5 ms·
90% of central planning is having a central bank. That's pulled form a quote from Lenin btw. In much of its early history, the Soviet economy outperformed many
by newaccount2021 5y ago
90% of central planning is having a central bank. That's pulled form a quote from Lenin btw.
In much of its early history, the Soviet economy outperformed many other leading industrial economies, which is what scared capitalists in the West so profoundly in the 1930s. It did so at a great and terrible cost that would be unacceptable in a free society, but it performed nonetheless.
China today is another example of central planning and high performance.
In any case, the US is clearly a planned economy - the Fed even states its inflation target, and there is a target employment rate.
- whatshisface 5y agoHow could the free market determine the money supply?
- rsj_hn 5y agoThe free market always determines the money supply, that’s not the issue. Money is created when banks make loans and is destroyed when loans are repaid. The problem is sometimes this mechanism breaks down during a banking crisis and turn get deflation or it balloons in a speculative bubble and you get inflation.
- whatshisface 5y agoI learned in economics 101 that although banks are individually responsible for making the money, the overall supply is ultimately controlled by the interest rate and reserve requirements. Both are set by the government. The free market determines who the money is supplied to, but it doesn't determine the money supply.
- fighterpilot 5y agoChina became successful after the market liberalizing policies of Deng Xiaoping that turned it into a mixed economy. They had a few hundred dollars in GDP per capita before that. So isn't this evidence that central planning was a failure?