Comment by naasking
9 hours ago
I don't see how that could be considered a planned economy, you're describing individuals creating startups of their own free choice and the government backing them with no strings. Individual choices are driving economic progress.
A planned economy would be some government committee deciding what specific startups and how many of them should be started up in any give year, and no one else can create a startup.
> don't see how that could be considered a planned economy, you're describing individuals creating startups of their own free choice and the government backing them with no strings. Individual choices are driving economic progress.
You have it backwards, the government decides which startups (by industry) will be funded and the individuals get drawn to those industries. There is a private VC market in China, but it's a rounding error compared to state investment.
The AI boom in China is directly from Xi himself setting it as a national priority. That means you will keep getting money to develop AI and AI adjacent tech regardless of how inefficient you are. There are no investors nagging for a return or wanting a path to profit.
This is why there are solar panel factories in China pumping out panels without slowing down, even though the market is saturated and they are losing money on each panel. You don't stop or slow until the leader says to.
Money (subsidies) and laws are exactly how economies are planned. When you've got scale like China, USA, EU, you can throw money at things you want to exist and there will be citizens who will just do those things because of the incentive.
I'm not sure "economic incentives" are what most people classify as a "planned economy", unless you want to take the broadest, most expansive possible understanding of that term. All Western nations would have planned economies under such a definition given the existence of tax incentives and such.
"A planned economy would be some government committee deciding what specific startups and how many of them should be started up in any give year, and no one else can create a startup."
no it would not be...where is this definition from?
That's how planned economies worked under "proper" communism in the Soviet Union or pre-Deng and how we ended up with stories about factories only baking giant screws to meet weight quotas to the switch to tiny screws to meet quantity quotas while no medium-sized screws people actually needed for produced.
Two distinct words night be useful to distinguish between planned without any market feedback and heavy industrial policy like we see in China now. In fact the CCP recently voiced their impatience with Cuba refusing to introduce market-oriented reforms.
fair enough —- I need to read up more on the usage, but I find it surprising for “planned economy” to imply the former