The whole notion of central planning where a single central authority micromanages every detail of the economy has always been just a straw man. In my opinion, the central government is best viewed as a central nervous system in the body. It doesn’t concern itself with the minutiae of how each particular organ functions, but rather coordinates the functioning of the body as a whole. Incidentally, seeing a society itself as an organism shines light on why central planning becomes necessary as a society grows. Same coordination problems arise that complex living organisms must solve, and thus we see self similar solutions emerge.
While true, the USSR (post NEP) is a good contrast to the Chinese model. The USSR attempted to centralize demand planning and price coordination across the whole economy.
They did, but there was still plenty local planning happening even within the Soviet system. What China shows is that it’s more efficient to push central planning even further to the top.
Yes, but it was local planning, which was a planning responsibility and scope delegated by central planning. Contrast this with China where there is a stock market and commodities market.
While the stock market does exist in China, it operates within a socialist framework, guided by the principles laid out by Chen Yun who advocated for a “birdcage economy,” where the market acts as a bird, free to fly within the confines of a cage representing the overall economic plan. This idea was adopted in the early 1980s,to allow for use of market forces to efficiently allocate resources, while the state maintained ultimate control over the direction and goals of economic development. In this model, the state still acts as the planner, setting the overall goals and priorities, while the market, acting as the allocator, determining the most efficient way to achieve those goals.
It’s also worth noting that the market operates under strict regulations to curb speculation and short-term profit-making, ensuring its primary function as a tool for economic development rather than a platform for wealth accumulation. The recent dismantling of the Alibaba Group into six separate business is a great example of the state overriding the market.
Great info and I’m glad you got a chance to post it for everyone to see. This is the richer version of the point I was trying to make - that certain things can currently be attributed to the market dynamics instead of directly to central planning. I think you’ve illustrated well how central planning creates the conditions for the market to behave better than it does in liberal societies.
I think you’ve also illustrated how the Chinese solution differs from the Soviet solution.
The whole notion of central planning where a single central authority micromanages every detail of the economy has always been just a straw man. In my opinion, the central government is best viewed as a central nervous system in the body. It doesn’t concern itself with the minutiae of how each particular organ functions, but rather coordinates the functioning of the body as a whole. Incidentally, seeing a society itself as an organism shines light on why central planning becomes necessary as a society grows. Same coordination problems arise that complex living organisms must solve, and thus we see self similar solutions emerge.
While true, the USSR (post NEP) is a good contrast to the Chinese model. The USSR attempted to centralize demand planning and price coordination across the whole economy.
They did, but there was still plenty local planning happening even within the Soviet system. What China shows is that it’s more efficient to push central planning even further to the top.
Yes, but it was local planning, which was a planning responsibility and scope delegated by central planning. Contrast this with China where there is a stock market and commodities market.
While the stock market does exist in China, it operates within a socialist framework, guided by the principles laid out by Chen Yun who advocated for a “birdcage economy,” where the market acts as a bird, free to fly within the confines of a cage representing the overall economic plan. This idea was adopted in the early 1980s,to allow for use of market forces to efficiently allocate resources, while the state maintained ultimate control over the direction and goals of economic development. In this model, the state still acts as the planner, setting the overall goals and priorities, while the market, acting as the allocator, determining the most efficient way to achieve those goals.
It’s also worth noting that the market operates under strict regulations to curb speculation and short-term profit-making, ensuring its primary function as a tool for economic development rather than a platform for wealth accumulation. The recent dismantling of the Alibaba Group into six separate business is a great example of the state overriding the market.
Great info and I’m glad you got a chance to post it for everyone to see. This is the richer version of the point I was trying to make - that certain things can currently be attributed to the market dynamics instead of directly to central planning. I think you’ve illustrated well how central planning creates the conditions for the market to behave better than it does in liberal societies.
I think you’ve also illustrated how the Chinese solution differs from the Soviet solution.