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68-421: The Monnet Plan emphasized expansion, modernization, efficiency, and modern management practice. It set investment targets, and allocated investment funds. The plan’s process – focusing, prioritizing, and pointing the way – has been called “indicative planning” to differentiate it from highly directive and rigid Soviet-style central planning . France emerged from WWII severely weakened economically. It had been in

136-413: A market economy , a free price system is intended to serve this purpose). This difficulty was notably written about by economists Ludwig von Mises and Friedrich Hayek , who referred to subtly distinct aspects of the problem as the economic calculation problem and local knowledge problem , respectively. These distinct aspects were also present in the economic thought of Michael Polanyi . Whereas

204-694: A New Socialism (1993), the computer scientist Paul Cockshott from the University of Glasgow and the economist Allin Cottrell from Wake Forest University claim to demonstrate how a democratically planned economy built on modern computer technology is possible and drives the thesis that it would be both economically more stable than the free-market economies and also morally desirable. The use of computers to coordinate production in an optimal fashion has been variously proposed for socialist economies . The Polish economist Oskar Lange (1904–1965) argued that

272-411: A competing marketplace to meet the needs of the most consumers most efficiently. This phenomenon is recognized as spontaneous order . Additionally, misallocation of resources would naturally ensue by redirecting capital away from individuals with direct knowledge and circumventing it into markets where a coercive monopoly influences behavior, ignoring market signals. According to Tibor Machan , "[w]ithout

340-510: A desired pattern. In international comparisons, state-socialist nations have compared favorably with capitalist nations in health indicators such as infant mortality and life expectancy. However, according to Michael Ellman , the reality of this, at least regarding infant mortality, varies depending on whether official Soviet or WHO definitions are used. The state can begin building massive heavy industries at once in an underdeveloped economy without waiting years for capital to accumulate through

408-567: A distributed network of disparate economic agents or even production units itself. Decentralized planning is usually held in contrast to centralized planning, in particular the Soviet-type economic planning of the Soviet Union 's command economy, where economic information is aggregated and used to formulate a plan for production, investment and resource allocation by a single central authority. Decentralized planning can take shape both in

476-404: A fictional planned economy in a United States around the year 2000 which has become a socialist utopia. Other literary portrayals of planned economies include Yevgeny Zamyatin 's We (1924). The government can harness land , labor , and capital to serve the economic objectives of the state. Consumer demand can be restrained in favor of greater capital investment for economic development in

544-555: A focus on the management of the Soviet economy. Opposition from the Defence Ministry killed Kitov's plan. In 1971 the socialist Allende administration of Chile launched Project Cybersyn to install a telex machine in every corporation and organization in the economy for the communication of economic data between firms and the government. The data was also fed into a computer-simulated economy for forecasting. A control room

612-817: A hasty version of planning with unrealistic targets, bureaucratic waste, bottlenecks and shortages . Stalin's formulations of national plans in terms of physical quantity of output was also attributed by Daniels as a source for the stagnant levels of efficiency and quality. Economist Robin Hahnel , who supports participatory economics , a form of socialist decentralized planned economy, notes that even if central planning overcame its inherent inhibitions of incentives and innovation, it would nevertheless be unable to maximize economic democracy and self-management, which he believes are concepts that are more intellectually coherent, consistent and just than mainstream notions of economic freedom. Furthermore, Hahnel states: Combined with

680-538: A market in which allocations can be made in obedience to the law of supply and demand, it is difficult or impossible to funnel resources with respect to actual human preferences and goals". Historian Robert Vincent Daniels regarded the Stalinist period to represent an abrupt break with Lenin's government in terms of economic planning in which an deliberated, scientific system of planning that featured former Menshevik economists at Gosplan had been replaced with

748-404: A more democratic political system, and redone to closer approximate a best case version, centrally planned economies no doubt would have performed better. But they could never have delivered economic self-management, they would always have been slow to innovate as apathy and frustration took their inevitable toll, and they would always have been susceptible to growing inequities and inefficiencies as

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816-497: A period of economic stagnation even when the war broke out and by 1945, national income, in real terms, was little more than half of what it had been in 1929. Further, worker productivity was just one third of the U.S. level, chiefly due to low investment. For example, in France there was one tractor for every 200 people on the land, while in the U.S., there was one for every 43. The Monnet Plan aimed to increase investment and modernize

884-407: A planned economy in that a comprehensive and binding plan did not guide production and investment. The further distinction of an administrative-command system emerged as a new designation in some academic circles for the economic system that existed in the former Soviet Union and Eastern Bloc , highlighting the role of centralized hierarchical decision-making in the absence of popular control over

952-457: A post-capitalist society. Decentralized planning has been a feature of anarchist and socialist economics . Variations of decentralized planning such as economic democracy , industrial democracy and participatory economics have been promoted by various political groups, most notably anarchists , democratic socialists , guild socialists , libertarian Marxists , libertarian socialists , revolutionary syndicalists and Trotskyists . During

1020-654: A project called Million Programme , implemented from 1965 to 1974. Some decentralized participation in economic planning occurred across Revolutionary Spain, most notably in Catalonia, during the Spanish Revolution of 1936 . In the May 1949 issue of the Monthly Review titled " Why Socialism? ", Albert Einstein wrote: I am convinced there is only one way to eliminate these grave evils, namely through

1088-663: A very grave character." Ten months later, on April 3, 1948, the U.S. launched the European Recovery Program (ERP), commonly known as the Marshall Plan. ERP aid was spread over 50 months, and the Modernization and Re-equipment Plan was prolonged for two years to coincide with the 1952 end date of the ERP. The bulk of France’s ERP aid, just under $ 3 billion, was channelled to fulfilling the objectives of

1156-473: Is contested by some Marxists . Decentralized planning has been proposed as a basis for socialism and has been variously advocated by anarchists , council communists , libertarian Marxists and other democratic and libertarian socialists who advocate a non-market form of socialism, in total rejection of the type of planning adopted in the economy of the Soviet Union . Most of a command economy

1224-424: Is highly undemocratic and totalitarian in practice. Indicative planning is a form of economic planning in market economies that directs the economy through incentive-based methods. Economic planning can be practiced in a decentralized manner through different government authorities. In some predominantly market-oriented and Western mixed economies, the state utilizes economic planning in strategic industries such as

1292-461: Is organized in a top-down administrative model by a central authority, where decisions regarding investment and production output requirements are decided upon at the top in the chain of command , with little input from lower levels. Advocates of economic planning have sometimes been staunch critics of these command economies. Leon Trotsky believed that those at the top of the chain of command, regardless of their intellectual capacity, operated without

1360-821: The Egyptian countryside, for Hellenistic India , and to a lesser degree the more barbaric regions of the Seleucid , the Pergamenian , the southern Arabian , and the Parthian empires". Scholars have argued that the Incan economy was a flexible type of command economy, centered around the movement and utilization of labor instead of goods. One view of mercantilism sees it as involving planned economies. The Soviet-style planned economy in Soviet Russia evolved in

1428-487: The NEP period to counter structural inefficiency and the problem of bureaucracy. Economist Pat Devine has created a model of decentralized economic planning called "negotiated coordination" which is based upon social ownership of the means of production by those affected by the use of the assets involved, with the allocation of consumer and capital goods made through a participatory form of decision-making by those at

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1496-540: The Spanish Revolution , some areas where anarchist and libertarian socialist influence through the CNT and UGT was extensive, particularly rural regions, were run on the basis of decentralized planning resembling the principles laid out by anarcho-syndicalist Diego Abad de Santillan in the book After the Revolution . Trotsky had urged economic decentralisation between the state, oblast regions and factories during

1564-522: The article wizard to submit a draft for review, or request a new article . Search for " Pierre Uri " in existing articles. Look for pages within Misplaced Pages that link to this title . Other reasons this message may be displayed: If a page was recently created here, it may not be visible yet because of a delay in updating the database; wait a few minutes or try the purge function . Titles on Misplaced Pages are case sensitive except for

1632-473: The 1929 level, 25% higher, by 1949; and by 1950 to improve on the 1929 level by a further 25%. Although not all of the stated goals were met, Yergin and Stanislaw argue that what the Plan did, at a crucial period, “was provide the discipline, direction, vision, confidence, and hope for a nation that otherwise might have remained in a deep and dangerous malaise.” And it set France on the road to an economic miracle in

1700-521: The 1950s. The Monnet Plan created the impetus for the Schuman Plan , initiated by Jean Monnet and proposed by French foreign minister Robert Schuman on 9 May 1950. Prewar, France had been the world’s biggest importer of coal, and the Monnet Plan anticipated coal imports from Germany. To avoid the concern, which dated to the prewar period, that coal would be available on more favourable terms to

1768-523: The 1970 Chilean distributed decision support system Project Cybersyn in an attempt to move towards a decentralized planned economy with the experimental viable system model of computed organisational structure of autonomous operative units through an algedonic feedback setting and bottom-up participative decision-making in the form of participative democracy by the Cyberfolk component. The 1888 novel Looking Backward by Edward Bellamy depicts

1836-640: The Beginning of 1946 . This report outlined France’s needs, resources, and proposed projects, and explained how funds lent would be spent. It was written in English as well as in French, with the U.S. Congress in mind. On May 28, 1946 an agreement was reached with the U.S. government for approximately $ 1 billion worth of new funding, plus the prospect of a $ 500 million loan from the World Bank ( IBRD ). This

1904-545: The French economy. Part of the drive to modernization was to change ways of thinking. For example, the plan promoted machinery adoption in agriculture because “a farmer driving a tractor will no longer think like a farmer following a horse.” The General Planning Commission was established on 3 January 1946 by the Chairman of the French Provisional Government, Charles de Gaulle . The formal aims of

1972-616: The German market and so provide an advantage to German industry, Schuman aimed to prevent coal and steel firms from acting as cartels which could restrict supply by national market. The Schuman Plan would mean the pooling of markets and the expansion of production. This was viewed as a force for peace in Europe, since "The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible." The Schuman Plan led to

2040-566: The Gram Sabhas (village-based institutions) and the planners subsequently seek to plan accordingly. Some decentralized participation in economic planning has been implemented across Revolutionary Spain, most notably in Catalonia, during the Spanish Revolution of 1936 . The United Nations has developed local projects that promote participatory planning on a community level. Members of communities make decisions regarding community development directly. Pierre Uri From Misplaced Pages,

2108-724: The Monnet Plan. ERP dollars were used to acquire raw material and machinery imports, which were sold in France for francs. These francs or “counterpart funds,” were allocated by the French government to the Plan. In 1949 and 1950, between 50% and 90% of the Monnet Plan’s resources came from counterpart funds. ERP aid represented 20% of all French investment from 1948 to 1952, and that margin was sufficient for some projects to go ahead that probably would not have otherwise – such as investments in large-capacity steel rolling mills. The Monnet Plan's goals were ambitious. The initial objectives were to reach France’s 1938 production level by 1948; to reach

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2176-414: The Plan were: (1) to develop national production and foreign trade, particularly in those fields where France is most favourably placed; (2) to increase productivity; (3) to ensure the full employment of manpower; (4) to raise the standard of living and to improve the environment and the conditions of national life. In pursuit of its objectives, the Plan set production and other targets for 1950 according to

2244-476: The Soviet economy on the basis of a network of computing centers in 1959. Kitov's proposal was rejected, as later was the 1962 OGAS economy management network project. Soviet cybernetician , Viktor Glushkov argued that his OGAS information network would have delivered a fivefold savings return for the Soviet economy over the first fifteen-year investment. Salvador Allende 's socialist government pioneered

2312-459: The aerospace industry. Mixed economies usually employ macroeconomic planning while micro-economic affairs are left to the market and price system. A decentralized-planned economy, occasionally called horizontally planned economy due to its horizontalism , is a type of planned economy in which the investment and allocation of consumer and capital goods is explicated accordingly to an economy-wide plan built and operatively coordinated through

2380-561: The computer is more efficient than the market process at solving the multitude of simultaneous equations required for allocating economic inputs efficiently (either in terms of physical quantities or monetary prices). In the Soviet Union, Anatoly Kitov had proposed to the Central Committee of the Communist Party of the Soviet Union a detailed plan for the re-organization of the control of the Soviet armed forces and of

2448-563: The context of a mixed economy as well as in a post-capitalist economic system. This form of economic planning implies some process of democratic and participatory decision-making within the economy and within firms itself in the form of industrial democracy . Computer-based forms of democratic economic planning and coordination between economic enterprises have also been proposed by various computer scientists and radical economists . Proponents present decentralized and participatory economic planning as an alternative to market socialism for

2516-698: The creation of the European Coal and Steel Community , which laid the foundation for the 1958 establishment of the European Economic Community, the forerunner of the European Union. The Monnet Plan was the first plan produced by the General Planning Commission ( Le Commissariat général du Plan ), and the agency continued to produce multi-year plans for France until 2006. The General Planning Commission

2584-583: The economic ministries. He wanted to avoid permanent negotiations between ministerial departments and was willing to resign, if necessary, on this point. Yergin and Stanislaw argue that this was a brilliant administrative coup and succeeded in insulating the planning function from the vagaries of French politics. While hundreds of people participated in Modernization Commissions, the General Planning Commission staff

2652-695: The economy. More recent approaches to socialist planning and allocation have come from some economists and computer scientists proposing planning mechanisms based on advances in computer science and information technology. Planned economies contrast with unplanned economies , specifically market economies , where autonomous firms operating in markets make decisions about production, distribution, pricing and investment. Market economies that use indicative planning are variously referred to as planned market economies , mixed economies and mixed market economies . A command economy follows an administrative-command system and uses Soviet-type economic planning which

2720-621: The economy. The possibility of a digital planned economy was explored in Chile between 1971 and 1973 with the development of Project Cybersyn and by Aleksandr Aleksandrovich Kharkevich , head of the Department of Technical Physics in Kiev in 1962. While both economic planning and a planned economy can be either authoritarian or democratic and participatory , democratic socialist critics argue that command economies under modern-day communism

2788-457: The economy. The goal of such an economic system would be to achieve conscious control over the economy by the population, specifically so that the use of the surplus product is controlled by the producers. The specific forms of planning proposed for socialism and their feasibility are subjects of the socialist calculation debate . In 1959 Anatoly Kitov proposed a distributed computing system (Project "Red Book", Russian : Красная книга ) with

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2856-420: The effects of differential economic power grew. Under central planning neither planners, managers, nor workers had incentives to promote the social economic interest. Nor did impeding markets for final goods to the planning system enfranchise consumers in meaningful ways. But central planning would have been incompatible with economic democracy even if it had overcome its information and incentive liabilities. And

2924-457: The establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of

2992-421: The expansion of light industry and without reliance on external financing. This is what happened in the Soviet Union during the 1930s when the government forced the share of gross national income dedicated to private consumption down from 80% to 50%. As a result of this development, the Soviet Union experienced massive growth in heavy industry, with a concurrent massive contraction of its agricultural sector due to

3060-441: The former stressed the theoretical underpinnings of a market economy to subjective value theory while attacking the labor theory of value , the latter argued that the only way to satisfy individuals who have a constantly changing hierarchy of needs and are the only ones to possess their particular individual's circumstances is by allowing those with the most knowledge of their needs to have it in their power to use their resources in

3128-897: The 💕 Look for Pierre Uri on one of Misplaced Pages's sister projects : [REDACTED] Wiktionary (dictionary) [REDACTED] Wikibooks (textbooks) [REDACTED] Wikiquote (quotations) [REDACTED] Wikisource (library) [REDACTED] Wikiversity (learning resources) [REDACTED] Commons (media) [REDACTED] Wikivoyage (travel guide) [REDACTED] Wikinews (news source) [REDACTED] Wikidata (linked database) [REDACTED] Wikispecies (species directory) Misplaced Pages does not have an article with this exact name. Please search for Pierre Uri in Misplaced Pages to check for alternative titles or spellings. You need to log in or create an account and be autoconfirmed to create new articles. Alternatively, you can use

3196-483: The individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow-men in place of the glorification of power and success in our present society. While socialism is not equivalent to economic planning or to the concept of a planned economy, an influential conception of socialism involves the replacement of capital markets with some form of economic planning in order to achieve ex-ante coordination of

3264-450: The input and participation of the millions of people who participate in the economy and who understand/respond to local conditions and changes in the economy. Therefore, they would be unable to effectively coordinate all economic activity. Historians have associated planned economies with Marxist–Leninist states and the Soviet economic model . Since the 1980s, it has been contested that the Soviet economic model did not actually constitute

3332-548: The labor shortage. Studies of command economies of the Eastern Bloc in the 1950s and 1960s by both American and Eastern European economists found that contrary to the expectations of both groups they showed greater fluctuations in output than market economies during the same period. Critics of planned economies argue that planners cannot detect consumer preferences, shortages and surpluses with sufficient accuracy and therefore cannot efficiently co-ordinate production (in

3400-452: The most localized level of production. Moreover, organizations that utilize modularity in their production processes may distribute problem solving and decision making. The planning structure of a decentralized planned economy is generally based on a consumers council and producer council (or jointly, a distributive cooperative) which is sometimes called a consumers' cooperative . Producers and consumers, or their representatives, negotiate

3468-478: The planned system of regular five-year plans started in 1928. Leon Trotsky was one of the earliest proponents of economic planning during the NEP period. Trotsky argued that specialization , the concentration of production and the use of planning could "raise in the near future the coefficient of industrial growth not only two, but even three times higher than the pre-war rate of 6% and, perhaps, even higher". According to historian Sheila Fitzpatrick ,

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3536-399: The planning system were the Modernization Commissions. These commissions were a means of communicating the planners’ ideas to those responsible in the economy, and through them to the general public: but they were also a source of information for the planners. More than a thousand people worked on the eighteen Modernization Commissions in 1946 The background and expertise of commission members

3604-528: The quality and quantity of what is to be produced. This structure is central to guild socialism , participatory economics and the economic theories related to anarchism . Some decentralized participation in economic planning has been implemented in various regions and states in India , most notably in Kerala . Local level planning agencies assess the needs of people who are able to give their direct input through

3672-552: The resources that were then expected to be available, starting with six crucial sectors: coal mining, steel, electricity, rail transport, cement, and farm machinery. Later oil, chemicals, fertilizers, synthetic fertilizers, synthetic fibres, shipbuilding and other sectors were added. While targets were set, there was no enforcement mechanism. However, three of the six basic industries had been nationalized: coal, electricity and rail transport. The remaining three were fairly well concentrated and implicitly threatened with nationalization. In

3740-465: The scholarly consensus was that Stalin appropriated the position of the Left Opposition on such matters as industrialisation and collectivisation . After World War II (1939–1945) France and Great Britain practiced dirigisme – government direction of the economy through non-coercive means. The Swedish government planned public-housing models in a similar fashion as urban planning in

3808-445: The specific type of planning mechanism employed. Socialist states based on the Soviet model have used central planning, although a minority such as the former Socialist Federal Republic of Yugoslavia have adopted some degree of market socialism . Market abolitionist socialism replaces factor markets with direct calculation as the means to coordinate the activities of the various socially owned economic enterprises that make up

3876-409: The steel industry, capital for expansion was provided from government sources on condition of mergers and restructuring. The Plan had less direct impact on sectors outside the six basic industries and, for example, it never tried in any direct way to hold back sectors such as oil, pharmaceuticals, and cars, which spontaneously found markets and capital to grow fast. The central feature or "kingpins" of

3944-561: The truth is that it survived as long as it did only because it was propped up by unprecedented totalitarian political power. Planned economies contrast with command economies in that a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc." whereas a command economy necessarily has substantial public ownership of industry while also having this type of regulation. In command economies, important allocation decisions are made by government authorities and are imposed by law. This

4012-584: The wake of a continuing existing World War I war-economy as well as other policies, known as war communism (1918–1921), shaped to the requirements of the Russian Civil War of 1917–1923. These policies began their formal consolidation under an official organ of government in 1921, when the Soviet government founded Gosplan . However, the period of the New Economic Policy ( c.  1921 to c.  1928 ) intervened before

4080-433: Was built for real-time observation and management of the overall economy. The prototype-stage of the project showed promise when it was used to redirect supplies around a trucker's strike, but after CIA-backed Augusto Pinochet led a coup in 1973 that established a military dictatorship under his rule the program was abolished and Pinochet moved Chile towards a more liberalized market economy . In their book Towards

4148-479: Was central to the Monnet Plan. The Plan envisaged investing some 24% of national income per year. As the economy’s output was already low, to limit consumption cuts, France aimed to secure loans to finance capital and equipment imports. In March 1946, a French delegation went to Washington with the first publication of the French planning council: Statistical Review of the Economic and Financial Situation of France at

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4216-481: Was characteristic of the former Soviet Union and Eastern Bloc before most of these countries converted to market economies. This highlights the central role of hierarchical administration and public ownership of production in guiding the allocation of resources in these economic systems. In the Hellenistic and post-Hellenistic world, "compulsory state planning was the most characteristic trade condition for

4284-537: Was important because, for example, the Manpower Commission’s proposals were adopted, which allowed the longer, forty-eight-hour week to eventually become the norm. This could not have been done if it had not been accepted by the workforce, and was a crucial factor in French recovery. Monnet was determined that the General Planning Commission be attached to the Prime Minister’s office rather than under one of

4352-608: Was intentionally diverse. For example, the Electricity Commission had 22 members, including six heads of firms, three trade unionists, two white-collar workers, five experts, and four civil servants. A key aspect of the Plan was that it was widely accepted – it was approved by the Communist and Christian trade unions, by farm unions and by industrialists of the National Council of French Employers. This

4420-401: Was less than the requested $ 3 billion over three years, but was adequate for the Plan to be launched, and the Modernization and Re-equipment Plan was submitted to the government on 27 November 1946. The Monnet Plan had called for short term austerity measures, but it had promised a rapid rise in consumption. However, in 1947, due to inflation, drought, and the worst harvest in 150 years, France

4488-580: Was small, and never numbered more than thirty-five senior officials. However, the group was "probably the most creative team in Paris" and included many who would go on to other roles in the French and European government or administration, including future French Prime Minister Felix Gaillard ; Robert Marjolin , later one of the founders of the European Common Market ; Etienne Hirsch ; Pierre Uri ; and Paul Delouvrier . Capital investment

4556-606: Was succeeded by the Center for Strategic Analysis , which was replaced in 2013 by France Stratégie . Planned economy A planned economy is a type of economic system where investment , production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized , decentralized , participatory or Soviet-type forms of economic planning . The level of centralization or decentralization in decision-making and participation depends on

4624-479: Was threatened with the loss of even basic essentials. The grim postwar situation in Europe was observed by U.S. policymakers, and on June 5, 1947 Secretary of State George Marshall said that "Europe’s requirements for the next three or four years of foreign food and other essential products – principally from America – are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of

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