I think the parent meant it in a more general sense. Apple doesn't single-handedly produce the iPhone, it takes the coordination of millions of people, most of whom have no contact with Apple whatsoever: those who design oil drilling equipment, those who build it, those who use oil drilling equipment, those who then extract the oil, transport it, refine it, transport it, turn it into plastic bits for the iphone, transport them, put everything together, transport it. And there's a chain like that for every thing in the phone (for some items, such as CPUs the chain is far more complex). There is no top-down command and control, and I doubt it's possible. The only reason coordination on such a massive scale works is because of the price mechanism.

I don't think the coordination is the problem, frankly, it seems like an ideological red herring (specifically, I don't think it really matters whether you have oligopolistic or free market prices). "Socialist" countries had a kind of "internal market", although it tended to be very regulated. In particular, price mechanism was present, so the information was available to decision makers. I think there were two other causes:

1. The power structure, on the state level and "business" level, not accountable enough to the people it should serve - no democracy, no consumer choice. The latter was somewhat reduced in the businesses that exported (usually to the third world).

2. Tendency of the regulators to "cut down" the expenses and designating single company to produce certain thing as a means to save resources. This caused huge delays in production as the individual delays accumulated, and in fact caused waste. (I think it's actually redundancy, not efficiency per se, of free markets that is one of the causes of their resulting efficiency.)

Democracy and being able to start independent business (which is not the same as free market or capitalism!) seem to be the two main advantages of the West compared to the East. But you can also see that both problems plague large enterprises in the West, yet despite that they are workhorses of the economy. You can also see that many very successful countries have oligopolies, state-owned enterprises, strong unions, and lots of regulation in general.

I just decided to recheck the thread because I thought that parent asked something yet different, namely, how could innovation happen in collectivist system (whatever that is). I assure you there was plenty of innovation going on in the "socialist" countries; the problem was getting things approved, tested, and produced by the people who decided about resources. Similar challenges are faced by innovators at the bottom in a large corporation.

The Soviet Union built some fairly complex machines too, for example buran the Russian space shuttle, nuclear power plants, large airplanes, submarines etc. I don't think these are significantly less complex than an iPhone. Likely more. Now you could argue they did it less frequently or less efficient and not really benefitting the average consumer in many cases. And that would be true. But there is no denying that a top down economy did those things.

Soviet Union routinely failed to sell its nuclear plants, airliners and less complex stuff.

Soviet Union was able to produce something that worked, but it was all below price-quality curve. I.e. you could buy same quality product from Western corporations for less money; or you could buy better quality product for same money. Western corporations also had better selection.

So only buyers were in communist bloc, and what USSR end up exporting is oil and gas.

And that'll happen nine times out of ten, since socialist economies are not optimal.

I don't know why we're calling the USSR socialist; is it because they said they were socialist? There are plenty of dictatorial regimes that call themselves democratic republics, too. The USSR was structured like one massive corporation: Everything was owned by the government and the government bureaucracy functioned much like a corporate bureaucracy.

Libertarian socialists sometimes call states like the USSR state capitalist, because economic activity is still dictated by a top-down hierarchy allocating capital and exploiting workers.

Optimal is not the word you want to use, by the way. Not even free markets are optimal, that's why economists talk about 'market failures'.

I agree with you, though I used the Czech Republic as an example because that's how it is commonly (yet wrongly) understood by the other side. It can be seen as collectivist in some ways, but in some it is much less. And I think the detailed comparison actually shows that the problem lies elsewhere (as you correctly state - concentration of power).

The USSR was not structured like one massive corporation. Corporation tends to seek profit; while USSR sought survival. Was bad at it, too: built millions of tanks and other military hardware that rusted without any battle, lost the cold war and tanked.

You're talking about purpose, not structure. I'll agree, the USSR's purpose was not profit, because profit does not make sense if you're trying to own everything. The USSR's goals were growth and, as a logical consequence of growth, not shrinking, i.e. survival. It failed, yes. The larger a hierarchy and its concentration of resources, leadership, and power at the pinnacle, the worse it performs. This occurs with corporations in a capitalist system as well, but since it is not a defining feature of such corporations that they must own everything, their existence is more flexible. They can merge, split, be acquired, get sold off, get refinanced, etc. In this way, the capitalists (viz. people who make their living off of property ownership) can preserve their ownership even if their power structures fail.

So the key difference between the USSR and the Liberal states in opposition to it is the notion of property. Under the USSR, all property is state property and under the Liberal states, property is the bourgeois notion of property.