Russia to Return to Planned Economy

[Ben Kenobi]

Uh, 'planned by consumers', isn't that what market capitalism is? You plan through your purchases.

[Sava]

good job making that connection, genius

[binTravkin]

The state‐owned and controlled portion of the Chinese economy

State-owned/controlled is not planned.
And chinese industry is not planned either.

You need to read up how real planned economy worked in USSR to get a taste of it.
I've not been to North Korea, but from the sound of it, it may be the only planned economy still existing.
AFAIK Cuba is more like pre-industrial economy with socialism "icing", though I've not been to Cuba either.

Just consider these:
1. Prices were set by state. There were books with hundreds of pages, each page - a table containing dozens of items in format: "Name, some kind of ID numbers, price". I've seen those books firsthand. You can still get them in archive where I live.

2. "Needs of the people" were "calculated" by the state. Every person was assigned a certain "quota" of each type of good he/she needs. The list of "needs" was also determined by state. Many things now essential and actually available at the time even in USSR where not in that list, while it contained bizarre "need" for every person to receive 1 newspaper a day, "half pair a socks" each month and other utterly ridiculous stuff. My wife, studying management and economics did a university research product about this.
My grandmother from mother's side was working 3-4h each evening to produce clothing. Because most types of clothing, especially crucial winter gear was not on the "needs" list.

3. The "calculations" then went "downstream" from factories to raw materials factories, etc. Each adding it's own level of mistakes, bureaucracy, ridiculousness on the level probably never seen by an average Westerner in whole life. I've just barely seen USSR myself and I can say in my whole life (I'm 30) I'm yet to see the level of inefficiency that my parents and grandparents report to have seen.

4. But that was not it. Factories couldn't just "ask" for the needed inputs. They had to "lobby" them through power structures and the (communist) Party. Needless to say, this was slow, inefficient, insufficient and often in poor quality. This was also the essence of the "planning process" - gathering of various "lobbies" and then trying to stick them together in a way that the badly misguided "needs of the people" be met. Military and science was better off as their needs were more often defined by themselves. However, in case of military this led to massive overproduction of materiel. Russia has ~10 million kalashnikov rifle derivatives in storage. Tens of thousands of tanks and guns were produced.

5. There was no unemployment. You could only get fired if you did something really stupid. Not doing anything useful at work was not in really stupid" list. My grandfather was an alcoholic. He died from multiple intestine problems caused by it. He was drunk at work every second day. He took stuff from work for his own purposes. He was never fired.

6. There was no competition. Literally. In some industries there existed "competitors" on paper, but in reality the contract was won by political contacts. Merit would only come to play when something went really bad, so bad it couldn't be brushed under the carpet or offset by yet more "lobbying".


This list could go on.

The only time that planned economy seemed to work was roughly 1971.-1983. during the time of high oil prices and because of massive surplus funds that they generated.
This is what many soviets remember nostalgically.
And this is why there's talk about it - nostalgia about "past greatness".
If you look closely, these nostalgia borne statements are coming out in Russia every week.
They are meant to distract the ordinary people from massive increases of prices and other problems caused by war and sanctions.
They are not meant for people outside Russia and neither they are meant for people who understand what they mean if implemented.

[Dinner]

My guess is Putin has not interested in returning to a Soviet style system. What he probably does want is something similar to the Chinese system where SOEs control many key industries, especially strategic industries, but which would be semi-professionally managed. That is not really a great system (the SOEs in China are riff with corruption and epic mismanagement only over come by vast financial help from the government) but this would increase Putin's personal power and give him more positions to reward cronies which is the name of the dictatorship game.

The Sochi games last year really did illistrate Putin's patronage system. He demands absolute personal loyalty to him and in return he funnels state cash to his cronies/inner circle so everyone gets to skim and never have the authorities question it. That is where the missing 2/3rds of the money "spent" on Sochi went; into the pockets of the cronies as well as Putin himself.

After all, Putin didn't become the world's richest man by being honest. He got there by looting on an epic scale and the whole system of his dictatorship is set up like a mafia "family". It is really just a run of the mill kleptocratic patronage system like we see in most dictatorships.

[Ellestar]

I always ran planned economy in SMAC and C4.

Democratic/Planned was a default combo for everyone but some specific strategies. Pop Boom was so op in SMAC

[Ellestar]

2. "Needs of the people" were "calculated" by the state. Every person was assigned a certain "quota" of each type of good he/she needs.

Also, fashion or color or material weren't accounted for. So, basically, if a plan is to make 10000 TV's, you can make exactly the same model for 20 years before someone will decide to change plans to 10000 "Color TV's".

Also, you can't make any inovations - any change in production process will slow down production, so you'll probably fail to produce the planned numer of product, and that's a huge deal. If you'll just make the same TV for 20 years, that's fine, you're correctly implementing the plan for your factory.

3. The "calculations" then went "downstream" from factories to raw materials factories, etc. Each adding it's own level of mistakes, bureaucracy, ridiculousness on the level probably never seen by an average Westerner in whole life. I've just barely seen USSR myself and I can say in my whole life (I'm 30) I'm yet to see the level of inefficiency that my parents and grandparents report to have seen.

Actually, plans were not that connected to each other and to real life. Say, many lower-priority construction projects lasted for decades. There was a special word for it "dolgostroy", translated as "long-lasting, long-delayed construction" or something like that. That was because a ministry planned more buildings than a total USSR output of cement, and wasn't accounting for unfinished projects.
More so, since it was considered "good" to make more things than planned, and their work was to plan new construction, they planned more construction per year than it was possible to build (so even if global plans were right, they would have made them wrong anyway by planning more than they should have planned). That system was completely detached from reality on all levels, and that was the real problem.

4. But that was not it. Factories couldn't just "ask" for the needed inputs. They had to "lobby" them through power structures and the (communist) Party. Needless to say, this was slow, inefficient, insufficient and often in poor quality. This was also the essence of the "planning process" - gathering of various "lobbies" and then trying to stick them together in a way that the badly misguided "needs of the people" be met. Military and science was better off as their needs were more often defined by themselves. However, in case of military this led to massive overproduction of materiel. Russia has ~10 million kalashnikov rifle derivatives in storage. Tens of thousands of tanks and guns were produced.

Basically, in such a planned economy "administrative resource" replaces money - you effectively "buy" things you need for your factory/laboratory/whatever with "administrative resource". Money is a convertible resource with a real world value and a working feedback loop (idiots with inefficient business tend to go broke), "administrative resource" isn't attached to a real world and has no feedback loop. And that leads to huge inefficiences.