: I don't know if you've dealt with the issue elsewhere, but whenever governments have tried to determine what is in "demand" and what is not, it has invariably failed. The reason for capitalisms success is that supply and demand are self-regulated by the markets. On a large scale, it is hard to determine who needs what. That was the problem with the soviet union, there may have been a surplus of cross-country skis but there wasn't enough bread. Or, there were enough socks, but not enough shoes. People deciding democratically what it is that they need is kind of like how we do it now. Except in the case of a free-market society, every dollar bill is like a voting ballot. If there is no supply for something but plenty of demand, than some entrepeneur starts to supply it. Works like a charm.
The 'free market,' with its ability to ONLY perceive demand through dollars, fails people when people have legitimate demands but no dollars.
Another problem with capitalist production is the lack of planning. Sure, the market decides what is 'effectively' demanded---but only AFTER the commodities are produced. Often there is an overproduction crisis, bankruptcies, and a stock crash because the 'planning' happened AFTER the production, BEFORE the consumers 'voted.'
Again, the main problem with 'free market' determination of demand is its undemocratic nature.
As most consumers are WORKERS first, what they 'effectively' demand is determined largely by what their EMPLOYERS pay them.
This brings us back to the problem of the capitalist minority's monopolization of the means of production---which makes the relationship between capitalist and wage laborer a coercive one. Wages are determined by hunger and homelessness as often as by education and experience. So what people 'effectively' demand is limited by the wages their labor fetches (and, as I've pointed out many times before, the nature of capitalistic production itself requires most workers to be UNSKILLED, thus low-wage).
So I disagree with you on the 'charm' of the 'free market.'
I DO agree with you that governments have no legitimate business in determining demand, however. The Stalinist bureaucracies following Lenin* obviously did a terrible job determining consumer demand (on the occasions they cared at all).
I would not fault large-scale planning, however, for bureaucratic excesses; EVERYTHING in industrial production is done (successfully as well as poorly) on a large scale. Would you dismantle NASA or the Pentagon solely because they operate on a large scale? Of course, I use those examples to show that we are FAR from throwing everything to the vagaries of the 'free market.'
Finally, the main advantage that a democratic conception of production has over BOTH 'free market' and bureaucratic mechanisms of distribution is that EVERYONE who works gets represented freely and directly---BEFORE workers start working and WITHOUT working in the dark. Without the capitalist minority controlling wages (thus demand), a democratic conception of production would be the freest market imaginable.
* Lenin, it should be remembered, oversaw distribution under seige conditions (foreign occupation, civil war, sabotage by all the bourgeois-sympathetic experts) during the few years he lived after the Revolution.
Nevertheless, he believed in STRONG worker control of production. He promoted meetings following each work day for the workers to plan the organization of their work. Elected bosses---although imbued with firm centralized authority, were subject to worker recall at any time ('The Immediate Tasks of the Soviet Government , CW 27, p. 272).
Speaking of worker control OF the workplace, he wrote: '[F]or the first time a start is made by the entire population in learning the art of administration' (ibid). In a rough draft of the same article, he estimated that workers would do 6 hours of physical work daily, then 'four hours in running the state' ('Version of "The Immediate Tasks of the Soviet Government" , CW 42, p. 80).
Which was a crude implementation of job rotation.