A planned economy is a type of economic system. The purpose of this structure is to meet the needs of the population. At the same time, everyone works according to their abilities. And they get everything according to their needs.
A planned economy is mainly characterized by the presence of one single owner - the state. The monopolist collects marketing information. The state is engaged in planning and approval of obligations.
With pre-known volumes of consumption and clearly executed installations, overproduction is excluded. Due to the fact that the manufacturer is not experiencing commercial interest, there is no aggressive advertising.
A planned economy implies that the education of society is carried out in the spirit of mutual assistance. And egoism is considered the main problem of capitalism.
With unemployment, the population seeks to work. However, there are no jobs . The planned economy is successfully coping with the problem of unemployment.
Pros and cons of the system
According to many experts, the shortcomings of the structure continue its advantages.
For example, a planned economy helped to eliminate unemployment. However, after a while parasitism appeared. In this case, people were provided with jobs, but jobs were avoided. According to experts, in a society that is guided by the principle of "to each according to his needs," such a result is inevitable. In this regard, a planned economy requires a powerful structure of forced labor.
Of course, coercion to anything always meets with resistance. This, in turn, creates the need to create an apparatus designed to deal with the dissatisfied. This, of course, causes protests.
The most efficiently planned economy is embodied by a rigid dictatorship. This political system, in addition, successfully eliminates resistance and fights complaints.
In order to keep such a system, massive propaganda is needed. It should be noted that in a planned economy there is practically no advertising of goods. But there is propaganda of the existing political system and advertising of labor.
The head of all production is the state. This fact is considered by many experts to be a virtue of a planned economy, since the monopolist has a complete understanding of what is happening.
Enormous volumes of information flock from all over the state to one analytical center. It organizes data and planning. To implement this (without the use of advanced technologies) it is necessary to involve a huge number of people.
Employees are not involved in production. They know the papers. Thus, in each section of the information network a large number of employees accumulate. As a result, the human factor reaches the size of a disaster.
Information comes to the central office is not entirely reliable. Repeatedly transmitted over the "damaged telephone", it changes, is distorted. As a result, the center begins to make not quite adequate decisions. They, in turn, are also repeatedly transmitted and also distorted. As a result, the falsity of the decisions made hinders their implementation.
Over time, employees involved in "paper affairs" are drawn up in a particular class of society that is hostile to other citizens. Despite the fact that bureaucrats are not involved in production, they begin to represent the true center of power. Without their permission it is impossible to solve a single problem. To obtain sanction, citizens begin to apply bribes. As a result, corruption becomes an integral element of the bureaucratic machine.
According to many experts, the main disadvantage in a planned economy is the lack of natural motivation for productive and quality work. The employee does not understand why he needs to work better and more if he still gets a salary. In such conditions, when payment is not distributed according to merit, but given the needs, no one wants to work.