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Planned economy
A planned economy is an economic system, usually associated with socialism, in which distribution of goods and services is determined on the basis of a common, rational plan developed by the whole society for the benefit of the whole society, as opposed to being considered on the basis of profit under capitalism.
How exactly a planned economy will function is different among left-wing tendencies; libertarian socialists advocate a decentralized approach whereas state socialists often seek central planning. Planned economies which have existed in the past include the economies of the Soviet Union, People's Republic of China until the 1970s, and others.
"Above all, it [the new social order: Ed.] will have to take the control of industry and of all branches of production out of the hands of mutually competing individuals, and instead institute a system in which all these branches of production are operated by society as a whole – that is, for the common account, according to a common plan, and with the participation of all members of society.
It will, in other words, abolish competition and replace it with association." [Emphasis added] —Friedrich Engels[1]
Planned economies have shown to be more effective than their unplanned counterparts, usually having the result of rapidly increasing production, standard of living, and other economic factors.[2]
See also
References
- ↑ The Principles of Communism, 14. "What will this new social order have to be like?" (1847). Available on the Marxists Internet Archive.
- ↑ Stephen Gowans (December 21, 2012). "Do Publicly-Owned, Planned Economies Work?". What's Left. Retrieved September 2, 2026.