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.
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.