Central economic planning
A system of top-down authoritarian decision making. Central economic planning was the theoretical system of resource allocation in soviet and socialist forms of government in which private property was abolished and State control of the means of production was enforced.
The basic theory of Central economic planning was that a committee of experts could much more rationally and efficiently direct a country's resources than the chaotic decentralized actions of millions of individuals through the market mechanism. Central planners would set prices, production targets and allocate resources and personnel to strategic industries and priorities.
Criticisms
Early critics of Central economic planning, especially Ludwig von Mises, pointed out the Economic calculation problem in the absence of market prices. Others criticisms include the difficulty of engineering and planning in complex systems with emergent properties (Friedrich Hayek) and problems of incentives and regulatory capture (public choice theory).
