> A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.
One wonders if the author would have changed his mind if he had been able to see planned economies in practice after 1950.
The author also appears to have focused on hypothetical/desired consequences of a theoretical system working under ideal conditions (i.e., if X works then everyone will be living an awesome life) while turning a blind eye to how socialist systems actually work: leave just enough scraps on the table for the masses to subsist and amass the bulk of the fruit of their labour for the socialist elites to waste on unrelated activities.
For example, check Venezuela's regime and how an oil-rich country forces it's population to live in abject poverty while the glorious socialist leadership lives a luxurious life.
Given the choice, I much rather have a fighting chance against living in abject poverty than being forced out of any alternative by a system designed to steal what I and everyone produced.
Socialist planned economies usually provided food, housing, employment, education, and medical care for free or at a subsidy. Socialist elites did live better lives, but they tended to be more modest compared to the ultra-rich excesses under Western capitalism.
Chavez's terms over Venezuela proved to be very popular with the poor people of the barrios because he used state resources to raise their standards of living. He also managed to convert them into a real political force that would support him and Maduro against the richer people in the same country who want to see Chavez's and Maduro's policies reverted. Chavez certainly did mismanage the economy in the long-term by his over-reliance on oil and currency trading oil for resources, so the oil price drops devastated the economy and ground it to hyperinflation.
It is also important to note the distinction between Socialist Planned Economy under Marxist-Leninist Communists and the "21st century socialism" of Venezeula that is a mixed market economy where it's effectively half state-managed nationalized socialism and half free market.
> Socialist planned economies usually provided food, housing, employment, education, and medical care for free or at a subsidy. Socialist elites did live better lives, but they tended to be more modest compared to the ultra-rich excesses under Western capitalism.
This is patently false. Socialist regimes pay lip service to public services while keeping them in a disfuncional state where they exist only in name only.
> Chavez's terms over Venezuela proved to be very popular with the poor people of the barrios because he used state resources to raise their standards of living.
This is patently false to the point you surely are being disingenuous. I have relatives living in Venezuela and since Chavez and his cronies took over not only are they desperate to make a living but also the whole nation has been forced to fight for survival by any means necessary. One family member of mine died due to lack of medical care because the hospital couldn't even access drugs or medical supplies, and his immediate family is scrambling to get out of the country as soon as possible. Before you speak about the delights of socialist economies first get your facts straight.
Perhaps he would, however he would have had enough exposure to see an example of a planned economy in the USSR even before 1950 - i.e. he clearly already saw what a planned economy is, which leads me to make the charitable reading of him, in which he is only positing what a planned economy could be. Interestingly, there's been some work on this recently, such as by Paul Cockshott, a computer scientist interested in economic planning.
Nevertheless, it is even more of a mistake to identify Einstein with a love or allegiance to Marxist-Leninist socialism, despite his praise of Lenin. Your reading of him as being in favour of pure economic planning is refuted by him later in the essay:
>Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems[...]
I have no doubt he was saying this in reaction to planned economies of the time.
>I have no doubt he was saying this in reaction to planned economies of the time.
True, Nazi Germany was a planned economy and that's certainly not socialist in the sense of workers having control of the means of production. It can also be argued that New Deal or war economy WWII USA was a planned economy too.
They both used the state to control the economy and to use public resources to contract out to private enterprises.
The West still has relics of economic planning after Keynesianism through monetarism and central banking control.
Indeed Stalin's first five-year plan, collectivization of farms, subsequent mass starvation, and forced-labor camps all happened in the 1920s and 1930s.
My generous interpretation is that was seen as an aberration, rather than a general rule planned economies later proved by USSR, China, Venezuela, Cuba, North Korea.
I consider myself somewhat of a socialist, but I think a planned economy is a terrible idea.
As Einstein continues:
> "Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?"
I think it's fairly likely for a planned economy to result in the enslavement of the individual. Of course so can an unregulated free market economy. A better approach is not to centralise all this power at all, but keep power and control over the economy decentralised, and the only thing that needs to be handled by any kind of government or however you want to call your centralised bureaucracy, is enforcing some basic constraints designed to ensure those rights of the individual: preventing their enslavement, en ensuring they have access to the means to live a happy life.
In other words: a regulated free market economy with a Basic Income. For everything else: just let the people figure it out for themselves.
> a regulated free market economy with a Basic Income.
While I wholeheartedly agree that that's a good idea, I think the government should probably be a smidge more involved in some areas.
I feel like letting people make up the rules as they please is just asking for mini-dictatorships popping up like you see these days with HOAs. Freedom of setting your own rules, but I think it's more important to limit the cases where your only freedom is to get out.
Natural monopolies are another instance where the government should probably step in to avoid a small group of people curtailing the freedoms of large groups. A good current example is the way ISPs currently face no competition. Of course even in these instances a light touch is preferred, In the case of ISPs you might imagine the government owning the fiber, but the ISPs providing the service. This should prevent one ISP in a regio dominating and keeping the competition out. Another example of this is public transit: Railways ought to be shared infrastructure, instead of being owned by a single company.
I'm all for maximising freedom, but what often gets lost in the discussion is how and when to limit freedoms to prevent the freedom of one person encroaching on that of another.
> "I feel like letting people make up the rules as they please is just asking for mini-dictatorships popping up like you see these days with HOAs."
> "Natural monopolies are another instance where the government should probably step in to avoid a small group of people curtailing the freedoms of large groups."
Sure, but those are all examples of regulation in order to guarantee rights and freedoms. And there are absolutely cases where the free market simply doesn't work or works very inefficiently, like public transport or health care.
But in cases where the free market works fine, with a little bit of regulation or even without any, I think that's preferable to replacing every market with a plan economy.
> a regulated free market economy with a Basic Income
any supporter of Basic Income can be either
1) shown to also be a crypto-communist (in the ideological sense, not in the anti-ideological sense where one ideology is used merely as an excuse to trample all other desirable ideologies), or
2) made to retract his/her desire for Basic Income
> We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor
Except the number of people in extreme poverty worldwide has decreased...
Sure, people say that a lot, but is this because of China turning away from socialism, or is it because China has proved a planned economy works better than a free(er) one?
Those who grabbed the power over the world collapse socialism everywhere you see - China, Russia, merging of Korea, relationship with Cuba... because capitalism has proven to provide them better slaves. Watch for more: https://www.youtube.com/watch?v=583B33gySIM&list=PLrsYCDA5sk....
We can't think of capitalism as 'market' economy anymore - with few (no more than four) corporations dictating there conditions and prices, there's no more 'market' relationship.
But socialism is no better.
"Don’t believe that your life can be better or worse depending on this or that arrangement. For our life to be good, there’s only one remedy: for people themselves to be better, and stop supporting the oppressing governing powers.
Regardless of the type of government, the calamities it causes:
- ever-increasing budgets & taxes;
- animosity towards neighbors, military preps & armies;
- enslaving of subject races;
- undermining morality."
(Leo Tolstoy, On the Importance of the Upcoming Moral Revolution http://www.earthlyfireflies.org/works-by-leo-tolstoy/)
It certainly is both. China's rationale is that their current capitalistic phase is a glorified long-term NEP (Lenin's capitalistic phase for the USSR). They claim to be doing this to build up their economy to first world levels before progressing to the next phase of socialism in accordance with Marxian progression of economic structures. The problem communist countries have faced is not being able to live up to first world levels and both superpowers, the USSR and China, decided that reverting to capitalism is the answer.
Of course, this isn't left 100% to the free market so the state has overall planned control of the economy and will intervene to preserve their interpretation of socialism ("socialism with Chinese characteristics").
China has proved that (i) it has access to vast rich western consumer markets, and (ii) that a dirty dubious economy with no transparency produces cheaper goods than a well-regulated one.
The metric for extreme poverty usually refers to earning below $1.90 a day, accounting for inflation. It's great that more people are making more than that, but I think a planned economy (at least initially) could serve them better.
The real advantage of a planned economy can be seen in the case of the USSR or China where they rapidly grew from a backwards agrarian feudal base into industrial powerhouses in the highest growth rates of the 20th century. As economist Richard Wolff says, they are the envy of the third world.
And England's capitalism of the 1840s reduced Ireland's population by nearly half.
There's a monotonous consistency in the ability of numerous political-economic organisation systems to produce extreme poverty and misery. Almost as if those were exogenous to those systems.
On an absolute basis, it's increased since the beginning of the Industrial Revolution, and the level of poverty, in constant terms, is worse than it had been in 1800 -- the survivable level of poverty has fallen.
We already have a planned economy. It’s finance economics being carefully babysat by highly paid economists telling us this much inflation is just right, injecting this much liquidity is just right, etc.
Establishing the dollar as the default global currency? The discourse around financial value of firms each quarter? The revenue generating capacity? All part of every plan of building a business.
Look at how the laws (social plans violation of which involves threat of force) control our flow of money, and our frequency discussing these things as they’re told to us reinforces the belief in its correctness.
Really what’s holding back socialism is emotional acceptance we’re already living in a heavily planned socialist society that’s been corrupted to financially benefit special interests out of deference to old ideology.
The problem of a planned economy is the economic calculation problem and lack of a mechanism for decision making (i.e. prices). Mises and Hayek laid this out VERY clearly, as early as 1922. The planner cannot possibly know enough to make the right decisions.
in the limited set of universes where time travel (of at least information) is possible, would you agree that in such a universe at least the optimization step could be centralized? the goal setting step should of course still derive from the public (with or without also utilizing future information, say comparisons by the public)
That article had an interesting reference to a 2019 book addressing this from tech POV:
"Leigh Phillips and Michal Rozworski are releasing a book in 2019 that argues that multinational corporations like Walmart and Amazon already operate centrally planned economies larger than the Soviet Union, proving that the economic calculation problem is surmountable."
28 comments
[ 94.7 ms ] story [ 2303 ms ] threadOne wonders if the author would have changed his mind if he had been able to see planned economies in practice after 1950.
For example, check Venezuela's regime and how an oil-rich country forces it's population to live in abject poverty while the glorious socialist leadership lives a luxurious life.
Given the choice, I much rather have a fighting chance against living in abject poverty than being forced out of any alternative by a system designed to steal what I and everyone produced.
Chavez's terms over Venezuela proved to be very popular with the poor people of the barrios because he used state resources to raise their standards of living. He also managed to convert them into a real political force that would support him and Maduro against the richer people in the same country who want to see Chavez's and Maduro's policies reverted. Chavez certainly did mismanage the economy in the long-term by his over-reliance on oil and currency trading oil for resources, so the oil price drops devastated the economy and ground it to hyperinflation.
It is also important to note the distinction between Socialist Planned Economy under Marxist-Leninist Communists and the "21st century socialism" of Venezeula that is a mixed market economy where it's effectively half state-managed nationalized socialism and half free market.
This is patently false. Socialist regimes pay lip service to public services while keeping them in a disfuncional state where they exist only in name only.
> Chavez's terms over Venezuela proved to be very popular with the poor people of the barrios because he used state resources to raise their standards of living.
This is patently false to the point you surely are being disingenuous. I have relatives living in Venezuela and since Chavez and his cronies took over not only are they desperate to make a living but also the whole nation has been forced to fight for survival by any means necessary. One family member of mine died due to lack of medical care because the hospital couldn't even access drugs or medical supplies, and his immediate family is scrambling to get out of the country as soon as possible. Before you speak about the delights of socialist economies first get your facts straight.
Nevertheless, it is even more of a mistake to identify Einstein with a love or allegiance to Marxist-Leninist socialism, despite his praise of Lenin. Your reading of him as being in favour of pure economic planning is refuted by him later in the essay:
>Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems[...]
I have no doubt he was saying this in reaction to planned economies of the time.
True, Nazi Germany was a planned economy and that's certainly not socialist in the sense of workers having control of the means of production. It can also be argued that New Deal or war economy WWII USA was a planned economy too.
They both used the state to control the economy and to use public resources to contract out to private enterprises.
The West still has relics of economic planning after Keynesianism through monetarism and central banking control.
My generous interpretation is that was seen as an aberration, rather than a general rule planned economies later proved by USSR, China, Venezuela, Cuba, North Korea.
As Einstein continues:
> "Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?"
I think it's fairly likely for a planned economy to result in the enslavement of the individual. Of course so can an unregulated free market economy. A better approach is not to centralise all this power at all, but keep power and control over the economy decentralised, and the only thing that needs to be handled by any kind of government or however you want to call your centralised bureaucracy, is enforcing some basic constraints designed to ensure those rights of the individual: preventing their enslavement, en ensuring they have access to the means to live a happy life.
In other words: a regulated free market economy with a Basic Income. For everything else: just let the people figure it out for themselves.
While I wholeheartedly agree that that's a good idea, I think the government should probably be a smidge more involved in some areas.
I feel like letting people make up the rules as they please is just asking for mini-dictatorships popping up like you see these days with HOAs. Freedom of setting your own rules, but I think it's more important to limit the cases where your only freedom is to get out.
Natural monopolies are another instance where the government should probably step in to avoid a small group of people curtailing the freedoms of large groups. A good current example is the way ISPs currently face no competition. Of course even in these instances a light touch is preferred, In the case of ISPs you might imagine the government owning the fiber, but the ISPs providing the service. This should prevent one ISP in a regio dominating and keeping the competition out. Another example of this is public transit: Railways ought to be shared infrastructure, instead of being owned by a single company.
I'm all for maximising freedom, but what often gets lost in the discussion is how and when to limit freedoms to prevent the freedom of one person encroaching on that of another.
> "Natural monopolies are another instance where the government should probably step in to avoid a small group of people curtailing the freedoms of large groups."
Sure, but those are all examples of regulation in order to guarantee rights and freedoms. And there are absolutely cases where the free market simply doesn't work or works very inefficiently, like public transport or health care.
But in cases where the free market works fine, with a little bit of regulation or even without any, I think that's preferable to replacing every market with a plan economy.
As an adamant libertarian, I'll admit that this is the right way to do socialism.
(Though I'll co-opt Linus's opinion on CVS: "There is no way to do socialism right.")
any supporter of Basic Income can be either
1) shown to also be a crypto-communist (in the ideological sense, not in the anti-ideological sense where one ideology is used merely as an excuse to trample all other desirable ideologies), or
2) made to retract his/her desire for Basic Income
Basic Income is also somewhat popular with some right-wing libertarians. For one thing, it helps make the labour market more free.
Except the number of people in extreme poverty worldwide has decreased...
Half full or half empty...
Of course, this isn't left 100% to the free market so the state has overall planned control of the economy and will intervene to preserve their interpretation of socialism ("socialism with Chinese characteristics").
The real advantage of a planned economy can be seen in the case of the USSR or China where they rapidly grew from a backwards agrarian feudal base into industrial powerhouses in the highest growth rates of the 20th century. As economist Richard Wolff says, they are the envy of the third world.
There's a monotonous consistency in the ability of numerous political-economic organisation systems to produce extreme poverty and misery. Almost as if those were exogenous to those systems.
Gregory Clark, A Farewell to Alms. See:
https://press.princeton.edu/books/paperback/9780691141282/a-...
Chapter 1:
http://assets.press.princeton.edu/chapters/s8461.pdf
Establishing the dollar as the default global currency? The discourse around financial value of firms each quarter? The revenue generating capacity? All part of every plan of building a business.
Look at how the laws (social plans violation of which involves threat of force) control our flow of money, and our frequency discussing these things as they’re told to us reinforces the belief in its correctness.
Really what’s holding back socialism is emotional acceptance we’re already living in a heavily planned socialist society that’s been corrupted to financially benefit special interests out of deference to old ideology.
https://en.wikipedia.org/wiki/Economic_calculation_problem
"Leigh Phillips and Michal Rozworski are releasing a book in 2019 that argues that multinational corporations like Walmart and Amazon already operate centrally planned economies larger than the Soviet Union, proving that the economic calculation problem is surmountable."
https://www.versobooks.com/books/2822-people-s-republic-of-w...
The book page has blurbs from Cory Doctorow and Ken MacLeod among others.