Central Planning in History – Tawantinsuyu  
Wednesday, August 15, 2012
Daron Acemoglu and James Robinson

In our last blog post we explained how the great societies of the Greek Bronze Age used central planning to organize their economies. Archaeologists don’t call this central planning but rather, following Polanyi (see his article “The Economy as an Instituted Process” in Trade and Markets in Early Empires), redistributive states, but it boils down to the same thing.

These societies were not alone in world history, and central planning was independently invented many times over, for example by the Incas (actually the Incas was the name of the ruling class of the empire of Tawantinsuyu – meaning the four regions) as they built their huge empire in modern Andean South America. The Incas had no money or writing but the state conducted decennial censuses. They built around 25,000 miles of roads, had a system of runners for sending messages and collecting information. They also recorded vast amounts of information of knotted strings called quipus, most of which cannot be read today.

In the Inca Empire, all the land was the Inca’s and large parts were allocated to the Temple of the Sun and other religious cults, others to the army, and yet others to the Crown. The rest which the state did not claim was granted to local communities for their subsistence production. The state lands, distributed throughout the empire, were then worked for free by the local people using various forms of corvée labor. Local people also had to weave llama wool given to them for this purpose by the state.

There seems to have been little or no market exchange but instead the state moved people into different areas where different crops could be grown, the so-called archipelago economy, and then distributed the goods by fiat. For example, Inca administrators who supervised the farming of crown lands would arrange for some of the goods to be moved to Cuzco or other regional capitals, while another part would be stored locally in warehouses. This system, vividly described by the anthropologist John Murra in his book The Economic Organization of the Inka State was a vast system of central planning developed without the aid of Das Kapital or indeed Eurasian role models.

It seems that like farming or democracy, central planning was independently invented many times over in world history. As Murra put it (page 121):

The Inca state functioned like a market: it absorbed the surplus production of a self-sufficient population and “exchanged” it by feeding the royals, the army and those on corvée as well as by issuing a lot of it as grants or benefactions.

Article originally appeared on Why Nations Fail by Daron Acemoglu and James Robinson (http://whynationsfail.com/).
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