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This article refers to an economy controlled by the state. For the proposed economic system that employs "participatory planning", see participatory economics. Participatory economics, often abbreviated parecon, is a proposed Economic system that uses participatory decision making as an economic mechanism

A planned economy or directed economy is an economic system in which the state or government manages the economy. An economic system is a System that involves the production, distribution and consumption of goods and services between A state is a political association with effective Sovereignty over a geographic Area and representing a Population. For the government of parliamentary systems see Executive (government. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area [1] Its most extensive form is referred to as a command economy,[2] centrally planned economy, or command and control economy[3]. In such economies, the state or government controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income, much like a communist state. A state is a political association with effective Sovereignty over a geographic Area and representing a Population. For the government of parliamentary systems see Executive (government. [4] The planners decide what should be produced and direct enterprises to produce those goods. [5] Planned economies are in contrast to unplanned economies, such as a market economy, where production, distribution, pricing, and investment decisions are made by the private owners of the factors of production based upon their own and their customers' interests rather than upon furthering some overarching macroeconomic plan. A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Less extensive forms of planned economies include those that use indicative planning, in which the state employs "influence, subsidies, grants, and taxes, but does not compel. Indicative planning is a form of economic planning implemented by a State in an effort to solve the problem of Imperfect information in economies "[6] This latter is sometimes referred to as a "planned market economy. "[7]

A planned economy may consist of state-owned enterprises, private enterprises directed by the state, or a combination of both. Though "planned economy" and "command economy" are often used as synonyms, some make the distinction that under a command economy, the means of production are publicly owned. That is, a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc. "[8] but a command economy, while also having this type of regulation, necessarily has substantial public ownership of industry. [9] Therefore, command economies are planned economies, but not necessarily the reverse (example: USA economy during World War II or Nazi Germany's private ownership yet use of the Four Year Plan could construe them as a planned economy in the wide sense, but not necessarily a command economy, while the Soviet Union with public ownership would be a command economy). The United States of America —commonly referred to as the World War II, or the Second World War, (often abbreviated WWII) was a global military conflict which involved a majority of the world's nations, including Nazi Germany and the Third Reich are the common English names for Germany under the regime of Adolf Hitler and the National Socialist German Workers For a high school academic guidance plan see 4-year plan. The Four Year Plan was a series of Economic reforms created by the Nazi The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991

Important planned economies that existed in the past include the economy of the Soviet Union, which was for a time the world's second-largest economy, China during its Great Leap Forward, and India, prior to its economic reforms in 1991 . The economy of the Soviet Union was based on a system of State ownership, administrative planning Socialist competition and free labour China ( Wade-Giles ( Mandarin) Chung¹kuo² is a cultural region, an ancient Civilization, and depending on perspective a National The Great Leap Forward ( of the People's Republic of China (PRC was an economic and social plan used from 1958 to 1960 which aimed to use China 's vast population India, officially the Republic of India (भारत गणराज्य inc-Latn Bhārat Gaṇarājya; see also other Indian languages) is a country Year 1991 ( MCMXCI) was a Common year starting on Tuesday (link will display full calendar of the Gregorian Calendar. Beginning in the 1980s and 1990s, many governments presiding over planned economies began deregulating (or as in the Soviet Union, the system collapsed) and moving toward market-based economies by allowing the private sector to make the pricing, production, and distribution decisions. Although most economies today are market economies or mixed economies (which are partially planned), planned economies exist in some countries such as Cuba, North Korea, and Burma. A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a A mixed economy is an Economic system that incorporates aspects of more than one economic system The Republic of Cuba (ˈkjuːbə or) consists of the island of Cuba (the largest and second-most populous island of the Greater Antilles) Isla de la North Korea is the commonly used short form name for the Democratic People's Republic of Korea (or DPRK) a State located in East Asia, Burma, officially the Union of Myanmar ( pjìdàunzṵ mjàmmà nàinŋàndɔ̀ is the largest country by geographical area in mainland Southeast Asia. [10]

Contents

Advantages of economic planning

Socialism  v • d • e 
Currents
Religious socialism
Key Issues
People and organizations
Related subjects

Supporters of planned economies cast them as a practical measure to ensure the production of necessary goods—one which does not rely on the vagaries of free markets. Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the Means of production and distribution African socialism is a belief in sharing economic resources in a "traditional" African way as distinct from classical Socialism. Arab Socialism (الاشتراكية العربية al-ishtirākīya al-‘arabīya) is a political ideology based on an amalgamation of Pan-Arabism and Communism is a Socioeconomic structure that promotes the establishment of an egalitarian, classless, stateless Society based De Leonism, occasionally known as Marxism-Deleonism, is a form of Marxism developed by Daniel De Leon. Democratic socialism is a description used by various socialist movements tendencies and organizations to emphasize the democratic character of their political orientation Eco-socialism, Green socialism or Socialist ecology is an Ideology merging aspects of Marxism, Socialism, Green politics Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related Guilds. Libertarian socialism is a group of political philosophies that aim to create a society without political economic or social hierarchies – a society in which all violent Market socialism is a term used to denote two different Economic system (s based in Socialism which operate according to Market principles The term revolutionary socialism refers to Socialist tendencies that advocate the need for fundamental social change through Revolution, as a strategy to achieve a Social anarchism, socialist anarchism, anarcho-socialism, anarchist socialism or Communitarian anarchism,(sometimes used interchangeably with Social democracy is a Political ideology of the left and centre-left A socialist market economy is an economic form that is practiced in the People's Republic of China, where it is called Socialism with Chinese characteristics Utopian socialism is a term used to define the first currents of modern socialist thought Religious socialism is a Term used to describe forms of Socialism that are based on Religious values. Buddhist socialism is a Political ideology which advocates Socialism based on the principles of Buddhism. Christian socialism generally refers to those on the Christian left whose politics are both Christian and Socialist and who see these two philosophies as Islamic socialism is a term coined by various Muslim leaders to meet the demand for a more spiritual form of Socialism. Criticisms of Socialism range from disagreements over the efficiency of socialist economic and political models to condemnation of states described by themselves The history of socialism, sometimes termed 'modern socialism' finds its origins in the French Revolution of 1789 and the changes brought about by the Industrial Revolution Socialist economics is a broad and sometimes controversial term The term socialist state (or socialist republic, or workers' state) can carry one of several different (but related meanings In strictly speaking any Since the 18th century Socialist ideas have developed and separated into many different types of socialism. The following is a list of self-identified Socialists divided by geographical location The International Workingmen's Association (IWA, sometimes called the First International, was an international socialist organization which aimed at uniting a variety The Second International (1889-1916 was an organization of socialist and labour parties formed in Paris on July 14, 1889. The Comintern ( Com munist Intern ational also known as the Third International) was an international Communist organisation founded in Moscow The Fourth International ( FI) is a communist international organisation working in opposition to both Capitalism and Stalinism. Socialist International is a worldwide organization of socialist ( social democratic and labour) political parties The World Federation of Democratic Youth (WFDY is a left-wing youth organization recognized by the United Nations as an international youth Non-governmental organization The International Union of Socialist Youth (IUSY encompasses socialist, Social democratic and Labour Party youth organizations from more than 100 states Anarchism is a Political philosophy encompassing theories and attitudes which support the elimination of all compulsory Government, i Worker self-management (or autogestion) is a form of workplace decision-making in which the workers themselves agree on choices (for issues like customer care general production Class struggle is the active expression of Class conflict looked at from any kind of socialist perspective Democracy is a form of government in which the supreme power is held completely by the people under a free electoral system The " dictatorship of the proletariat " or workers' state is a term employed by Marxists that refers to what they see as a temporary state between the Egalitarianism (derived from the French word égal, meaning equal) is a political doctrine that holds that all people should be treated as equals and have Equality of outcome or equality of condition is a form of Egalitarianism which seeks to reduce or eliminate differences in material condition between individuals or Impossibilism is an interpretation of Marxism. It emphasizes the limited value of reforms in overturning capitalism and insists on revolutionary political action as the only For the Marxist concept of internationalism see Proletarian internationalism. Marxism is the political philosophy and practice derived from the work of Karl Marx and Friedrich Engels. A proletarian revolution is a social and/or political Revolution in which the Working class attempts to overthrow the Bourgeoisie. Socialism in One Country was a thesis developed by Nikolai Bukharin in 1925 and adopted as state policy by Joseph Stalin. A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages hours and working conditions forming Utilitarianism is the idea that the moral worth of an action is solely determined by its contribution to overall Utility, that is its contribution to happiness A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers

Stability

A planned economy can ensure the continuous utilization of all available resources. If isolated and unresponsive to consumer demand, a planned economy does not suffer from a business cycle. The term business cycle or economic cycle refers to the fluctuations of economic activity during its long term growth trend Under an ideally administered planned economy, neither unemployment nor idle production facilities should exist beyond minimal levels, and the economy should develop in a stable manner, unimpeded by inflation or recession.

Long-term infrastructure investment can be made without fear of a market downturn (or loss of confidence) leading to abandonment of the project. This is especially where returns are risky (e. g. fusion reactor technology) or where the return is diffuse (e. Fusion power is power generated by Nuclear fusion reactions In this kind of reaction two light atomic nuclei fuse g. immunization programs or public education). Immunization, or immunisation, is the process by which an individual's Immune system becomes fortified against an agent (known as the Public education is education mandated for or offered to the children of the general public by the Government, whether national regional or local provided by an institution

Conformance to a grand design

While a market economy maximizes wealth by evolution, a planned economy favors design. While evolution tends to lead to a local maximum in aggregate wealth, design is in theory capable of achieving a global maximum. Local optimum is a term in Applied mathematics and Computer science. In Mathematics, a global optimum is a selection from a given domain which yields either the highest value or lowest value (depending on the objective when a specific For example, a planned city can be designed for efficient transport, while organically grown cities tend to suffer from traffic congestion. A new town, planned community or planned city is a City, Town, or Community that was carefully planned from its inception and is typically Critics would point out that planned cities will suffer from the same problems as unplanned cities, unless reproduction and population growth is subject to strict control, as in a closed city. A closed city or closed town is a settlement in the former Soviet Union with travel and residency restrictions

Meeting collective objectives by individual sacrifice

A planned economy serves collective rather than individual needs: under such a system, rewards, whether wages or perquisites, are to be distributed according to the value that the state ascribes to the service performed. A collective is a group of people who share or are motivated by at least one common issue or interest or work together on a specific project(s to achieve a common objective As commonly used, individual refers to a Person or to any specific object in a collection A planned economy eliminates the individual profit motives as the driving force of production and places it in the hands of the state planners to determine what is the appropriate production of different sets of goods.

The government can harness land, labor, and capital to serve the economic objectives of the state. Consumer demand can be restrained in favor of greater capital investment for economic development in a desired pattern. The state can begin building a heavy industry at once in an underdeveloped economy without waiting years for capital to accumulate through the expansion of light industry, and without reliance on external financing. This is what happened in the Soviet Union during the 1930s when the government forced the share of GNP dedicated to private consumption from 80 percent to 50 percent. [11] While there was a significant decline in individual living standards, the state was able to meet some of its "economic objectives. "

Comparison with capitalist corporations

Taken as a whole, a centrally planned economy would attempt to substitute a number of firms with a single firm for an entire economy. As such, the stability of a planned economy has implications with the Theory of the firm. The theory of the firm consists of a number of economic theories which describe the nature of the firm company, or Corporation, including its existence After all, most corporations are essentially 'centrally planned economies', aside from some token intra-corporate pricing (not to mention that the politics in some corporations resemble that of the Soviet Politburo). Politburo, short for Political Bureau, Russian Politicheskoye Buro, is the executive organization for a number of Political parties, most notably That is, corporations are essentially miniature centrally planned economies and seem to do just fine in a free market. As pointed out by Kenneth Arrow and others, the existence of firms in free markets shows that there is a need for firms in free markets; opponents of planned economies would simply argue that there is no need for a sole firm for the entire economy. Kenneth Joseph Arrow (born August 23, 1921) is an American Economist and joint winner of the Nobel Memorial Prize in Economics

Disadvantages of economic planning

Inefficient resource distribution — surplus and shortage

Critics of planned economies argue that planners cannot detect consumer preferences, shortages, and surpluses with sufficient accuracy and therefore cannot efficiently co-ordinate production (in a market economy, a free price system is intended to serve this purpose). A free price system or free price mechanism (informally called the price system or the price mechanism) is an economic system where prices are set by the For example, during certain periods in the history of the Soviet Union, shortages were so common that one could wait hours in a queue to buy basic consumer products such as shoes or bread. The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991 [12] These shortages were due in part to the central planners deciding, for example, that making tractors was more important than making shoes at that time, or because the commands were not given to supply the shoe factory with the right amount of leather, or because the central planners had not given the shoe factories the incentive to produce the required quantity of shoes of the required quality. This difficulty was first noted by economist Ludwig von Mises, who called it the "economic calculation problem". Ludwig Heinrich Edler von Mises (ˈluːtvɪç fɔn ˈmiːzəs ( September 29, 1881 – October 10, 1973) was an Austrian The economic calculation problem is a criticism of Socialist economics. Economist János Kornai developed this into a shortage economy theory (advocates could claim that shortages were not primarily caused by lack of supply). János Kornai, (21 January 1928- born in Budapest, Hungary, is an Economist noted for his criticism of the command economies of Eastern Shortage economy (Polish gospodarka niedoboru, Hungarian hiánygazdaság) is a term coined by the Hungarian Economist, János Kornai

There is also the problem of surpluses. Surpluses indicate a waste of labor and materials that could have been applied to more pressing needs of society. Critics of central planning say that a market economy prevents long-term surpluses because the operation of supply and demand causes the price to sink when supply begins exceeding demand, indicating to producers to stop production or face losses. This frees resources to be applied to satisfy short-term shortages of other commodities, as determined by their rising prices as demand begins exceeding supply. It is argued that this "invisible hand" prevents long-term shortages and surpluses and allows maximum efficiency in satisfying the wants of consumers. The invisible hand is a Metaphor coined by the Economist Adam Smith. Critics argue that since in a planned economy prices are not allowed to float freely, there is no accurate mechanism to determine what is being produced in unnecessarily large amounts and what is being produced in insufficient amounts. They argue that efficiency is best achieved through a market economy where individual producers each make their own production decisions based on their own profit motive.

Cannot determine and prioritize social goods better than the market can

Some who oppose comprehensive planned economies argue that some central planning is justified. In particular, it is possible to create unprofitable but socially useful goods within the context of a market economy. For example, one could produce a new drug by having the government collect taxes and then spend the money for the social good. On the other hand, opponents of such central planning say that "absent the data about priorities conveyed through price signals created by freely acting individuals, [it is questionable] whether determinations about what is socially important can even be made at all. "[13] Opponents do not dispute that something useful can be produced if money is expropriated from private businesses and individuals, but their complaint is that "it’s far from certain that those monies could not have been spent better"[13] if individuals were allowed to spend and invest as they wished according to their own wants.

We can see things of value being produced by the state taxing and using those funds to undertake projects which are believed to be social goods, but we cannot see what social goods have not been produced due to wealth taken out of the hands of those who would have invested and spent their money in other ways according to their own goals. These opponents of central planning argue that the only way to determine what society actually wants is by allowing private enterprise to use their resources in competing to meet the needs of consumers, rather those taking resources away and allowing government to direct investment without responding to market signals. According to Tibor R. Machan, "Without a market in which allocations can be made in obedience to the law of supply and demand, it is difficult or impossible to funnel resources with respect to actual human preferences and goals. "[13]

If the government in question is democratic, democratically-determined social priorities may be considered legitimate social objectives in which the government is jusitified in intervening in the economy. It must be noted that to date, most if not all countries employing command economies have been dictatorships or oligarchies -- few or none were democracies. A dictatorship is usually defined as an autocratic Form of government in which the Government is ruled by a Dictator. Oligarchy' ( Greek, Oligarkhía) is a Form of government where Political power effectively rests with a small elite segment Democracy is a form of government in which the supreme power is held completely by the people under a free electoral system Many democratic nations, however, have a mixed economy, where the government intervenes to a certain extent and in certain aspects of the economy, although other aspects of the economy are left to the free market. A mixed economy is an Economic system that incorporates aspects of more than one economic system

Lack of incentive for innovation

Another criticism some make of central planning is that it is less likely to promote innovation than a free market economy. In the latter, inventors can reap huge benefits by patenting new technology, so there is arguably much more incentive to innovate. Conversely a planned economy can deliver vast national resources into research and development if it gets the idea that a particular field is critical to its interests, usually military technology. The Soviet Union's ability to maintain fierce competition versus the United States during the space race and Cold War, despite its smaller economy, is an example of this. The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991 The United States of America —commonly referred to as the The Space Race was a competition of space exploration between the Soviet Union and the United States, which lasted roughly from 1957 to 1975 Cold War is the state of conflict tension and competition that existed between the United States and the Soviet Union (USSR and their respective allies from the

Infringement on individual freedoms

The top down structure of a centrally planned economy dictates a hegemonic operating culture - whereas in a free market economy several models of operating can compete simultaneously in a manner similar to organisms in an ecosystem.

Critics also hold that certain types of command economies may require a state which intervenes highly in people's personal lives. For example, if the state directs all employment then one's career options may be more limited. If goods are allocated by the state rather than by a market economy, citizens cannot, for example, move to another location without state permission because they would not be able to acquire food or housing in the new location, as the necessary resources were not preplanned.

Likewise, because of the state's controls over an individual's personal choices, critics contend that central planning intrinsically results in a top-down, dictatorial state where politicians and bureaucrats use the state to achieve their own ends, which are in turn described as the "social" objectives of the state. In essence, critics contend that socialism has nothing to do with the preferences of the individuals that comprise a society, but rather the abstract goals of some group.

This criticism is supported by Rummel's Law which states that the less freedom a people have, the more likely their rulers are to murder them. Rummel's Law states that the less freedom a people have the more likely their rulers are to murder them R. J. Rummel's top three examples of 20th century "Megamurders" were Soviet Russia, People's Republic of China and Nazi Germany, all planned economies with limited individual freedom. Rudolph Joseph Rummel (born October 21, 1932) is Professor emeritus of Political science at the University of Hawaii. Talk People's Republic of China) PEOPLE'S REPUBLIC OF CHINA ARTICLE GUIDELINES Nazi Germany and the Third Reich are the common English names for Germany under the regime of Adolf Hitler and the National Socialist German Workers [14]

The Road to Serfdom is a book written by Friedrich Hayek and critical of collectivism, presenting the argument that a central planned economy must ultimately result in tyranny. The Road to Serfdom is a book written by Friedrich Hayek (recipient of the Nobel Memorial Prize in Economic Sciences in 1974 which has significantly Friedrich August von Hayek CH ( May 8, 1899 March 23, 1992) was an Austrian British Economist Collectivism is a term used to describe any moral political or social outlook that stresses human Interdependence and the importance of a Collective, rather than An idea similar to this is the idea of the iron cage presented even earlier by Max Weber in The Protestant Ethic and the Spirit of Capitalism. Iron cage is a sociological concept introduced by Max Weber. Iron cage refers to the increasing rationalization of human life which traps individuals in Maximilian Carl Emil Weber (maks 'veːbɐ (21 April 1864 &ndash 14 June 1920 was a German political economist and sociologist who was considered The Protestant Ethic and the Spirit of Capitalism is a Book written by Max Weber, a German Economist and Sociologist in

Suppression of Economic Democracy and Self-Management

Centrally planning is also criticized by elements of the radical left. Libertarian socialist economist Robin Hahnel notes that even if central planning overcame its inherent inhibitions of incentives and innovation it would nevertheless be unable to maximize economic democracy and self-management, which he believes are concepts that are more intellectually coherent, consistent and just than mainstream notions of economic freedom. Robin Hahnel is a Professor of Economics at American University. As Hahnel explains, “Combined with a more democratic political system, and redone to closer approximate a best case version, centrally planned economies no doubt would have performed better. But they could never have delivered economic self-management, they would always have been slow to innovate as apathy and frustration took their inevitable toll, and they would always have been susceptible to growing inequities and inefficiencies as the effects of differential economic power grew. Under central planning neither planners, managers, nor workers had incentives to promote the social economic interest. Nor did impending markets for final goods to the planning system enfranchise consumers in meaningful ways. But central planning would have been incompatible with economic democracy even if it had overcome its information and incentive liabilities. And the truth is that it survived as long as it did only because it was propped up by unprecedented totalitarian political power. ” [15]

Corruption

A planned economy creates social conditions favoring political corruption. Political corruption is the use of governmental powers by government officials for illegitimate private gain Particularly, command economies have been notoriously corrupt. First, centralized decision-making predisposes planners to abuses of power. Second, the inherent inefficiency of plans drawn with insufficient information creates a need for bypassing or subverting the official decision-making process. For example, the Soviet Gosplan could not create plans that were feasible, and other means were used to meet the quotas. A gift economy featuring corruption, blat, developed. A gift economy is a Social theory in which goods and services are given without any explicit agreement for immediate or future Quid pro quo. Blat (блат blat) is a term which appeared in the Soviet Union to denote the use of informal agreements prestation exchangements of services connections The Chinese guanxi is somewhat similar. Guānxi describes the basic dynamic in the complex nature of personalized networks of influence and social relationships and is a central concept in Chinese

Planned economies and socialism

Main article: Socialist economics

In the 20th century, most planned economies were implemented by states that called themselves socialist. Socialist economics is a broad and sometimes controversial term Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the Means of production and distribution Also, the greatest support for planned economics comes from socialist authors. For these reasons, the notion of a planned economy is often directly associated with socialism. However, they do not entirely overlap. There are branches of socialism such as libertarian socialism, that reject a centralized state, and all of these tendencies reject economic planning as well and instead favor decentrialised collective ownership of the economy and property. Libertarian socialism is a group of political philosophies that aim to create a society without political economic or social hierarchies – a society in which all violent

Furthermore, planned economies are not unique to Communist states. Communist state is a term used by many Political scientists to describe a Form of government in which the State operates under a one-party system There is a Trotskyist theory of permanent arms economy, put forward by Michael Kidron, which leads on from the contention that war and accompanying industrialisation is a continuing feature of capitalist states and that central planning and other features of the war economy are ever present. Trotskyism is the theory of Marxism as advocated by Leon Trotsky. The concept of permanent war economy originated in 1944 with an article by Ed Sard (alias Frank Demby Walter S Michael Kidron (1930-2003 was a revolutionary thinker and Cartographer. is a process of social and economic change whereby a human group is transformed from a Pre-industrial society into an industrial one War economy is the term used to describe the contingencies undertaken by the modern State to mobilise its Economy for War production. [16]

See also: State capitalism

Transition from a planned economy to a market economy

The shift from a command economy to a market economy has proven to be difficult; in particular, there were no theoretical guides for doing so before the 1990s. State capitalism, in its classic meaning is a private capitalist economy under State control One transition from a command economy to a market economy that a few consider successful is that of the People's Republic of China, in which there was a period of some years lasting roughly until the early 1990s during which both the command economy and the market economy coexisted, so that nobody would be much worse off under a mixed economy than a command economy, while some people would be much better off. Talk People's Republic of China) PEOPLE'S REPUBLIC OF CHINA ARTICLE GUIDELINES Gradually, the parts of the economy under the command economy decreased until the mid-1990s when resource allocation was almost completely determined by market mechanisms.

By contrast, the Soviet Union's transition was much more problematic and its successor republics faced a sharp decline in GDP during the early 1990s. The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991 Succession of states is a theory in International relations regarding the recognition and acceptance of a newly created State by other states based on While the transition to a market economy proved difficult, many of the post-Soviet states have been experiencing strong, resource-based economic growth in recent years, though the levels vary substantially. However, a majority of the former Soviet Republics have not yet reached pre-collapse levels of economic development.

Transition from a market economy to a planned economy

Main article: Corporatism

Government market regulation

Central governments are tempted to solve problems quickly by introducing additional market regulation. Historically corporatism (corporativismo refers to a political or Economic system in which power is held by civic assemblies that represent Economic A regulated market, or controlled market, is the provision of goods or services that is regulated by a government appointed body rather than by Supply and demand. Once such regulation is introduced, it is rarely removed, ratcheting towards a gradual increase in government power and a constraint on the mechanism of the free market. A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers Usually, big business has an advantage over small business in a strongly regulated market, because big business can cope with the bureaucracy and small business cannot take advantage of adaptivity. Big Business or big business is a term used to describe large corporations in either an individual or collective sense Big Business or big business is a term used to describe large corporations in either an individual or collective sense

Franklin D. Roosevelt’s New Deal was an example of market regulation used by the American government in an attempt to escape the Great Depression of the 1930s. The New Deal was the name that United States President Franklin D A regulated market, or controlled market, is the provision of goods or services that is regulated by a government appointed body rather than by Supply and demand.

Corporate monopoly

The process of wealth condensation results in a small number of people controlling large sections of the economy. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient Wealth condensation is a theoretical process by which in certain conditions newly-created Wealth tends to become concentrated in the possession of already-wealthy individuals

The British East India Company is an example of government-granted monopoly. The Honourable East India Company ( HEIC) referred to most commonly as the East India Company, also historically and colloquially as John Company, or In Economics, a government-granted monopoly (also called a "de jure monopoly" is a form of Coercive monopoly by which a government grants exclusive privilege

American Telephone & Telegraph (formerly Bell Telephone Company), was regarded as a natural monopoly until it was broken up by the U.S. Department of Justice in 1974. Before proposing a merge request please see Talk and see if the merger you propose has recently been made and Natural monopoly is a term used in Economics to refer to two different things The break up of AT&T was initiated in 1974 by the US Department of Justice antitrust suit against the telephone Monopoly. For animal rights group see Justice Department (JD The United States Department of Justice ( DOJ) is a Cabinet department This is an example of United States antitrust law being used to discourage centralization of corporate power. United States antitrust law is the body of Laws that prohibits anti-competitive behavior (monopoly and Unfair business practices.

Amalgamated trade unions

Small trade unions have limited power, especially against larger international corporations. A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages hours and working conditions forming A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages hours and working conditions forming Amalgamation of trade unions leads to an industry-wide group with more bargaining power but less individual interest in any particular worker. A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages hours and working conditions forming Such a union will bargain directly with government on an industry-wide basis and thus create a form of central planning that is distinct from typical (Laissez-faire) capitalism.

Similar economic models

A palace economy may be considered as a subsistence economy augmented with elements of a command economy. A palace economy or redistribution economy is a system of economic organisation in which a substantial share of the wealth flows into the control of a centralized secular administration A subsistence economy is an Economy in which a group attempts to produce no more output per period than they must consume in that period in order to survive but do not attempt

Notes

  1. ^ Alec Nove (1987), "planned economy," The New Palgrave: A Dictionary of Economics, v. Alexander Nove FRSE, FBA ( 24 November 1915, Saint Petersburg - 15 May 1994, Glasgow) was a Professor The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, pp. 879-80.
  2. ^ "Command Economy." Encyclopædia Britannica. 2007. Encyclopædia Britannica Online. 11 June 2007.
  3. ^ James R. Barth and Gerard Caprio, Jr. China's Changing Financial System: Can It Catch Up With, or Even Drive Growth. Networks Financial Institute. March 2007; Thomas O Bouman and David George Brand. Sustainable Forests: Global Challenges and Local Solutions. Haworth Press 1997 page 91
  4. ^ Myers, Danny. Construction Economics (2004), Spon Press (UK), p. 288
  5. ^ Ollman, Bertell. Market Socialism: The Debate Among Socialists (1997), Routledge (UK), p. 12
  6. ^ Alec Nove (1987), "Planned Economy," The New Palgrave: A Dictionary of Economics, v. Alexander Nove FRSE, FBA ( 24 November 1915, Saint Petersburg - 15 May 1994, Glasgow) was a Professor The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, p. 879.
  7. ^ John Barkley (1991), 'Comparative Economics in Transforming World Economy', MIT, p. 10 
  8. ^ planned economy. Dictionary. com Unabridged (v 1. 1). Random House, Inc. (accessed: May 11, 2008).
  9. ^ command economy. In Merriam-Webster Online Dictionary (2008) (accessed May 11, 2008).
  10. ^ von Brabant, Jozef M. The Planned Economies and International Economic Organizations, Cambridge University Press, 1991, p. 16
  11. ^ Paul Kennedy. The Rise and Fall of the Great Powers, page 322-3
  12. ^ www. unc. edu/depts/econ/byrns_web/GreatIdeas/Great_Ideas. DOC
  13. ^ a b c Machan, R. Tibor, Some Skeptical Reflections on Research and Development, Hoover Press
  14. ^ R. J. Rummel, DEKA-MEGAMURDERERS, <http://www.hawaii.edu/powerkills/MEGA.HTM> 
  15. ^ Hahnel, Robin. The ABC’s of Political Economy, Pluto Press, 2002, 262
  16. ^ A Permanent Arms Economy by Michael Kidron, First printed in International Socialism 1:28 (Spring 1967)

References

See also

External links

The economy of the Soviet Union was based on a system of State ownership, administrative planning Socialist competition and free labour The Great Leap Forward ( of the People's Republic of China (PRC was an economic and social plan used from 1958 to 1960 which aimed to use China 's vast population Socialist economics is a broad and sometimes controversial term Socialist economics is a broad and sometimes controversial term Participatory economics, often abbreviated parecon, is a proposed Economic system that uses participatory decision making as an economic mechanism Project Cybersyn was a Chilean attempt at real-time computer-controlled Planned economy in the years 1970–1973 (during the government of president Public ownership (also called government ownership, state ownership or state property) refers to Government Ownership of any A mixed economy is an Economic system that incorporates aspects of more than one economic system Dirigisme (from the French) (in English also "dirigism" although per the OED both spellings are used is an Economic term designating an economy A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a Technocracy: A form of government in which scientists and technical experts are in control "technocracy is described as that society in which those who govern justify themselves The economics of fascism refers to the economic policies implemented by fascist governments The economy of India, measured in USD exchange-rate terms is the twelfth largest in the world with a GDP of around $1 trillion (2008
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