Formal similarity and real distinction between capitalist and socialist economic planning

Abstract

The paper departs from a broad definition of economic planning and presents a simple formalization of the law of value to develop a paralleled abstract and concrete analysis in comparative economic systems. Using the dialectical method to overcome superficial dichotomies involving structural processes of economies labeled as either capitalist or socialist, it argues that both economies can develop a form of planning that is at the same time formally similar to and real distinct from each other. By proposing this axis of separation, the paper explains that much of the confusion in the study of comparative economic systems in the 21st century stems from adopting a rigid perspective that fails to embrace the flexibility necessary to connect various levels of analysis, from abstract (theory) to concrete (empirics). Taking the current geopolitical systems under the influence of the United States and China as exemplary cases for the idealized separation between capitalism and socialism, it is shown in which way they can be considered simultaneously equal and different.