Many economic criticisms focus on the experiences of Soviet-type planned economies, critiquing the lack of budget constraints in enterprises operating in a planned economy, which reduces incentives for enterprises to act on information efficiently, thereby reducing overall welfare for society.
Many economic criticisms of socialism focus on the experiences of Soviet-type planned economies. It is argued that a lack of budget constraints in enterprises operating in a planned economy reduces incentives for enterprises to act on information efficiently, thereby reducing overall welfare for society.