A planned economy, also called a command economy, is an economic system in which the state owns or controls the means of production and a central authority sets production targets and allocates resources and labor by directive rather than through market prices. Its legitimacy claim is that centralised, expert direction of production according to a rational plan serves the whole of society's material needs more justly and more reliably than the unplanned outcomes of market competition, which it holds to be wasteful, unstable and skewed toward the interests of those who already own capital. The Soviet Union's State Planning Committee, or Gosplan, founded under Vladimir Lenin in 1921 to draw up a single national economic plan, gave the model its first institutional form, before Joseph Stalin's first Five-Year Plan of 1928 committed the whole Soviet economy to comprehensive central planning and forced collectivization. It is the variant of socialism practiced most fully in the Soviet Union under state ownership of industry and collectivized agriculture, and in Maoist China, distinguished from social democracy, which retains a market economy and private property alongside redistribution and a welfare state, by its direct state control of production itself rather than its regulation and taxation.
Facts
Origin Year1928 marks the launch of the Soviet Union's first Five-Year Plan, when Gosplan, an advisory body since 1921 producing non-binding annual estimates, took on the comprehensive, directive planning role over nationalized industry and, soon after, collectivized agriculture that this atlas's own description names as the mechanism's defining case. War Communism, the wartime requisition system of 1918 to 1921, was an emergency measure rather than a deliberate long-term planning system and is not treated as the origin here. Founding ContextPut into its fullest modern practice by the Soviet Union's first Five-Year Plan, launched in 1928 under Joseph Stalin, which set centrally determined production targets for industry and agriculture in place of market prices, a model subsequently adopted with variations by other Communist states and, in more limited dirigiste forms, by some non-Communist postwar governments. 1 Classification
Ideological Family or Spectrum PositionEconomic System or Doctrine 1 Connections
Advocated By
Source Joseph Stalin (History.com)
Source Vladimir Lenin (History.com)
Associated With
This source names China directly: "agriculture, and in Maoist China, distinguished from social democracy, which retains a market economy and private property alongside redistribution and a welfare state, by its direct state control..."
Source Command Economy (Britannica Money)
Shares state provision but stops short of abolishing private ownership.
Held Differently
Developmental State, Ideologies Johnson classed it as plan rational, distinct from Soviet-style plan irrational central planning.
Source Command Economy (Britannica Money)
Rejected Here
Source Laissez-faire (Britannica)
Sources
1. Command Economy (Britannica Money)
Encyclopaedia BritannicaIdeological family, description
A planned economy, also called a command economy, is an economic system in which the state owns or controls the means of production and a central authority sets production targets and allocates resources and labor by directive rather than through market prices.
- Associated With: Developmental State
View the Source Vladimir Lenin (History.com)
Joseph Stalin (History.com)
A&E Television Networks (History.com)Advocated By: Joseph StalinView the Source Laissez-faire (Britannica)
Encyclopaedia BritannicaAssociated With: Laissez-faire CapitalismView the Source Reader Challenges (0)
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