What were the drawbacks of central planning in the former Soviet Union...Plz help ASAP LUV tatiana
It was political, as opposed to practical.
It relied on false data, provided politically correct.
It failed to allow for market forces, producing much that was not needed.
It failed to allow needed industrial infrastructure to be built.
To understand the drawbacks of central planning in the former Soviet Union, we need to take a closer look at how central planning worked and the specific challenges it brought. Central planning refers to the economic system where the government controls and directs all aspects of the economy, including production, distribution, and pricing.
1. Political nature: Central planning in the Soviet Union was highly influenced by political considerations rather than economic ones. This means that economic decisions were often driven by ideological and political goals rather than practical considerations. This led to inefficiencies and resources being allocated based on political priorities rather than what was economically rational.
2. False data: A key problem with central planning in the Soviet Union was the reliance on inaccurate and incomplete data. Economic planning requires accurate information about consumer demand, production capacities, and resource availability. However, due to limitations in data collection and the lack of transparency, the Soviet Union often had to work with flawed data. This resulted in misallocation of resources, overproduction of certain goods, shortages of others, and an inefficient allocation of resources.
3. Lack of market forces: Central planning did not allow for the natural functioning of market forces, such as supply and demand dynamics, competition, and price mechanisms. Without these market forces, the Soviet economy struggled to efficiently allocate resources. The absence of price signals meant that the supply and demand of goods could not be accurately reflected, leading to surpluses and shortages.
4. Inadequate industrial infrastructure: Central planning failed to adequately address the need for appropriate infrastructure to support industrial development. The focus on heavy industries, such as steel and machinery, often came at the expense of other critical sectors like consumer goods and agriculture. As a result, the Soviet economy faced difficulties in providing essential goods and services to its population.
These drawbacks of central planning in the former Soviet Union contributed to systemic inefficiencies, economic stagnation, and ultimately the collapse of the Soviet economy. It is important to note that this is a simplified explanation and the topic can be further explored for a more comprehensive understanding.