Plan-driven economic system
Chapter 2 - Society
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Welcome to the Plan-driven economic system page
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Comming soon
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Core ideas
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The assumptions of the plan economic model
Macro-economics
- Central planning allows the government to marshal society's resources for goals that might not be achieved by market forces alone
- The planning authority has more resources than any single company or business, government projects can also benefit from economies of scale that make government projects more productive in the long run
Meso-economics
- Meso-economics is obsolete because it is swallowed by the Macro-economic instances
Micro-economics
- A competitive offer leads to choice stress, which is resolved when the government determines which products and services are available.
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Deep dive
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A state driven economy
A planned economy is an economic system in which the state controls and directs all economic activity. It is characterised by long-term plans and politically motivated aims, leading to standardisation and mass production. An alternative term is a 'command economy', in which the allocation of resources and investments is decided by the hierarchically organised decision-making system, with the main power held by the central administration.
State Socialism is a societal system characterised by the common ownership of the means of production and the administrative allocation of resources. Because of the totalitarian nature of communist regimes, the term 'socialism' is sometimes replaced by the terms state socialism or communism.
It makes almost all productive enterprises subordinate to administrative organs. To a large extent, this neglects the economic independence of the enterprises and thereby leads to the neglect of their material interests and responsibilities, blunting levels of initiative and enthusiasm. Secondly, the system involves excessive command planning from above and is overly rigid. So long as the enterprises meet their stipulated targets, they are considered to have performed satisfactorily – regardless of whether or not their products satisfy society's needs.
Throughout the twentieth century, economic planning has been an important response to capitalism's perceived moral failings and practical defects in Europe and North America. Before the 1980s, the governments of the former USSR and its Eastern European satellites attempted economic planning on a grand scale, seeking to control all means of production (as well as consumption patterns) directly through centralised decision-making.
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At the originː historical materialism
It is a dialectic theory resulting in a politics of socialism, meaning collective social control over the economy. Karl Marx (1818- 1883) and Friedrich Engels (1820 - 1895) believed in social progress and the perfectability of the world. They saw science as a transformative power and used the term accumulation of capital to designate the economy's growth. As capital is privately owned, it also means private control over society's direction.
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In contrast toː Hegelian idealism
Idealism is the belief that ideas are the leading cause of life's events. Hegel (1770 - 1831) postulated a kind of rationality in the world. This 'world spirit' uses humans and common practices to work out the contradictions we experience. The best combination of thesis and antithesis results in a synthesis by human rationality, creating an ever new version of the 'world spirit'.
Marx and Engels opposed this 'world spirit' by the real praxis of actual women and men in society, turning spiritual belief back on its material base.
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