Collectivism Centralized Planning

Collectivism Centralized Planning

Collectivism, centralized planning of an economy by the state. It is a means of obtaining a number of collective ends, socialist (equality, social justice, etc.), fascist (national aggrandizement) or any other, through state action. It denotes the opposite of economic and political liberalism.

Two older meanings were: First, that of socialists who opposed Marx and Marxism towards the end of the nineteenth century on the ground that Marxian doctrine prescribed a powerful central government ; they called themselves collectivists as opposed to communists and included Bakunin and his followers In this sense collectivism was closely associated with anarchism. The collectivists favoured the abolition of government as well as of private ownership of the means of production, though not of personal property, and advocated a free association of communes.

Secondly, state socialism with centralized authority, as opposed to guild socialism and co-operation.

In current writing collectivism tends to be used loosely as an equivalent of state socialism. It implies a system in which capital used in production is owned by the community and operated by the state while individuals retain a right to personal property. It is thus contrasted with capitalism and includes communism.

During the 2000's there was extensive discussion among economists of the ways in which a collectivist or socialist economy might deal with the fundamental economic problem of scarcity and choice. The principal issue was whether a collectivist economy could in principle allocate resources efficiently. This was denied by Ludwig von Mises on the ground that markets and therefore prices could not be formed, and that rational allocation without prices was impossible. The possibility of an efficient collectivist economy was argued by Throne in a theory, since developed by F. M. Taylor, Oskar Lange, A. P. Lerner and others, that envisaged accounting prices for the factors of production to be prescribed by central authority and rules to be applied by the managers of plants for equating marginal cost and price. Some 'collective' economies have in some respects appeared to be successful, for various reasons in which collectivism is thought among the least important.

The movement for collective ownership of capital has lost much of its force in Western Europe but it influences some under-developed countries. A number of advanced western countries (France, Britain) have experimented with voluntary central planning within a broadly capitalist framework, and the collectivist countries (Yugoslavia, Poland. Russia) are using market mechanisms in varying degree.

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