Central Economic Planning

Is wise central planning a substitute for the chaos of the marketplace? The twentieth century saw a multitude of experiments, and a multitude of colossal failures. It's mostly remembered how spectacularly those socialist and communist experiments failed in providing economic growth and a better standard of living for the people, but it's sometimes forgotten that they weren't total failures. In particular, those economies seem at least moderately effective for focussing on a single overriding goal, like military power.

Toward the end of the twentieth century, new models of the centrally planned economy emerged in Asia. These were based on some variation of state capitalism - a fundamentally capitalist system for the organization of production, but with a heavy dose of direction and management by the state. The modern state has an extensive set of tools for guiding and directing the work of businesses even when it isn't directly managing the economy.

It ought to bother advocates of democratic capitalism at least a bit that the world's most successful economy (in terms of progress) over the last thirty years is also one of the least democratic and most rigidly state controlled, China.

The United States, the world's largest and richest economy, has by contrast seen a pretty tough thirty years, culminating in the catastropic blunders of Bush and Greenspan. The fundamental question is whether a relatively free economy led by politicians elected by citizens who are neither very smart nor well-informed can compete with a slightly free one managed by unaccountable but seemingly cool-headed bureaucrats.