China as a Planned Economy

I’ve been saying this for a long time now.

Dissecting the Concept of Planning

After years of experimenting with different types of planning from 1949 to 1979, the Chinese Communists finally settled down for Market Socialism-based Planning. Yes sir, p-l-a-n-n-i-n-g.
They reclassified their economy as being in the primary stage of Socialism, and then went on to chalk out a 50-year plan. Yes sir, p-l-a-n. Under this fifty-year plan, they have taken up the all round development of one region every ten years. Right now it is Tibet and the South-western provinces.
The result is announced on 15-08-2014 : Chinese Railways has reached the border of Sikkim, will very soon reach the border of Arunachal Pradesh, and will also eventually connect with the Pakistani Railways through Aksai Chin and POK.
That is “communism” for those who care. All about careful, methodical planning which implies two basic things: selection of goals and mobilization of resources for achieving those goals.
Now let us see India. We had a sham Planning Commission at least after 1991, when Manmohan Singh as the then Finance Minister started talking of “Economic Reforms”. Vajpayee started talking of “Shining India” even as he too continued with a sham Planning Commission. Manmohan Singh, after becoming PM, actually appointed Montek Singh Ahluwalia (a self-confessed neoliberal, ergo: anti-planning) as the Chairman of the Planning Commission, and practically destroyed the idea of planning.
And now comes along Narendra Modi, who declares from the ramparts of the Red Fort that planning commission is no longer necessary (because as per the neoliberal economic ideology, planning itself is not necessary). In order to mute his critics, he declares that he will set up a new institution for generating new ideas. His government’s recent budget for railways talks of “FDI in Railways” as the panacea for railways development. The Foreign Direct Investment in Railways is and will always be about high-speed trains between Mumbai and Ahmedabad, or about air-conditioned double-decker trains between Mumbai and Goa, or about Palaces on Wheels. Never about Sikkim, Arunachal Pradesh or Ladakh.
Today, when from Kashmir, Telangana, Chattisgarh, or any other part of India for that matter, when we hear complaints about Government of India, the main burden of the song is about lack of development, leading to frustration, despondency, and militancy.
During his election campaign, Modi precisely cashed in on this lack of development. But the neoliberal that he is, he thinks that deliverance lies through the path of inviting FDI in every field : “Come, Make in India”.
Simultaneously, he announces the jettisoning of the concept of Planning.
Our corporate press hails it as a burial of Nehruvian Anachronisms.
Our “secular-liberal” thinkers also start by sighing as to how Planning had practically ceased in India long ago, and as to how we have to start looking out for “new”, “latest” ideas in development economics.
Those who blindly support Modi, do not wish to tolerate any critic of Modi’s ideas.
The million-rupee fact is that by Planning, the Chinese Railways have reached Sikkim and will soon reach Arunachal Pradesh and Ladakh. The Indian Railways with 67 years of sham planning are nowhere near Sikkim, Arunachal and Ladakh.
And with the jettisoning of the very concept of planning coupled with the wholehearted embrace of FDI, the Indian Railways will never reach there. And perchance, if some Foreign Direct Investor does construct railways in those places, then he would do it to build up his pockets – not to build up India. And more likely than not, the very presence of such FDI predators in those areas would only lead to further alienation, further disaffection, and further militancy.
The concept of Planning was not invented by Nehru. It was invented by the Soviet Socialists. Hence rejection of the concept of planning is hardly an act of anti-Nehruvianism. It is an act of anti-Socialism. And, considering that Socialism is a Basic Feature of India’s Constitution, it is a serious violation of the Constitution and repudiation of the oath to defend the Constitution.

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0 thoughts on “China as a Planned Economy”

  1. I can confirm he’s been saying China is more socialist than we think for a long time, at least since about 2011/2012 that I remember. Planned economy, lots of state owned enterprises, key sectors state owned in particular- ‘the towering heights’, including banking.

    1. That can also sound like a fascist type economy too, as fascism is also a state-directed economy as well, there to serve the interests of the state, & a lot of times with a lot of social welfare initiatives as well,something current PRC is sorely lacking. Like Fascism, Market Socialism based economics also have private enterprises & state-sponsored national champions as well.

  2. Dear Robert
    Having the state build infrastructure, provide credit and set the general direction of the economy is a good idea. Not so good is to have the state take control of all production. It is fine if the state builds railroads, power plants and schools, but planning goes to far when the state also owns shoe factories, clothing stores or breweries.
    Production of a good or service should be left to the market if 3 criteria are met.
    1 – there can be competition among producers
    2 – consumers have an equal need for the service or product
    3 – the product or service benefits the individual consumer exclusively or primarily
    For instance, there can be competition among shoe manufacturers, everybody has roughly the same need for footwear and a pair of shoes benefits primarily the one who owns. There is therefore good reason to leave shoe production to the market.
    Health care is different. There can be competition among health care providers, but the need for health care varies enormously among individuals, and good health does not only benefit the healthy individual. We all become better off if we live in a country where most people are healthy most of the time. That is 2 good reasons for having the government play a large role in health care.
    China has a very unusual economy in that household consumption accounts for less than 35% of GDP. In most countries it is over 60%. The Chinese may be investing too much. Some people argue that China’s economy is seriously unbalanced.
    Regards. James

  3. China is not socialist nor capitalist but a modern neo-Confucius economy. China did has certain socialist feature but that is due to the teaching of Confucius that the state must be good to people.
    When operating in a good manner, the Chinese system are quite socialist. It also have some very unsocialist characteristic for example, China will not support able bodied man who do not want to work. Under East Asian system, such man is considered a disgrace. When China acquire more health, she will probably have universal healthcare, free schooling and pension for old. But she will also have top down system, crushing of dissent system, public sector dominant system…etc.
    This is the form of government more Chinese is accustomed with for 2300 years.
    Similarly Modi is not a capitalist but a Hindutva economy. Hindutva economy is to-each-his-own-ism. It is strong versus the weak system. It is caste system in the form of capitalism.
    Eventually, the capitalist will be yet another caste. India do not have strong central government in history. So the current democratic form of government with a rather weak central government model Indian society quite well.
    Despite all the negative thing about India, I expect her to have limited for of universal healthcare. The Hindu, never mind obsessed with caste system, somehow believe karma of doing good.

    1. very interesting way of putting it. I completely agree with you. the kind of economy is determine by the kind of culture the country has. Max Weber in his book “Protestant ethics and the spirit of capitalism” explained that capitalism was successful because of protestant ethics.
      But China and India don’t have protestant ethics, they haven Confucian ethics and Hindu ethics. Therefore they following different set of capitalism.
      However I don’t agree with is “China did has certain socialist feature but that is due to the teaching of Confucius that the state must be good to people.” No, teaching of Confucius HAS nothing to do with be good to the people. This is actually result of western influence, probably Marxism. The most well preserved Confucian society today is definitely North Korea.
      I think China is the way it is today because it is a civilizational blend. It has a lot of confucianism such as authoritarian, limitation on free press, it also learned a lot from the West.

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