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The book Red Plenty [1] is about why centralized planning didn't work in the USSR. It is not a very technical book. But it shows quite well the reasons why cent

• norea-armozel 10y ago
  The sad thing is the Soviets got their ideas from the US industrial firms and management theorists. They built their whole system based on the assumption that they could engineer people's tastes. That mostly works if you can trick people into thinking it's for their own good or that they thought it up themselves. Thus inducing demand for a smaller market of goods that are sold nationally. But there's a big downside obviously: gluts. In a capitalist system this leads to firms having to scale back sharply and possibly to their own detriment or worse they dump the excess goods on other markets to limit supply in their primary market to keep prices from falling (which leads to other market's own firms basically taking a hit whenever an adjoining market tanks like what happens in agriculture when the US farmers dump wheat and other goods on Nigeria or other countries). The USSR just dealt with the same problem more simply: they dumped the goods in the middle of Siberia. It's funny seeing how modern capitalism now is dealing with the same issues that the USSR did but in a more slow and painful manner. Sadly, it means we all pay for it in higher costs of living and lower returns on investments (bye bye 401k, heh).