Comments by "Megakoresh" (@gigakoresh) on "Ed's Auto Reviews" channel.

  1. Several small inaccuracies as pointed in the comments but overall correct. One important point though is inaccurate - planned economy didn't collapse because it was slow, in fact it was much faster at making changes than market economy because macroeconomic sums could be directed at specific problems in a single party decision. It collapsed because of maths - as economy grows, it exponentially increases in complexity. In very simplified terms - to make a drill you need to plan for metalworks and motors. Drill lets you make car. Now you need to plan for metalworks and motors for the drill, but also the same thing for the car, and in addition you need to plan for fuel, electronics, roads, glass, seat fabric, etc. Cars let people travel around the country more so now you need to plan for hotels, gas stations, radio coverage on the road, parking lots. And so on. With each level the amount of complexity grows exponentially, requiring more people and resources. In a market economy each company plans only things that concern their own production, and they let the free market align these plans between the decoupled market actors by establishing a price. In a planned economy, everything has to be centrally planned, and while it can allow for huge and fast leaps in development like the "Khrushyovka" buildings or space-faring achievements of Sputnik 1 or Gagarin's journey to space, as the economy develops, the planning apparatus is unable to keep up and so the quality of the plan starts to progressively degrade, as shortcuts are taken to implement things. Add to that the awful totalitarian regime where failure to meet objectives could often be punished with death or life sentence, and we have a system that is not only unable to maintain the pace of growth, but is also encouraged to hide that fact from the higher-ups, cutting the feedback loop that might have allowed for improvement of the plan. Do that for a few decades and you get a collapsed country. Cars are an excellent, almost textbook example of how planned economy fails because it's one of the most advanced industries, incorporating almost everything else that a country's industrial machine is capable of producing. They can often be used to tell whether an economy is healthy and if it's going in the right direction.
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