Acemoglu/Robinson in their wnf blog have been running series of posts on central planning.
They started the topic in early August questioning why Soviet Union picked up central planning which was inefficient way to create institutions. The usual theme is that Bolsheviks were influenced by Marx and hence implemented central planning in USSR. So it is seen that central planning existed because of Marxian ideology.
You knew back even then A/R duo would be unimpressed and point instead to the role of political power and centralised institutions in picking central planning.
In later posts the duo picked examples (here and here) of countries which adopted central planning without any role of ideology.
So, in the recent post they say central planning existed because of control:
To see what this problem might be, let’s return to the creation of central planning in the Soviet Union in the 1920s. A significant part of this was the decision to collectivize agriculture and move all peasants into a system of state controlled collective farms. Though this might be interpreted as an ideological decision, another way of seeing it is that Stalin did this in order to more effectively tax and control the peasantry — that is, more effectively for Stalin and the elite controlling the Soviet state, but of course disastrously for the peasants themselves. The peasants produced a lot less in a collectivized farm, but the Soviet state got a bigger share of the smaller pie and a larger amount in absolute.
Essentially central planning is not about the efficient allocation of economic resources, it is about control.
Central planning maximizes the extent of control that the state, and the people running the state, exercise. The desire to control others is a constant in history and is part and parcel of the construction of states. If the state can grab all the land and resources and control who and on what terms people get access to them, then this maximizes control, even if it sacrifices economic efficiency.
This sort of economic and political control — not Marxist ideology — is what central planning is all about. This is not to deny that Marxist ideology supported and legitimized central planning in several 20th-century societies. But it is to emphasize that the emergence and persistence of central planning is often a solution to the central economic and political problem of many elites: to control and extract resources from society.
Hmm..
Comparative development economics getting really interesting..hope this blog continues for a long time…
