The Fundamental Problem of Socialist Planning

W E sometimes •wrongly, without the necessary bases, blame gosplans, ministries and supply-marketing organisations for annoying misunderstandings, dispropor-tions, losses in production and the violation of the interests of consumers. When one encounters so many people making mistakes, it is necessary to look for the reason not only in their individual qualities, but in that system, or more precisely in that 'theory', which conceives of planning as the management from the centre of an all-embracing extremely detailed nomenclature of commodities. E. G. LIBEBMAN2 (Liberman, 1970, p. 74) The problem with which this paper is concerned, is as follows. According to Marxist-Leninist theory (as set out in scattered observations by Marx and Engels and as made explicit by Kautsky, Lenin, Bukharin, and Preo-brazhensky, and Kritsman) the way to ensure that a socialist economy exhibits superior rationality to the anarchy of production prevalent under capitalism is for a national economic plan to be drawn up and subsequently implemented. Each person, guided by the internalized desire to achieve social rationality, will strive to carry it out in an efficient way. The forces of production will be organized rationally. In the state socialist countries national economic plans are in fact drawn up. Nevertheless, it is well known that what the U.N. publications refer to as 'the centrally planned economies ' are characterized by wide-spread waste and inefficiency. This has been well described in an exten-sive literature (Berliner, 1957, 1976; Kornai, 1959). What accounts for this dialectical disunity of theory and practice? The purpose of this paper is to argue that the fundamental cause is a theoretical one, the inadequacy of the theory of decision making implicit in the Marxist-Leninist theory'of planning. The theory of decision making implicit in the Marxist-Leninist theory of planning is inadequate because it ignores the fundamental factors of partial ignorance,3 inadequate techniques for data processing, and complexity.