Planned Economy: Practicality and approach

Over 100 years ago, Western countries moved from traditional economics to laissez faire economics. They moved from a Feudal System into the Modern Capitalist System. The capitalist system promotes free trade, fiscal policy, floating exchange rates and privatisation of state enterprise.

The Working class are subjected to low wages and poor working conditions being maintained because “…the costs of production of labour consist of precisely the quantity of means of subsistence necessary to enable the worker to continue working, and to prevent the working class from dying out” Friederich Engels.  Privatisation of state enterprise including: the selling off of the transport sector meaning mass redundancies and decline to the extent of transport network, the selling off of lifeline services such as the NHS to private corporation and the list goes on. The privatisation of these services will mean the poor and the vulnerable will suffer the cost of paying for treatment and the destruction of their social liberty and mobility.



Since the 1960’s Cuba has practised a Planned Economy: including the direct allocation of resources and jobs and largely state and public ownership. This system prevents the subordination of workers, is more efficient and egalitarian. Nationalised enterprise has resulted in Cuban people being given free education, free healthcare, ration cards (guaranteeing at least one meal a day), low cost housing and transport. Statistically according to U.N reports, Cuba boasts the 2nd highest literacy rate in the world, 100% of the population in education and a heavily advanced healthcare system. According to the WorldBank.org only 1.6% of Cubans are unemployed, only 1.5% of the population are below the poverty line. Despite the dissolution of the Soviet Union, which greatly reduced the amount of funding towards Cuban services, Cuba has responded to the lack of finances by allowing cooperatives and self-employment. Other countries practising similar economies are hard to find although countries like Venezuela, Belarus and China have similar plans.

Planned economies are the most efficient and practical and have promoted social progression/development. In planned economies not only is all the money recycled through the state but also allows doors to be opened to exporting, so while the country can benefit from export sales it cannot lose money from importing or private corporations withdrawing profit. The total profit benefits the nation as a whole. Although there is always room for social/economic development, Planned Economies do not ignore the people but rather the idea of profiteering for individuals.

Eli