Iam asked in Social ScienceEconomics · 3 weeks ago

Is a planned economy always doomed to be ineffective?

Does a planned economy have to be ineffective, even if it were not based on Marxist-Leninist ideology? Even for a small country? If no, what main flaws were present in the planned economies of Socialist States that need to be changed to make such an economy work efficiently?

2 Answers

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  • Oiy
    Lv 4
    3 weeks ago

    No one can understand your needs better than yourself (Milton Friedman). The flaw is that we should not have a common property and a common goal.

  • Zirp
    Lv 7
    3 weeks ago

    No. Lots of parts of economy are planned. Canadian dairy for instance.. farmers make sure they don't overproduce, so they can have a decent price for the milk.

    It goes wrong when you overcentralise things and allow stupid burocrats to decide what is produced and how much. "let's build an aluminium-factory!"

    and then when the factory is ready, you realise that there is no aluminium-ore to make aluminium from..

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