Fascism and The Third Reich

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The problem with planned economies is that the levers that government has at its disposal are generally the macro-economic levers of fiscal policy and monetary policy. When government becomes directly involved in making microeconomic decisions, those decisions get made with bureaucratic incentives rather than marketplace incentives in mind. Hence the economic stagnation of the Soviet Union (for one).

On the other hand, when free markets are left to their own devices, then the failure of government to control the market means that eventually the market is going to collapse. Capitalism stopped for 4 days in 2008 because no one understood who was holding what in the marketplace.

The key is to ensure that consumers, producers, investors and government each are operating in their proper role in the economy. The distrust of government must not allow it to become sidelined; the "greed" of capitalists must not be used as a basis to restrict their ability to invest as they choose; taking consumers for granted must not allow monopolies to arise.

It is when one of these pillars falls out of balance that the economy is imperiled.

In any sizeable advanced society the combinatorics of the society/economy far exceed the ability to control it by diddling a few parameters. The market is just too complex to be controlled by a burocracy. That is why autonomous market mechanisms do much better than centralized control.

Capitalistic economies occasionally break down also, but that happens much less frequently than centralized control command economies. Market economies fail but their recover quickly. That is because there are parallel paths for information flow. Also the supply/demand activity is in and of itself a control and communication path.

The so-called socialistic economies currently existing operate and function to the extent that they have a robust market component that is not under heavy government control.

The most successful model in modern times is the so called "mixed economy" which has some of the controls that socialist economies have plus a robust and functioning market component.

It is fairly clear the a centrally controlled command economy won't work and a free-for-all unregulated market economy will have failures. An economy somewhere in the middle seems to function best.

ruveyn

Here's the problem. These days more and more can be produced by fewer and fewer people thanks to robots and computers.

As a child I can remember banks being filled with people cranking away at adding machines to bring your passbook up to date. Now we have computers.

America could make enough cars for the whole world. But so could Japan and Korea and China and Germany.

If we can produce goods with fewer and fewer people then how is everyone else supposed to live?

In Science Fiction there were two views of the future.
The "Utopian" version where most of the work was done by robots and human beings sat around living like kings and the "bad" world where some people live in crystal towers and others live in the sewers living on rats.

Guess which future we are headed for?

That is true for tangible goods. Not true for services. What you observe is the reason why our economy is becoming more and more service oriented.

ruveyn

My history teacher said that communism couldn't work on long term first because no one would force himself to make something new like an invention or a piece of art,since he won't be rewarded,or at least very smally.Also,everyone is payed equally in a communists system,if a doctor is payed 30 000$ a year,then the guy who clean up the garbage in the street will be payed 30 000$ a year too.So every doctor will want to flee to the United States or another capitalistic state to make some big money and get rich.To prevent this,communists governements will often cut off people freedom and keep them in their own country.He explained that no society could be both free and equal at the same time.

I can understand the position of "no society can be free and equal at the same time". There might be more complex ways to look at the matter as well, as it is not as if every inequality promotes freedom, or that freedom must stand against inequality.

Critics of planned economies argue that planners cannot detect consumer preferences, shortages, and surpluses with sufficient accuracy and therefore cannot efficiently co-ordinate production-wikipedia

Question, as this would relate to the demand of skinny girls, I would say that the "free market" approach to meeting the demand has been dreadfully insuficient aswell

You could not be more correct.

-Bill, otherwise known as Kraichgauer

The banks are a good example here where they had many employees dealing with individual accounts as people visited them. Now most business is conducted through the internet and automatic teller machines and credit cards, much of which is automated and banks charge a high fee for personal contact.. This type of service oriented business will also succumb to automation.

If the political will and vision were there (which it is not) this would surely not be a problem (which it quite likely will become).



In the UK it's not unusual for university graduates in their late 20s to be thousands of pounds in debt and still stuck in low paid temporary employment or for young professional couples to struggle to buy a half-decent place to live. Also it's not unusual to get on a bus and hear six or seven languages and not a word of English, or to hear some surly youth playing foul-mouthed rap music on his phone while everyone looks down too scared to confront him, or to hear sexually explicit language from the mouths of 13 year olds, or to hear some moron unselfconsciously arranging a drug deal on his mobile.

The conveniences of modern life (I mean, hey, i-pads, DVD players and laptops are getting cheaper all the time!) blinded me to much of this nonsense for a long time. When I started to notice it, I heard some like-minded people saying that come the next financial crisis, the people would decide that enough was enough. Well, the crisis came, but not much changed. Perhaps we are destined for "Brazilification": a society where the lucky few live in their gated communities and the rootless masses scrape by, united by nothing more than football and "dance" music. That is perhaps one of the happier alternatives.