hole national economy is a complex and burdensome task. This type of planning requires the “knowledge about the economic capacity, as determined by production technology and resource constraints, and to develop a set of output targets that relate to that capacity.”(103). In the Soviet planning the Gosplan was limited to a relatively small number of commodities, the complex production functions were simplified (such as linear relationships that did not change with scale of output), and the planning process did not begin over each year.What are some of the strengths of Planned economy? Well as we saw in class on the graph, planned economy in theory is more efficient since the outputs of particular goods are not guessed as it is in market economy but planned, so when a manufacture plant produces a good it does not over produces it because it know how much the other plant will produce. The problem is to know how to implement this in to market economy. If we look at France’s economic system we can see that the government has considerable control over the industrial sector both through planning and regulatory activities and through direct state ownership, although a modest privatization program has been implemented. France’s government policy stresses investment promotion and maintenance of fiscal and monetary discipline. So, we see that the planning does work, but it’s implemented into the system differently then in the Soviet Union’s economy. Control over and planning for certain industries is a plus for a market economy, but planning for the whole economic structure is impossible. France is only one example of a free-market country that uses planning, one can see some kind of government planning in all industrialized countries. Look at USA’s monetary policies. The U.S. Federal Reserve Board, USA’s version of Gosbank, could make financial markets rise or fall on little more than an ...
