TNAG-0531-FCO40-626-Application-of-International-Labour-Convention-to-Hong-Kong-1975 — Page 143

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It is important to note, however, that the advance of economic planning is not necessarily linked to any particular political or social ideology; the COMECA denominator which seens to be behind the advance of economic planning is a strong central government faced with a period of stress which makes it imperative to use with care all the available resources of the country.

The first example of a planned economy was apparently provided by Rathenau in Germany during the First World War and it is suggested by some authors that Lenin's approach to the problem of planning in Soviet Russia was consciously based on this precedent. While being the first country to establish a system of national economic planning in peacetime with its five-year plans initiated in 1928, the Soviet Union, however, was not the only country to adopt economic plans during the period between the two wars;

we are told that the Governments of Germany and Italy launched their four-year plans in 1933. The movement was not limited to European countries only, and it may be noted that, in 1934, the Turkish Government adopted a five-year Flan for the industrialisation of the country while, in the same year, a first programme was published of planned economic development for India, at this time still under the British administration,!

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the other factors which contributed to the growing acceptance of the idea of economic planning was the development

of contemporary economic theories, particularly those of Keynes, attempting to find remedies against the evil of business cycles. The great economic depression of the Western world in the early thirties demonstrated that the "laissez-faire" theory of economics was manifestly wrong and that something had to be done to prevent the repetition of such disasters. Last, but not least, the way of economic planning was paved also by the big industrial enterprises, developing planning techniques as part of their commercial procedures.

precedent

Economic plans of the period after the Second World War found their in the wartime effort in Great Britain where the Economic Section of the Cabinet Office prepared estimates of the national product and some of its components for the purpose of the better organisation of war production. Immediately after the war the Governments of the Netherlands, Norway and France followed the British example, prompted to do so by the need for speedy post-war reconstruction.2

This trend was further reinforced by the creation of international organisations for the purpose of improving economic co-operation. The OECD was established in Paris in 1948 and practically imposed certain forms of economic plans on its member countries. Similarly, the creation of several European Economic Communities obliged certain of the member countries to take steps in this direction.

In the course of the last decade it became apparent, however, that economic plans, no matter how perfect they may be, are not a panacea for the social evils of our time. The assumption that a simple growth of the national product would be automatically followed by an improvement in the working and living conditions of the or in the population did not prove to be right either in the industrial countries developing countries for reasons which we shall examine later.3

1 The information given in this section is based on the data quoted by Charles Madge in his introduction to the chapter on Social Planning, in The International Encyclopaedia of the Social Sciences.

2 Cf. Jan Tinbergen, the chapter on Economic Planning in The International Encyclopaedia of the Social Sciences.

3 The experience of socialist countries with centrally planned economies, which is not covered by this article, has clearly been different from that of countries with market economies. While it is a generally accepted view in the socialist countries that the social needs of the population can only be satisfied by a rapid development of

the national economy, official theory considers nevertheless as the primary objective of the plan a

growth of income and wages and an improvement in the social well-being of the population to which the secondary objectives such as the growth of the national income and of industrial production are only instrumental. This concept thus makes it possible to develop an integrated approach to planning dealing both with economic and social objectives.

systematic

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