Examples would be North vs South Korea, China vs Hong Kong & Taiwan, and West Germany vs East Germany. See which system worked better for the most people. If any conclusions could be drawn then they could be used to advise and guide other countries in their economic policies. (brightfut)
I agree with Balak that these examples are not very representative, not because they are ahistorical but because they are too historical.
If you want a good example, use an example that is limited to one economy - the examples of countries that were split is no good, because the splits created two new economies, oriented toward different larger economies, not two economies competing in one world economy. A better set of recent examples would be comparing states that are basket cases with states that have managed some kind of “progress” (in quotes, because the “progress” is by no means unequivocal when you consider whole societies rather than a few cherry-picked economic sectors - establishing a factory is “progress”, bu not necessarily for the workers in it if they are underpaid, overworked, work in poor conditions, forced to work, etc.).
In any case, in virtually all the examples of 20th century economic success you will see a huge involvement of government. Japan is one such example, where the line between government and business has been blurred since modern Western capitalist structures were first introduced. China’s recent “progress” is entirely government sponsored and controlled. Even in the U.S. government money in the form of government contracts forms the basis of a majority of corporations’ ability to plan (some very major companies would cease to exist without government money, many others would be crippled).
Try comparing one economy to itself, and see how it fares under a free-market free-for-all, and centralized planning. Say - the U.S. In every period where there has been a free-for-all, a few people get immensely rich, while others are ruined or kept poor, and then there is a period of reform and control where the middle class is slowly built up, only to be wrecked again. In the late 1800’s there were a couple of depressions, then came reform. In the post WWI years there was rampant corruption, and then a depression. That depression was solved by government involvement - first the New Deal, which brought stability, then by WWII which brought prosperity - thanks to huge government involvement in the economy. That involvement remained in place until the 80’s, when real wages started going down consistently, though not precipitously, because there remain huge institutions that continue o control large areas of the economy in some detail.
I think it is pretty clear that whatever country or economy you look at, you see that a lack of regulation almost inevitably leads to an increase in fraud, in violence, in unrest, in poverty, and all kinds of social ills, while government involvement leads to a more fair (though not entirely fair), more orderly, peaceful, prosperous, and happy society. The problem with central planning has always been it fetishization of industrialism - all focus on the “commanding heights” and a disparaging of small business. If you can avoid that, while allowing government to curb excesses and provide infrastucture (economic and physical), you get a betetr mix that leads to more freedom than any libertarian nonsense. The question ends up as one of ethics, not economics.
Once these factors are taken into consideration, and in view of the brutal the conditions in which they were born and struggled to survive, I would say that the workers states (like the former USSR) or today Cuba, China, Vietnam and North Korea (despite their bureaucratic deformities) show exactly the superiority of a centralized, planned economy over anarchic capitalist private property. (Balak)
I don’t agree with this. I think that the salient feature of planned economies that followed revolutions is their extremely rapid modernization. But that modernization in turn depended on the technologies that alrady existed as a result of capitalist development. In a sense, these economies were anomalies because they were in “backwaters”, and the Marxist theory applied to them was out of place because crucial elements of Marxist theory were absent (notably, a large and educated - in the Marxist sense - proletarian class). The major achievement of those revolutions was not industrial, but agricultural, and only where they let up on the theory.
If you want to see a planned economy that tends to work well, you have only to look at capitalist corporations. Every large corporation is nothing but a mechanism for planning production, for managing inputs and outputs, and managing demands as much as supply. Much of government, even in the US, is devoted to economic planning - to gathering economic information and disseminating it in ways that seek to regulate the economy for the benefit of “the economy” (which usually amounts to a set of statistics). This is probably the most important economic and political fact that libertarians (as well as socialist) overlook, or miss completely. Just look at something like U.S. agriculture - heavily regulated, heavily planned, huge government involvement, near totalitarian corporate control, and it manages to produce so much food that overeating is the leading cause of death in the U.S. today.
No one advocates a completely centrally planned economy - such a thing cannot even exist. However, the entire purpose of economics as a practical science (if it can be considered a such) is precisely economic planning. That is the only mundane, practical, daily use of economic theory. When a libertarian or free-marketeer complains of central planning or socialist planning or what have you, the real complaint is usually that law has gotten in the way of someone’s profit (i.e., someone’s frau
