The economic problems which have led to the decline in popularity of central pla

Question:

The economic problems which have led to the decline in popularity of central planning?

economic problems which have led to the decline in popularity of central planning

Best Answer - Chosen by Asker: Starvation and shortages across the USSR exposed many of the problems.

Without economic forces giving a dynamic push to supplies of goods, there is no way for a planner to know if they are right or wrong. They may think that X toasters are desired when it was half as many, but may short the number of pans needed because they sent steel to make toasters instead.

Essentially it's all the logistical problems of planning a major corporation, on a much much larger scale. Planning 5 years out for a company like Boeing is hard, and they're in a duopolist industry where the competition can't just rapidly launch a new product. Imagine being in charge of the entire economy and Boeing is just a small piece of it.

In India they launched a car manufacturing company shortly after WW2 that was using pre mass production techniques. Due to it's insulation from market forces they never changed, the cars being sold in the early 1990's were nearly identical to the cars first produced in the 1950's. No modern safety features, no modern brakes, no modern construction, etc. As a result, cars were still made by a single mechanic on lifts much like an auto mechanic here works on one. It left them with an inferior product that cost so much that the average consumer couldn't even touch one.

Communist and Socialist central planning both suffer from the same problems, neither work in any predictable way and only harm the people under them.