When the Soviet Union collapsed, the question of economic planning seemed to have been solved once and for all. In the struggle of market and plan, the market won a decisive victory. Thirty years after the fall of the Berlin wall, the verdict is no longer so clear. Worldwide there are growing academic and political debates about economic planning
From the translator: technology is changing life, even some previously unshakeable, economy can fall. Your attention — a brief note on why economic planning back in the news.
There are three reasons unexpected return. First, the Great recession of 2008. This crisis not only revealed the irrationality of markets, but efforts to contain it have resulted in large-scale state intervention, financial and regulatory. In the world after the 2008 victory of the “free and clear” of the market mechanism does not look so final.
Secondly, the ecological crisis. When it comes to sustainable development, planning many people think, but call it something else. Experts now rather refer to “scenarios” ecology, leading towards a future without hydrocarbons. In the discussion of the “Green new deal”, which erupted after project support Alexandria Ocasio-Cortez, the word “planning” sounds rare. But the idea of the subordination of production decisions and investments with long-term goals, not profit, is already in motion. This is based in economic planning.
The third reason is the development of information technology. Historically, forms of planning are faced with the so-called “problem of information”. Socialist regimes of the 20th century tried to replace the price signals of supply and demand for pre-planning. This should lead to a more rational allocation of resources (labor, natural resources), and as a result, make the economy less susceptible to crises and unemployment. Among other things, this required the ability to predict what needs we need to satisfy, and to transmit the data to production units.
In the 20th century pre-planning definitely failed. What consumers want, how they want it — these two issues within the plan were not solved effectively. To collect the necessary data to coordinate economic activity was impossible. To develop a plan to collect information on the level of macroeconomics and at the same time, to confront the inevitable uncertainties in production and changes in consumer preferences. Moreover, it must be done on time. Distortion in the expression of the needs and inertia of the production apparatus of the system has resulted in a deadlock.
One of the most important issues of the 21st century: changing algorithms and big data nature of the problem? “The revolution in big data can revive the planned economy”, it said in a Financial Times column in September 2017. The digital platform is a powerful tool of centralization and control of information. In contrast to what happened in the USSR, this centralization are not the people with their limited cognitive abilities, leading to errors and corruption. Taking her algorithms.
Amazon knows many things about the preferences of consumers in different sectors. Big data allows you to combine macroeconomic (or quantitative) coordination with microeconomic (or quality). The platform is able to collect vast amounts of information instantly and simultaneously to keep track of individual preferences. The Soviet Gosplan was not able to achieve.
The last decade, programs for enterprise resource planning (ERP) has become the main management tool in the industrial sector and the service sector. Powerful ERP give a comprehensive picture of the ecosystem in which firms operate, in real time. This greatly improves the ability to manage and transform.
Walmart uses the software package HANA as an incentive for innovation. The data collected from 245 million customers, with a speed of one million transactions per hour, from 17 500 suppliers based on the internal activity of firms, and even external data that affect the business (weather, mood, social networks, economic indicators) — this raw material is extracted Analytics solutions for the problems facing the company.
In spite of that, the algorithms may be socialists. Is it possible that Amazon, Google, or the program "Industry 4.0" of Germany, are preparing for a post-capitalist economic future? This argument does Phillips and Michael Roswarski in their recent book the People's Republic of Walmart. Alibaba boss Jack MA took the idea very seriously:
Over the past 100 years, we have seen that the market economy is the best system, but in my opinion, over the last three decades there have been significant changes, and the planned economy faster strength gains. Why? Because with access to all kinds of data, we can now see the invisible hand of the market.
Planning, obviously, not entirely an economic problem. It is a political one. It requires to take control of important production decisions that will affect all spheres of public life and relationships of society and nature. Consequently, this means the deepening of democracy.
In the 20th century, economic planning demanded authoritarian political structures. In the USSR, the bureaucracy of the state planning Commission determined the quality and quantity of the products you want to produce, i.e., what needs to satisfy, and what — not. This was done from the top down. But this relationship of authoritarianism and the plan is not inevitable. After all, capitalism also breeds political authoritarianism, which shows the growth of right-wing populism of governments.
Now is the time to be creative in the development of government institutions to combine democratic control over the economy and individual liberation from consumption. Economic planning should be bottom-up. There were a lot of experiments c a “joint” or “deliberative” democracy for about twenty years. To this day, however, the focus groups, the civil jury, the initiative budgets or meeting on consensus (consensus conferences) are not used to influence production decisions.
The French philosopher Dominique Bourg stands for the Assembly of the future. Through regulation it may be responsible for medium and long-term public projects, for example involving mitigation and adaptation to climate change. The Assembly should be empowered to make decisions about economic activity. Modern institutions of representative democracy will remain but will be improved to meet the challenges of the 21st century.
The aim is to overcome economic crises and environmental destruction. Democratic economic planning — recovery tool for collective action and gaining, over time, new forms of independence.
Tags: assessment , economy