of their efficiency and productive output.
The market will punish a corporation that does not innovate and pours capital into more and more lucrative ventures, which a mechanism the State can ignore, if they want to keep a corporation, or a section of the market running.
An example is the agricultural sector in my country Norway. They are literally the most inefficient sector in Norway, and receive billions upon billions of dollars a year simply because the government has an idealistic view that it is necessary for the country itself to be agriculturally self-sufficient.
This has the negative drawback for the consumer that food is generally pretty expensive, and that the State is using all that money on subsidies when they could use that money on something else that could be vastly more useful, such as healthcare or welfare.
>>879954
Goverments are easily corruptible and generally inefficient.
>>881418
When a corporation or private company goes under due to inefficiency, greed or bad management they go under and people can find other jobs.
The goverment won't go under, what they do is they will tax you more or put your children in debt. Governments can't fail , even when they see something isn't working like Obamacare they will double down on the costs
Three general reasons more or less said in this very thread.
1) Willingness to ignore price mechanism. If an authority says that bread costs 1$ for everyone, but they lack the funds to purchase enough bread in order to distribute it to government stores, it means that instead of price going up to match the added demand, the quantity will go down which leads to empty stores and massive lines to the few places that have something. Also black market trading becomes more lucrative.
2) Information processing issues. This is a problem shared by any group or organization that is overly centralized, basically if too much information processing is on the responsibility of a single entity at some point it'll start ignoring an ever growing portion of information.
3) Lack of meritocracy. Planned economies have been one party dictatorships, meaning that political ties can be a deciding factor over sheer competence.
>>880903
>when the managements get fucked up, lazy and simply wastes money they get the boot or go bankrupt
They get golden parachutes, jump ship and nest elsewhere, while the workers would lose their means of sustenance without government programs to support them through their hours of need.
I'm not going to read this thread because I'm too tired but I just want to throw out a shitpost observation that despite propaganda to the contrary a "planned economy" has probably never existed in the modern world.
Planned economy is a straw man and spook capitalist nations like the U.S. projected onto the USSR. Even vaguely hearing how it works in reality points to it being a lot more complex and less "planned" than almost anyone thinks. Gosplan was more like a national benchmark program.
>>881409
>Agriculture subsidies
>Food expensive as fuck
What.
![cocker_spaniel[1].jpg](https://i.imgur.com/cDerYwQ.jpg "cocker_spaniel[1].jpg")
>>880082
>They're not inefficient
>>880574
>marxists.org
>>881713
>They're not inefficient
To be fair in cases where the necessary things are clearly defined, they can be more efficient than a market economy.
(i.e. if it's a total war scenario and you need MORE TANKS much more urgently than you need a proper number of toothbrushes, and you can just ration toothbrushes anyway. It's significantly easier to have a planned economy and just set the tank-production target higher than it is to get the free-market system to respond appropriately.)
Though 'efficiency' is a very variable term (in terms of deadweight loss or whatever, sure, it's still less efficient in the total war scenario, but this is war and the only deadweight worth considering is the guy whining about deadweight loss instead of doing his bit for victory!)
>>881600
>Even vaguely hearing how it works in reality points to it being a lot more complex and less "planned" than almost anyone thinks. Gosplan was more like a national benchmark program.
I've read about this a lot actually but I don't have a complete understanding of how it actually worked. Is it possible to combine elements of central planning and restricted markets? That seems to be what the USSR had.
>>880012
>>881397
> EVERY SINGLE CAPITALIST CORPORATION is centrally controlled
Except they're not, though, in terms of actually determining how much product to make and how to distribute it they rely on a ton of 'free' information (free as in costs the planners little work, not as in nobody pays for it) that they get from the consumers.
They are also, crucially, much smaller than a system like Gosplan. Complexity scales superlinearly with size.
>>880063
>>880117
'Decentralized planning' sounds interesting, but how would one even go about pulling that off?
Correct me if I'm mistaken, but isn't managing the economy in a centrally planned system synonymous with managing goods and services; how would you concretely manage those at an individual level?
Central planning seems easy to me.
Fill up supermarkets with products, get notices about how fast shelves are emptied, adjust production accordingly.
>>883326
What stops the potato farmers from sending some guys to take potatoes and have more resources funneled to the potato farmers?
>>883264
Decentralized planning is impossible without reverting to agrarian communes. You're not going to see any region today being totally self-sufficient. If a modern society wants to undertake production for use economy-wide planning is a necessity.
>>883326
One of the typical criticisms
>The reason is that the existing capital structure and acquired skills and locations of the labor force are initially maladjusted to the newly prevailing equilibrium configuration of the data. The planners therefore would be forced to decide how to allocate the flow of productive services among the myriads of potential technical production processes and labor retraining and relocation projects so as to secure the optimal path of adjustment to equilibrium for the existing stocks of capital goods, labor skills, and housing. The bewildering complexity of this allocation decision rests on the fact that the planners will be confronted with altered conditions at every moment of time during this disequilibrium transition process, since the quantities and qualities of the available productive services themselves are in constant flux due to the circumstance that they originate in the very stocks of physical assets and labor skills that are being progressively transformed.
A market solves this problem through it's price system which coordinates the efforts of all actors in an economy. In this sense markets are more remarkable than Marxists initially realized, but it's certainly not the deity that turbo-liberals have made it out to be either. I've never accepted that economic accounting is simply unthinkable without a capital market. The USSR had huge restrictions on it's markets yet lasted with high growth rates. If state interference really hurt an economy as much as the ECP claimed then the USSR wouldn't have been able to exist at all. Thus proving that socialism is 'impossible.' But that isn't the case and I don't see how any sane person in the 21st century can think otherwise.
I'll tell you have it failed instead of listening to these theoretical wankers whos bullshiting amounts to nothing in real life.
Because people are shit. Numbers were misreported to appease superiors and avoid responsibility. Or production was rushed to make up the numbers. Corruption flourished, literally everyone did small crimes, small thefts, recouping a little. Doing it to have a little better living that month. It was called doing smart. As it was said, since everything was in public hands why cant I take some more from it, the harmed party was just this abstract entity. Other workers did it to, the manager did it too plus it wasnt his company, so why would he care what his workers do? Just match figures, over under report things. State will subsidy it anyway, an theres no competition to fear from.
Kolhozes didn't care too much either, they got their machines way way under market price from the state, did their farm work, produced goods as they could, extra got exported, again since the whole cooperative, machines and the lands weren't in their lands there was always this aura of nonchalant, if something broke down well fug they werent in rush to fix stuff, or state will just send another. Taking away tools and some parts home? Its okay, they got breaken during use, request new ones.
This whole shit worked as long it as kept alive by cheap Soviet resources and barter between the comecon.
Thats how it went and why the whole system came cracking down. Because everyone was doing it smart.
regards actual eastern european
>>883353
The potato police.
>>880839
These commie home computers were barely spread though beyond computer clubs. Were basically nonexistent as far as larger populace goes.
>>881604
Other nations can't compete with Norwegian produce after eventhing has been calculated.
Developing nation food is very cheap however subsidies render that advantage moot.
>>881409
Subsidies push down prices. You have no idea how just how cheap food today is in historical perspective.
>>880774
>At a fair and reasonable price
What was the last time you went shopping mate?
>>879954
Read, if you actually want to understand : "Economic Calculation in the socialist commonwealth" by von mises. it's a piece that sparked the so called "socialist calculation debate" in economics.
>>879954
> Why are planned economies generally so inefficient?
> planned economies
> inefficient
The fuck are you talking about?
>>880715
The irony of this pic is that "worker" or "working class" is also identity politics. Marxists continue to call the unemployed "workers" regardless.
>>879954
Because, compared to a mode of production that COMPELS its participants to maximize labor productivity through the operation of the "invisible hand" of market forces, all other modes of production are necessarily inefficient.
>>881409
Idealistic view that it is necessary for the country to be agriculturally self sufficient
If your country isn't agriculturally self sufficient then you're pretty much a non-country
South Korea can't agree with that statement. Economic planning is the best way to develop an economy, but I'm not talking about commie economics but dirigism and the big push.
>>886588
Difference between standard subsidies and subsidizing farmers engaging in shitty business choices.
