I'm doing some reading in The Problems of a Planned Economy, a 1990 paperback theme selection from the first edition of the New Palgrave Dictionary of Economics. The essays were written after the beginning of Perestroika but before the fall of the Soviet Union and Eastern Europe, some phrasing and assumptions are dated, but there is still a lot of interest and value in the many of the essays. Tadeusz Kowalik, then professor at Waraw University and who passed in 2012, has an interesting analysis on "Central Planning" and at the end presents this intelligent perspective on planning, market, and freedoms.
PLANNING
AND FREEDOM. Ever since its
inception, the
question of economic planning has set off disputes
about democracy and individual freedom.
In its original purely
ideological
concept,
planning
used either
to be equated with democracy
or presented as democracy's
exact opposite: suffice
it to mention the New Leftist
utopia of a social
system based
on the
belief that
production
and
distribution can somehow be planned by the people
with a total absence of market and state. The
eternal
Kingdom
of Freedom
was to come simply
as soon as market
and state alike
have been
abolished.
More
elegant,
albeit
no less
utopian, is the free-marketeers'
blueprint
for rejecting any governmental
planning
as a threat to efficiency and
freedom. Although
quite fashionable
(and not
only in
the West),
this
mode of thinking is
nonetheless
outside
the
mainstream
of disputes over planning
versus freedom.
In
fact,
most
major currents
of
social
thinking
have'
undergone
a
process
of
radical
re-thinking
in
the course
of recent decades.
This holds
for
liberalism
(Mannheim,
1940;
Galbraith,
1973;
Lindblom,
1977)
and for non-Communist
socialism
(Crosland,
1956; Crossman,
1965;
Nove,
1983)
as
well
as
for
Marxism
(Brus,
1975;
Horvat,
1982;
Kornai,
1985).
Whatever
differences
may
divide
all
these currents of thought,
as
indeed
individual
thinkers
within
each
current,
all
of
them
are aware
of
two
kinds
of
threat
to
freedom
one
that comes
from
all-embracing,
hierarchical
and
bureaucratic
planning,
and
another
that comes
from
the
failure
to plan
anything
at all.
The
market mechanism is regarded a something like a barrier to
bureaucratic arbitrariness. But its failure in turn may put at hazard
not only economic but even political stability, thereby destroying the
foundations of the desired social order. Planning, within given
limits, thus turns out to be an indispensable condition of freedom.
While making a plea for a polycentric model of economy—both in the
sense of providing for
different
forms of ownership
and of decision making
- all -these
currents
of
thinking
believe that society
as
a whole should have an authentic
say
(via
its
representatives)
the
main
lines
of
investment
and
general
rules
for national
income
distribution.'
'.
Of
course, there is nothing inevitable in the long-run
direction this movement
will
take either
in the West
or in the
East.
The chance
to create a social
order which
would be
based
upon the three
main tiers of plan,
the market
and freedom
would
be much greater if it were clear
that each
of these is a
necessary
condition for
high
socio-economic
efficiency,
and that
freedom
too can be
viewed
not only as
a value
in itself
but also as
a specific
kind of production
factor. Some
authors
have
questioned
this
dependence of economic
efficiency
on political
democracy (Gomulka,
1977).
However,
neither
studies of
this relationship
in many Third
World
countries
(Adelman
and Taft,
1967) nor
the record of previous reforms in
the
Communist
world supply
any
definite
answer to
this question.
On the other
hand,
the analysis
of pressures on,
and prospects
of, the
evolution of Communist
systems
in Eastern
Europe has
led to a rather
persuasive
argument
(Brus,
1980) that
with
democratizing
internal
political
relations
these
systems
will
be unable
to remove
(or at
least to
reduce
substantially)
central planning's
chronic
deficiencies,
such as
insufficient
and distorted
information
flows, negative
selection
of managerial
personnel,
chronic
investment
failures,
labour alienation,
etc. The
stagnation
threatening
the
Communist
countries presses the ruling groups
to more
radical
reforms which
would
combine
plan, market
and freedom.
At the
same time,
repeated
setbacks of
neoliberal
economic policies
in the West
may well
generate
fresh
and strong
public pressure
for changes
in a similar
direction.
lBLIOGRAPHY
Adelman,
I.
and
Taft,
C.M.
1967.
Society,
Politics
and Economic
Development:
A Quantitative
Approach.
Baltimore.Johns
Hopkins
Press.
Bauer,
T.
1978.
Investment
cycles
in
planned
economies.
Acta
Oeconomica
21(3),
243-60.
Brus,
W.
1975.
Socialist
Ownership
and
Political
Systems.
London
and
Boston:
Routledge
&
Kegan
Paul.
Brus,
W. 1980.
Political
system
and
economic
efficiency:
the
East European
context.
Journal
of
Comparative
Economics
'4(1),
March,
40-55.
Cave,
M.
and Hare,
P.
1981.
Alternaiiv~
Approaches
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New
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Press.
r
"
',;
.'.
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C.A.R.
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The
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New York:
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1957.
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Crossman,
R.H.S.
1965.
Planning
and
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In
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in
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London:
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R.W.
and
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E.H.
1974.
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.E.conomy
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'~
,
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1983.
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>
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wyboru
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Press
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Here are two articles on Kowalik that should be of interest.
