<P> However, the economies of the former Socialist states, excluding SFR Yugoslavia, were based on bureaucratic, top - down administration of economic directives and micromanagement of the worker in the workplace inspired by capitalist models of scientific management . As a result, some socialist movements have argued that said economies were not socialist due to the lack of equal power - relations in the workplace, the presence of a new "elite", and because of the commodity production that took place in these economies . These economic and social systems have been classified as being either Bureaucratic collectivist, State capitalist or Deformed workers' states, by its critics . The exact nature of the USSR et al remains unresolved within said socialist movements . However, other socialist movements defend the systems that were in place in Eastern Europe and the Soviet Union, remembering, as said above, that public ownership of the means of production can signify many variants . In the case of the USSR and its satellites, it was the State which controlled and managed almost all of the economy as a big huge enterprise . Furthermore, the products that were manufactured in Soviet - type economies were produced directly for use, given the fact that all of them were sold to the public at below - market prices (i.e. they were sold in deficit to satisfy the needs of the population) </P> <P> "I am convinced there is only one way to eliminate (the) grave evils (of capitalism), namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals . In such an economy, the means of production are owned by society itself and are utilized in a planned fashion . A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child . The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow - men in place of the glorification of power and success in our present society ." </P> <P> Economic planning is a mechanism for the allocation of economic inputs and decision - making based on direct allocation, in contrast to the market mechanism, which is based on indirect allocation . An economy based on economic planning appropriates its resources as needed, so that allocation comes in the form of internal transfers rather than market transactions involving the purchasing of assets by one government agency or firm by another . Decision - making is carried out by workers and consumers on the enterprise - level . </P> <P> Economic planning is not synonymous with the concept of a command economy, which existed in the Soviet Union, and was based on a highly bureaucratic administration of the entire economy in accordance to a comprehensive plan formulated by a central planning agency, which specified output requirements for productive units and tried to micromanage the decisions and policies of enterprises . The command economy is based on the organizational model of a capitalist firm, but applies it to the entire economy . </P>

Who decides what to produce in a socialist economy