HistoryGeek2019 wrote:The price system always works
Argh you're triggering PTSD symptoms. I used to be a free market fundamentalist, spent 4 years as an acolyte in the High Sanctum of the faith's most radical sect. Over many years I escaped, it's a long process though.
So instead of coming at it from first principles, I'll use a right-leaning frame:
People are always going to maximize their revenues and minimize their costs.
This is pretty much true of firms, leaving people aside for now (and leaving aside whether firms are people).
A rational firm trying to maximize its profit doesn't care whether it gets paid to build good weapons or slingshots. It's economically irrational to care about something like the well-being of soldiers, no matter how patriotic the firm's principals are. They can be sued, actually, for being patriotic instead of greedy. That's how we get a nightmare like the F-35: corporations may be people but they're sociopaths.
There is no price system for efficient allocation of military resources. It's not like soldiers get to bid on whether they have good or bad weapons. Even were such bidding possible, the price system wouldn't be militarily efficient: rational soldiers would bid on things that kept them safe rather than things that killed the enemy.
That's why things like steel allocations are a good idea in a war economy. Decisions are best made with the most information, later decisions have more information. If the military signs contracts for 50 X's and 10 Y's at time A, but later realize that Y is way more useful than X, steel allocations are a good way for the military to squirm out of the bad contract that specified more of X than Y.
Germany's war economy - for all its red tape - was certainly more price-responsive and capitalist than SU's. Yet the SU's was clearly more efficient during the war.