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Democratic planned economy model 1
Alias: planecon1
Abstraction-page: Political economic systems
ADC: Jorbol20080904
Version: 1.00
Status: under construction; if you want to add or edit something look at and use the change-log.
Theories and assumptions
Assumptions
- a closed economic system.
Goals
The main advantage of a planned economy is that the economy is totally designed and foreseen. That way negative environmental or social effects can be anticipated and avoided, whereas in a market-economy some negative effects are not intrinsically controlled (unless additional policies are overlayed). Another advantage is that design-improvements can be shared immediately, instead of being hidden or protected, as is usual and 'rational' in the market-model.
A negative effect is a loss of personal freedom like the ability to start up individual activities. This problem must be solved somehow to make the model feasable.
Main model
Introduction
With the downfall of the communist system of the Soviet Union (SU), many people have declared the planned economy as an obsolete system that has no merit. And under the conditions of the soviet union the planned economy (PE) failed indeed on a lot of aspects (allthough I asume there must also have been positive effects). The main condition of the SU was that is was not democratic, but dictatorial. And dictatorial systems tend to be inefficient, because the dictatorship is often only fixated on some goals, thereby neglecting many others.
So this model departs from a democratic pre-condition.
A second condition is that in the current times computers can come to help in calculating complex processes. This might also improve the feasability of a PE in current days.
Basic model
One produces to supply products to consumers. So all work is done to fulfill the needs of the consumers. So firstly one must model and aggregate the consumption of individuals. Going out from a consumer one must see how much he consumes in -let's say- a month. Something like this, in a very rough sketch:
n1 kilos of food
n2 kilos of drink
n3 numbers of clothing
n4 square meters of housing and garden
n5 usage-hours of devices
Every consumer gets vouchers to claim these consumptional rights. It might be a good idea to make these vouchers tradable so that personal preferences can be accomodated.
Above individual consumption-numbers are summed up for the whole population, giving numbers for the national consumption. The national consumption is the starting point for the production-planning.
The production can be represented as a great number of conversion-processes. Exemplarly, the bread baking process has the following elements:
Monthly inputs:
- x1 kilos of flower
- x2 one oven
- x3 liters of fuel
- x4 square meters of building
- x5 employees
- x6 kwh elektricity
- x7 liters of water
Monthly outputs:
- y1 breads (800 gram)
- y2 pies
Like this process one can describe them for grain-farming, bread-distribution and so on. Next one can link together all processes in a (huge) economic network. To reach the desired output (national consumption) one can adjust certain input-variables and recalculate the output. This means for example that one produce a lot of grain, but this lessens the possibility of cattle-farming and thus meat-output. By optimizing inputs and processes one can get the desired output (hopefully).
Change-log
- jorbol20080905 - version 1.00 completed.
- Jorbol researchable issues:
- assessing the different sectors (agriculture, industry etc) on their fittingness for planned economy resp. market-economy.
- scaling-questions; what is the optimal scale to plan; may be dependent on the sector
- making space for individual freedom; can it be done somehow?
- how is democracy integrated in a planned economy?
- how can one migrate from a market-economy to a planned economy?
- dropping the assumption of a closed system: how can a PE be embedded in capitalist world?
