Planned economy

A planned economy is a directed economy, generally on a scale State, by means of a plan laying down the production targets over one annual or multiannual period. In other words, it indicates a mode of organization based on the Collective ownership or official of the companies which are seen imposing production targets by a centralized plan. It can be democratic or not, according to the various countries which applied it. It characterizes the countries known as of the “real Socialisme” (by official propaganda) until the beginning of the Années 1990.

According to Włodzimierz Daughters-in-law

The economic Planification centralized is regarded as a privileged instrument of the socialist economies. This system is based on a decision-making power held by the center which chooses the main macroeconomic trends . Such an organization can appear effective, but induced difficulties in operation. It is one of the aspects which Włodzimierz Brus in its works approaches. The starting point of its reflection is consisted the observation of the real difficulties encountered by a certain practice of the planning centralized in the socialist countries the last century. Among the difficulties one notes that the more one nation's economy diversifies, the more the number of the products that one manufactures there increases, the more the technical lawsuits implemented multiply, the more, also, a given form of Centralisation risk to become ineffective because the center can be submerged by the number and the complexity of the problems to be solved and by the multitude of knowledge and information it is necessary to have to solve them correctly.

This poses the problem of a certain form of Décentralisation and, also, that of the various forms of connections between production units. In addition one can say that, if the centralization of the decisions is carried out under bad conditions (Bureaucratie), there exists a considerable risk to see multiplying nonfounded decisions, unrealistic or completely inadequate. This can, in addition to slowing down the development of the productive forces, to lead to a situation or the decisions taken centrally become formal. Thus in this case real control being carried out then on another level that which one proclaims the authority what can involve consequences increasingly difficult to control.

To pose an economic justification with the recourse to a planned economy, Brus explains that “the superiority of the socialist system on the Capitalisme results in the possibility of using the capacities to produce fully, socialism is not only one system righter but also more rational from an economic standpoint. ”, it underlines to illustrate that the profits for the labor related to the suppression of the structural unemployment, the rise in its purchasing power due to a power struggle favorable to the consumer or the feeling to belong to a more levelling system.

Nevertheless it does not elude the negative consequences of planning. Indeed it puts forward the defects of the system among which it sees in the not-stimulation of the worker who sees himself ensuring Salaire and Emploi an important limit. In a more general way one particularly complex unit is related on the one hand on the question of the centralized economic direction and, on the other hand, to the conditions requiring a maximum development of the initiative of all the economic links and an active participation of the masses with management. The active, creative emulation of the masses in the economic activity supposes a margin of autonomy of the economic links, gold, centralization in the USSR means something of diametrically opposite i.e. the concentration of the decision-making power.

Bureaucratized or democratic economy

A polemic has course as for the degree of democracy within the planned economy with the general direction of the term.
  • the planned economy can be bureaucratized as it was the case in Soviet Union and in the other countries asserting ideelogy of Stalin . I.e. only the leaders of the Party planned the economy of the country.
  • A contrario, the planned economy can be democratic as asserted it Trotsky , opposing to the Stalinist mode. I.e. the population plans itself its economy by the means of councils representatives the whole of the populations and either a bureaucratic elite. In 1933, it analyzes the Soviet economy as follows:
    The Soviet economy today is neither a cash economy nor a planned economy. It is an economy almost purely bureaucratic. Exaggerated and disproportionate industrialization mined the foundations of the agricultural economics. The farming community sought to find safety in collectivization. Very quickly the experiment showed that the collectivization of despair is not yet a socialist collectivization. The decline of the agricultural economics which followed carried an hard blow to industry. To support dubious and disproportionate rates/rhythms, it became pressing to intensify even more the pressure on the proletariat. Released from the material control of the producer, industry took an aspect supersocial, i.e. bureaucratic. It is resulted from it that it lost the capacity to satisfy the human needs even with the degree where it had done it with a less developed capitalist industry|Leon Trotsky, Degeneration of the theory and theory of the degeneration (Problems of the Soviet mode) appeared in the “Bulletin of the Opposition” - in Russian - n°34, May 1933, then in the Truth

Internal bonds

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