The biggest flaw of a planned society is information. My compatriots will usually say the flaw is the lack of incentive to spend other peoples' money responsibly, or the different values people place on things. Both of these points are valid, but they are smaller hurdles than the information problems.
The big problem is that information is not centralized, and a central planner doesn't know the best way to distribute all resources. As Sean Masaki Flynn wrote of the Soviet Union:
"The entire problem is far too complex and requires too much information to be solved. The result was that resources were constantly being misdirected and wasted. For instance, food often rotted at farms because no railcar had been scheduled to take it to cities; the officials hadn't accounted for an early harvest, and the railcars were busy elsewhere. In a price system, the farmers would have simply paid to bid the railcars away from other uses. This solution wasn't possible in a centralized economy in which prices weren't used to allocate resources.However, as much as I agree with this, one thought has always stood out - what if someone designed an intelligent computer program that could include every detail of every persons waking life? Wouldn't that solve the problem better than capitalism.
Like many hypothetical solutions, it turns out someone already thought of this plan - and implemented it in 1970's socialist Chile. That brings us to the link I stumbled upon today that inspired this post. Project Cybersyn was an attempt to rule an economy from a digital center.
So how well did it work?
Awful. It didn't work at all. Partially because of tech limits of the day, and partially because the focus was making a project that looked like it would work, instead of actually making it work.
But if Cybersyn had both of those problems what would happen if they were fixed? What if we had modern computers, or even futuristic computers? Wouldn't that work.
Well, no. This still doesn't solve the problem of centralizing information. Each person has their own wants and desires that cry out to be satisfied. How can we understand all of those at once? Look at the trouble the government ran into trying to centralize information on it's own "stimulus package."
The only way the government knows how to get information together to its central command is to ask people to fill out forms in great details. We can see how well that turned out. It doesn't look like there's a new way solving this problem - just an existing one.
That solution is capitalism. People will simply spend their money on the wants and desires they find the most important. When they don't have enough money, they will have to make some compromise. This is also a quick response - a lot quicker than the slow wheels of government.
But hey, if you can think of a new system that communicates what resources people needs, takes into account how precious those resources are in relation to the actual important of the desire, and does so in a fast, productive manner that doesn't violates basic human rights standards, than I'm all ears.
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