> Planned economies don’t work great beyond small scopes.
This is a categorically false statement. The Soviets turned the Russian empire from an agricultural backwater with a minority literate populace, into an advanced industrialised state, scientific leader and economic superpower that was on par with the US for decades, a transformation that took place within a span of merely 20~30 years. Planned economies have been demonstrated to have extremely strong potential. Of course, a planned economy is only as good as its planning, and humans are fallible; we have yet to work out a solution to that particular issue.
The USSR was never economically or scientifically on par with the US. They managed to be relatively competitive in some endeavours by concentrated massive percentages of their national people and resources on certain endeavours (industrialization, space, the military), often with brutal violence. The US was militarily competitive, often with more advanced equipment, at a fraction the economic resources - and did it at the same time as having one of the highest living standards in the world (and often had the positive results of military tech bleeding into the civilian sector, like computers).
Magnitogorsk, a massive soviet city built around a steel mill, was essentially built with American expertise (this whole documentary is extremely fascinating on how central planning got to sophisticated and how the USSR ground to a halt): https://youtu.be/h3gwyHNo7MI?t=1023
This is not to say that any planning is bad, but having a central state trying to control everything from how many belt buckles to make down to how far cab drivers should drive each year, and you're going to become a bureaucratic nightmare. Central planning everything becomes a logarithmic planning nightmare, especially when trying to innovate at the same time. You can't plan around output of innovation because the planners are often far removed from everything. A planner would probably try and "plan" on how to breed a faster horse instead of a car, for example.
I'm reminded of an interview I once saw with Gorbachev. He was talking about how he was just promoted into the central committee, essentially the highest ring of the Soviet state. He had just made it to the top and one of his first meetings was having dealing with the issue of persistent shortages of women's panty hose. He was flabbergasted that he was at the top rung of a country that can blast people into space, but can't deal with basic consumer goods availability.
Also, many countries have industrialized just as fast without central planning, particularly several asian ones. True, then did centrally set goals and use various carrot and stick initiatives, but otherwise let the market dictate most of the rest.
> The USSR was never economically or scientifically on par with the US
We can call it solidly #2 if you prefer, but going from a failed empire to #2 in the world is still a real achievement. To be clear, I was not making a statement on whether I think central planning is superior; I was merely contesting the claim that it can not work at scale, which I find to be clearly untrue. Whether it's inferior or not, we have an impressive example indicating that success is at least possible. I would also expect the modern era to offer a better opportunity for central planning than in the past if any nation wanted to give it another go because significantly more well-informed decisions could be made with the degree of data and instant communication we have available today. That said, I certainly wouldn't be keen to advocate for it in my own country, because I don't much like the idea of giving the state absolute control in an era with a level of surveillance the KGB could not have dreamed of.
You can't even measure it cleanly. It was so isolated and its currency wasn't even convertible, but by most measures Japan and West Germany had larger economies with far, far, far better living standards. Go to per-capita level equivalents and you'd be hard pressed to find it higher than any western developed country. Even economic basket-case countries in South America often had better living standards.
North Korea is sending things into space. You can't measure a country on its isolated accomplishments, even if they're impressive.
Many asian countries industrialised with what was essentially central planning. Not in the literal "one government decision maker" sense but via a handful of extraordinarily large mega-corporations operating as central planners themselves.
The big five chaebol in South Korea for example orchestrate more than half the economic activity in the country and that's down from what it was before the turn of the century.
Similarly Japan was heavily industrialised under the zaibatsu and they effectively ran the entire economy of Japan through the entire imperial era. It was only during the american occupation that the zaibatsu were broken up and afterwards the keiretsu would take their place as the dominant drivers and orchestrators of economic activity.
This isn't to say that central planning or extremely heavily integrated planning and operations are a good thing for an economy or remotely healthy in the long term, just that they were pretty prevalent in many major cases of rapid industrialization in asia regardless of whether they came in a socialist or capitalist flavor.
Virtually any country that achieves political stability and effective institutions experiences rapid development in the modern world with open knowledge and trade networks.
There is nothing special about central planning in that manner that a laissez-faire economy would also achieve at that low development.
That's quite a misattribution of success. The Russian empire was politically stable throughout the industrial revolution era, and yet lagged behind other great powers substantially. The Soviet revolution, of course, ushered in a famously politically unstable era with regular, massive purges. Meanwhile, there are many relatively politically stable countries that never managed to become especially industrialised over a period of many decades even up to the modern day, for example Mexico.
There's also a difference between "any country can rapidly develop", and what the USSR did, reaching a superpower status only two countries in the world achieved. For example, the USSR produced 80,000 T-34 medium tanks to the US's 50,000 Sherman tanks and Germany's 8500 PzIV tanks, and it was superior to both. That is a ridiculous feat, and it happened in the middle of a massive invasion that forced the relocation of huge swathes of industry to boot. The USSR was also the first to most space achievements, and it was second to develop nuclear weapons. The USSR did not just catch up to "any industrialised nation", it surpassed them all completely other than the US.
> The Russian empire was politically stable throughout the industrial revolution era, and yet lagged behind other great powers substantially.
The Russian empire was (finally) developing industrially at the outbreak of WW1. It's industrialization was retarded by it's hanging onto serfdom (including in practice after it was technically ended) far longer than the rest Europe (that prevented people moving into cities and work in factories).
> There's also a difference between "any country can rapidly develop", and what the USSR did, reaching a superpower status only two countries in the world achieved. For example, the USSR produced 80,000 T-34 medium tanks to the US's 50,000 Sherman tanks and Germany's 8500 PzIV tanks
The US sent over 400,000 trucks and jeeps to Russia (on top of building many more for itself and other allies), built out a massive navy and merchant marine, built 300,000 planes of various types (almost as much as the rest of the other allies and axis combined), supplied massive amounts of food, energy, etc and researched and built the atomic bomb (and didn't steal it). They did this while fighting a war on two fronts and maintaining a relatively good living standard (it's a fair argument to make that they weren't dealing with a direct invasion threat, though). They also had one of the best military supply chains in the world, that still persists to this day.
The superiority of the T-34 is overplayed. It was a decent tank that was good enough to build at scale, but the Sherman was more survivable and just as reliable.
The Soviet Union went to massive amounts of trouble to gloss over lend-lease aid for propaganda reasons. Russian blood absolutely won the war in Europe, but the USSR had massive amounts of help.
>industrialised over a period of many decades even up to the modern day, for example Mexico.
Pretty sure Mexico's GDP per capita was higher for quite a while, and their stagnation lied precisely in improper government interference that closed off the economy with protectionist policg rather than embracing free trade. Nor did these have inclusive institutions or really stable political situations.
The thing about the USSR, just like with China and India and USA is that once the economic growth sets in, their large populations compared to existing European states would obviously lead to much larger economies of scale and thus GDP growth. But of course, even given that large absolute growth, living standards never did converge with Western Europe. That speaks more to how central planning stagnated things.
This is all false, I guess you've never been to Soviet Union nor russia (that country doesn't deserve capital R). Central planning is dysfunctional at its core, ignoring subtleties of smaller parts. Also, it was historically always done in eastern Europe hand in hand with corruption, nepotism and incompetence where apparatchiks held most power due to going deepest in ass kissing and other rectal speleology hobbies, not because they were competent.
I come from one such country. After WWII, there was Austria and there was eastern bloc to compare. Austria was severely damaged and had much lower GDP than us. It took mere 40 years of open market vs centrally planned economy to see absolutely massive differences when borders reopened and people weren't shot anymore for trying to escape - we didn't have proper food in the shops ffs. Exotic fruits came few times a year, rotten or unripe. Even stuff grown in our country was often lacking completely. Any product ie electric ones, or cars were vastly subpar to western ones while massively more costly (and often design was plain stolen from the western companies).
Society as a whole made it because almost everybody had a big garden to complement everything basic missing in shops. The little meat you could buy was of worst quality, ladden with amount of toxic chemistry that wouldn't be acceptable in Bangladesh.
> The proximate cause of the famine was the infection of potato crops by blight (Phytophthora infestans)[14] throughout Europe during the 1840s.
Vs.
> While most scholars are in consensus that the main cause of the famine was largely man-made, it remains in dispute whether the Holodomor was intentional, whether it was directed at Ukrainians, and whether it constitutes a genocide, the point of contention being the absence of attested documents explicitly ordering the starvation of any area in the Soviet Union. Some historians conclude that the famine was deliberately engineered by Joseph Stalin to eliminate a Ukrainian independence movement. Others suggest that the famine was primarily the consequence of rapid Soviet industrialisation and collectivization of agriculture.
You could've read a bit more of the article. Proximate cause != ultimate cause.
> Initial limited but constructive government actions to alleviate famine distress were ended by a new Whig administration in London, which pursued a laissez-faire economic doctrine, but also because some assumed that the famine was divine judgement or that the Irish lacked moral character,[20
Money is power. Markets produce wealth inequality. The richest use their money to buy influence and write the rules. Fundamentally a “regulated market” is an unstable system that eats itself, a fiction.
No system consisting of humans is ever stable. We can dampen various events, but building a stable system is impossible. Too many things change constantly around us.
Not even old ossified feudal systems were stable. Either the Mongols came, or Black Death, or some smart-ass with his moveable type, and nothing was like before.
Markets are nothing more than the aggregate expression of what people do, need, desire. It's an expression of a free society. No market means a Stalinist society.
> Markets produce wealth inequality.
That always reminds of Margaret Thatcher's famous words in Parliament: "They'd rather the poor be poorer provided that the rich were less rich."
> They'd rather the poor be poorer provided that the rich were less rich.
That is an absolutely reasonable stance? Wealth isn't absolute, it's relative. If the rich are less rich, more resources are available for everyone else.
Richness is about available resources. The poor being poorer means that they have even less resources, so it precludes that there would be "more resources available for everyone else". What you propose is the rich getting less rich and the poor getting less poor.
Markets are the expression of an unfree society because they concentrate power in the hands of the few. Those with more money benefit by exploiting those with less - exploiting workers on the one hand and consumers on the other (through rent extraction). Stalinism is one form of planned economy but in your view the choices are Stalinism vs unregulated markets as if no other options exist. Absurd.
After decades of neoliberalism (thanks to politicians like Thatcher) we can see what a failure it has been. Wealth inequality is growing, climate change is getting worse, far right movements are spreading, governments are run by oligarchs, industry has declined, the working class is squeezed, labor movements have been crushed, housing shortages.. it’s an ideology of class war by the rich against the working class.
> Stalinism is one form of planned economy but in your view the choices are Stalinism vs unregulated markets as if no other options exist.
You've shifted from "market" to "unregulated market". Your point is against markets in general and you haven't explained what's your understanding of "market" is (it seems at the very least unclear to you).
Trying to abolish "the market" can only lead to Stalinism, or whwtever you can to call it, because, again, since a market is the expression of people's actions, needs, and desires abolishing it has to mean abolishing individuals' freedoms. This is not absurd or "ideological propaganda", this is factual (and common sense, really) and proven again and again through the 20th century.
Markets are a place where buyers and sellers come together and exchange money for goods and services.
Markets exploit. Example: the labor market; individuals are forced among unfavorable options to work for the enrichment of business owners otherwise they will end up on the street. Business owners themselves do not face this choice; they have their capital to fall back on. Another example is the housing market where the wealthy have bid up housing as a financial asset, so the working class pays a larger and larger share of income to banks and rentiers, a cash flow from workers to the wealthy. Now people are making ‘choices’ here so supposedly that means markets are expression of free desires. But when one’s choices are constrained due to the power differential between the haves and have nots, the choices are not a free choice. To have actual agency you have to have power, but the power is in the hands of the ownership class.
Maybe you think markets are a necessary evil. But they are not some bastion of freedom like you suppose. That is absurd. We should look at markets for what they are not to candy coat them.
> Markets are the expression of an unfree society because they concentrate power in the hands of the few.
The idea of markets is that both sides are unable to influence the price. What you describe is a problem, but it isn't a healthy/free/working market anymore. I agree that the current economy is suboptimal, but the problem isn't capitalism and and free markets. It's rather a lack of the latter.
I guess see a “free market” as a contradiction, a utopia that even if it existed for a moment would promptly undo itself. As for capitalism - capture of the state by monied interests has always been a central feature.
A totally free market is of course utopia, but a lot of markets actually come close. Think your local butchers, bakeries and mechanics. All business with less than 10 employees and the boss is actually working. There are not that much markets that are actually problematic, but of course we talk about them a lot. Most local markets are actually fine, it's the big multinational corporations that are the problem.
> As for capitalism - capture of the state by monied interests has always been a central feature.
Capitalism is about the concept of private ownership and an economy primarily controlled by the decisions of private business oriented societies. Capture of the state isn't necessary, but common and normal up to a point.
Capitalism is a system where workers create value through their work and are compensated with a portion of that value in the forms of wages. The business owner, the capitalist, is able to extract a portion of that for themselves because they own the business. The state maintains this exploitation of workers’ productivity through so-called property rights - the “rights” of the business owner over the worker. Without the state, this system falls apart.
What separates capitalism from earlier forms, e.g. guilds in the middle ages is that every person can decide to make their own business at any time. Nobody is predestined to a specific profession or estate. That not everyone has its one business is because not everyone wants to do that managing work, some people want to do productive work and a lot of projects are larger than a single person could do.
That work can be exchanged for money predates (the current form of) capitalism and depends fundamentally only on the concept of money alone. I fail to see how that is exploitation per se. You choose to trade something you have for something you want. That's freedom. Taking that away means slavery or starving people.
> The state maintains this exploitation of workers’ productivity through so-called property rights - the “rights” of the business owner over the worker.
What are you talking about? What "rights" of a business owner? The only thing they make are voluntary contracts. You are doing the same when you buy groceries, you are trading money you have for the work of others. What you describe is (wage) slavery, which we claim to have abolished.
Yes they are property rights, but show me the person who doesn't have property. I bet even the homeless person doesn't want it to be legal that the few processions he has can be taken away by anybody, because they just want it.
In civilized countries employees also have more rights than employers e.g. for notice periods, precisely because the working market is often in a state where the employee has less negotiation power. The contract drafter is also the disfavoured party in court.
No you need a state to enforce the property rights of capitalists over workers.
Nor are people all “free” under capitalism - for example the ability to start a business is predicated on assets to fund the business. Capitalist freedoms is freedom for the rich.
And the supposed freedoms of a worker to enter into a contract are a choice between lesser evils - limited choices given their precarious position relative to employers. Jeff Bezos vs an Amazon warehouse worker - it’s not a contract between equals. You seem intent on denying the real power difference between employers and employees as supposedly free arrangements.
As for worker rights they have been fought for by the labor despite the vicious resistance of the capitalist class. Since the 1980s those rights have deteriorated as wealth has continued to consolidate. It’s a trend that’s likely to continue as the richest pollute our globe, promote austerity, extract rent from the working class, undermine democracies, and instigate war.
> No you need a state to enforce the property rights of capitalists over workers.
Can you please define what you mean with "property rights of capitalists"? I don't think we are thinking of the same. When I think of property rights, I think of the concept of exclusive ownership of a thing, which is maintained by declaring theft to be illegal. That is a right, that everyone has including the homeless person living next to the train station.
> Nor are people all “free” under capitalism - for example the ability to start a business is predicated on assets to fund the business. Capitalist freedoms is freedom for the rich.
You can start selling parsley growing in your living room tomorrow, from seeds you found in the local park. However we didn't just started being settled yesterday, so you do need to compete with all the other people already doing things. That you need resources to live, that you don't just have, is not something, that was invented by the "evil capitalists", that is something, that is just human nature (actually not specific to humans). It is true, that some people are born rich, and most don't, but this is unfair not unfree.
> And the supposed freedoms of a worker to enter into a contract are a choice between lesser evils - limited choices given their precarious position relative to employers. Jeff Bezos vs an Amazon warehouse worker - it’s not a contract between equals.
Yes, people like Jeff Bezos are an issue, and Amazon is famous for being a shitty company. However most employers are not Jeff Bezos and most employees don't work for Amazon. You could also start working at the carpenter next door and if you are very good, you will inherit the company. They are looking for people like crazy, prizes for them are high and a lot of craftsmen need to close their business, not because of less demand, but because they are old and their is no one to inherit them to. Working at a carpenter requires you to have finished school, which is payed for by the state and actually mandatory.
> You seem intent on denying the real power difference between employers and employees as supposedly free arrangements.
> In civilized countries employees also have more rights than employers e.g. for notice periods, precisely because the working market is often in a state where the employee has less negotiation power. The contract drafter is also the disfavoured party in court.
Yes, once you are in a contract you need to fulfill them, however you can make any contract you like and are free to terminate them at any time (with a notice period).
> As for worker rights they have been fought for by the labor despite the vicious resistance of the capitalist class.
That highly depends on the country. Often also rulers have seen that peace in their society makes for a stronger society and employers that employees that don't need to think about feeding their children produce better work and providing benefits to their employees improves there competitiveness in the workers market. Traditionally states also didn't liked persons becoming richer than them, as this might pose a threat, people like Jeff Bezos are very much a new phenomena.
So-called property rights are a legal construction that protects the wealth of the wealthy from the working class utilizing the justice system to maintain the domination of the wealthy over the working class, classifying expropriations of their wealth as theft. Capitalist states have always been subordinate to the wealthy, and the justice system is one branch of that apparatus.
> once you are in a contract you need to fulfill them, however you can make any contract you like and are free to terminate them at any time (with a notice period).
This is a bankrupt notion of freedom that ignores the power differences between the parties in the contract. Those with less money have fewer choices available to them and are thus less free. That’s why relationships of exploitation continue to exist such as between the Amazon worker who pisses into a bottle to boost their metrics while Bezos retains the freedom to sit on his billions and pay politicians to do his bidding. These relationships wouldn’t exist if the parties were on equal footing.
> It is true, that some people are born rich, and most don't, but this is unfair not unfree.
Wealth differences are power differences. The power differences give rise to exploitative relationships. Wealth differences aren’t a fact of nature. They are a result of how we as humans have organized our societies. We have made this and we can unmake it. Sucking our thumbs and saying “that’s just the way things are” is part of the ideological apparatus that maintains the power of the capitalist class over the working class.
Wealth differences are power differences and as such impinge on freedom since those with less wealth have their choices subtracted in relationships of capitalist exploitation.
> classifying expropriations of their wealth as theft
Like I wrote earlier the average homeless also wants to have "expropriations" of his things to be classified as theft. Normalizing "expropriations" also results in a self-education to an attitude that does not fare well in a society.
> ignores the power differences between the parties in the contract.
No we are not "ignoring power differences". That is why we have (labor) laws after all, whose independent application you also don't seem to like. Laws only limit the powerful, the powerless would be even more at the mercy of the powerful without (enforced) laws, as this is the very meaning of having or not having power.
I do not think that the existence of Amazon and people like Bezos, is the result of a healthy, competitive market. If anything it has destroyed the very same. The actions of Amazon are borderline to literally illegal, which is why they need to transport the workers across country borders to evade law enforcement.
> These relationships wouldn’t exist if the parties were on equal footing.
Which is why these relationships are affected by labor laws. If you want to suggest, that we should invest in law enforcement to deal with these issues or maybe tweak the laws a bit, to make more of that behaviour illegal, then I agree.
> Wealth differences are power differences.
Yes.
> The power differences give rise to exploitative relationships.
Given the absence of a healthy state, yes.
> Wealth differences aren’t a fact of nature.
Maybe.
> They are a result of how we as humans have organized our societies.
Yes.
> We have made this and we can unmake it.
Citation needed.
> Sucking our thumbs and saying “that’s just the way things are”
This is a strawman, nobody is suggesting that.
I do not want to be subject to the "ideological apparatus" that rises from your ideas. I would if my dad hasn't fought against it, under threat of live to him and the family (which is why my grandfather was against it). No I very much do not want to see how your ideas work out in practice AGAIN. Read a history book.
> Wealth differences are power differences and as such impinge on freedom
I think we also have a different definition of freedom as well. Having less choices doesn't make you less free. Arbitrary limiting choices does. Not being able to snip your fingers and be rich, doesn't make you unfree, if anything being attached to wealth makes you unfree. Forcing you to work for someone, forbidding you from buying or selling a product makes you unfree.
Equality =/= Freedom. It is perfectly possible to have high inequality but individual agency when operating in a positive sum game.
If you want to critique unequal distribution of power, that has always been the case with any society. You cannot coordinate thousands without some form of delegation. But problems borne of the market are always much easier to resolve than problems borne if the political. Therefore it is better to contain an unavoidable problem in a manageable domain that let it establish itself in a more concrete way.
The actual failures of the Western economies lie in naive assumptions about dealing with mercantalist countries and NIMBYism, but given this forum is against the solutions to both it is more politically acceptable to blame everything on "neoliberalism".
Inequality has always existed to some degree, sure, but that’s a shallow platitude. Markets have give us levels not seen since the Pharaohs. No the existence of any inequality doesn’t justify the insane levels we see today.
And blaming NIMBYism not Thatcher’s ideology for UK’s stagnation is pretty funny. Like that has had more influence.
> The actual failures of the Western economies lie in naive assumptions about dealing with mercantalist countries and NIMBYism, but given this forum is against the solutions to both it is more politically acceptable to blame everything on "neoliberalism".
And turning themself more into mercantalist countries, which is meant by 'blame everything on "neoliberalism"'.
Even under capitalism there is a lot of central planning at huge scales. Walmart is one American example. Woolworths and Coles are another couple in Australia. These companies aren’t rocketing up at the market each morning and taking the latest price… they are managing supply and pricing end to end for most of what they do in advanced.
All great achievements were result of economic planning.
The moon landing (and the necessary R&D and buildup) wasn't based on market-based economic incentives.
There are multiple examples of advanced high-tech economies built up with the help of central planning married to market forces - basically every East Asian country followed this blueprint.
The USSR was a much more powerful economy than it capitalist successor, even though it wasn't run especially effectively.
City supported housing initiatives produce with extensive public planning and infrastructure investments produce much better results than for-profit developers building the least amount of stuff for the most amount of money.
There are 3 main methods of economic control: profit motive, central planning, and intrinsic incentives. Purist approaches that rely on just one or reject the other tend to have bad outcomes.
The market does work, but it’s a giant paper clip AI and needs regulation in order to not turn everything into paper clips.