5 ms·

Not one of the downvoters, but a voting scheme seems totally unrealistic to me. Just think about the sheer number of economic decisions occurring every day. Goi

by danbruc 11y ago

Not one of the downvoters, but a voting scheme seems totally unrealistic to me. Just think about the sheer number of economic decisions occurring every day. Going to store A instead of store B. Picking brand A over brand B. Walking two kilometers instead of calling a taxi. Picking your holiday destination. Researching suppliers for components for a new product. Cancelling a no longer profitable product. Doing market research. Changing the price of a product. And the list goes on forever. How could you ever faithfully reconcile all those decisions into a manageable number of votes? If you stranded with five people on a remote island you could probably pull this off, but in any realistic setting this seems totally out of reach to me. I am totally not happy with capitalism as we have it, but the thing that actually works really well are markets. Surely markets can fail if there are monopolies, if actors collude, if there are externalities not reflected by the price and so on and this can lead to socially suboptimal or plain bad outcomes but often they work really well. That is why I am against laissez-faire economics because well working markets are not something that necessarily arises out of the blue, sometimes it requires intervention.

lujim 11y ago
Replacing markets with central planners requires that you find planners that are 1) 100% impervious to corruption 2) Able to predict the weather or any other complex chaotic system with 100% accuracy. 3) Never sleep or take vacations. 4) Completely concerned with the needs of others and completely uninterested in their own needs (no family or friends) Once we can get 10 or 15 of those people, central planning would finally work better than imperfect markets.
- imgabe 11y ago
  Except for predicting complex systems, it sounds like something an AI might eventually be able to do.
- coldtea 11y ago
  >Replacing markets with central planners requires that you find planners that are 1) 100% impervious to corruption Not necessary, since markets have been proved to be quite prone to corruption themselves. >2) Able to predict the weather or any other complex chaotic system with 100% accuracy. Not necessary, they can just take quick actions. Markets can't predict the weather either. >3) Never sleep or take vacations. Markets actually sleep too -- e.g. stock exchanges close. And shops, especially pre-internet, close, all at the same time, around 8-9pm (with small exceptions like your local diner). And who said 24/7 planning is required in the first place? The whole idea about planning is that you do it in advance of some bigger or smaller period of time. Again, this "requirement" presupposes what it has to prove is needed. >4) Completely concerned with the needs of others and completely uninterested in their own needs (no family or friends) Not necessary, since the market has proven that it's doesn't result in any 100% perfect arrangement regarding needs either. The needs of a huge percentage are ignored (to the point that they can even die homeless and sick), 0.1% controls 80% of the wealth, and even individuals are taught and conditioned to make bad decisions all the time for their own needs, destroying themselves in the process (e.g. having easy credit pushed upon them, etc). All those arguments presume the market is 100% perfect, or even if they don't presume that, they still ask that the "planning system" should be 100% perfect (instead of just better than the market which would be a more logical demand).
  - danbruc 11y ago
    There is already one contradiction in there - you say planning would have to act quickly and planning happens for extended periods. That is of course not mutually exclusive because you could usually do some longer term planning and resort to quick interventions when needed. But could you really isolate those? Wouldn't quick interventions in one area not likely also have indirect effects on other areas making at least some smaller adjustments necessary? This looks to me like you would become pretty busy doing quick interventions and propagating the ripples through the rest of the plan at which point you are back where you started without any longer term planing. It seems to me that any form of longer term planning incurs a cost by not being able to react in a timely manner, effects propagating asynchronously and as fast as possible in markets would propagate way slower over a couple of planning iterations because they are unnecessarily forced into lockstep.
  - lujim 11y ago
    > Not necessary, since markets have been proved to be quite prone to corruption themselves. Markets actors can be corrupt, but the market itself is supply/demand driven. Corruption in central planners however is catastrophic. >Not necessary, they can just take quick actions. Markets can't predict the weather either. Markets don't predict complex systems, they are the complex system. They trend towards equilibrium when possible. Guessing where that equilibrium lies is nearly impossible for humans, but they try everyday. >3) Never sleep or take vacations. Never bought anything after 9pm? Amazon isn't a bad place to go for that, or Walmart, 7-11, nightclubs, bars, restaurants. Also while exchanges close there is after hours trading, orders being placed etc. The second the opening bell rings on the exchange there is an implied opening price that is different from yesterdays close due to 24/7 activity. >Not necessary, since the market has proven that it's doesn't result in any 100% perfect arrangement regarding needs either. Read about Boris Yeltsin's trip to the Clear Lake grocery store in the US in 1989. The US Market had better performance than Soviet central planners at stocking a grocery store according to demand. >The needs of a huge percentage are ignored (to the point that they can even die homeless and sick), 0.1% controls 80% of the wealth, and even individuals are taught and conditioned to make bad decisions all the time for their own needs, destroying themselves in the process (e.g. having easy credit pushed upon them, etc). Payday loans are an interesting phenomenon. Maybe they should be illegal, but no one in there right mind would charge anything short of usury rates with default levels as high as a payday loan operation. You are free to go head to the bad part of town and start lending at prime rate, but you will be destitute in one week. The alternative is no loans which may be better. Also in the US homelessness seems to be driven not from economic problems but from mental health issues and addiction. You may get hit with a massive medical bill, but without making a lot of mistakes along the way you will have a roof over your head. >All those arguments presume the market is 100% perfect, or even if they don't presume that, they still ask that the "planning system" should be 100% perfect (instead of just better than the market which would be a more logical demand). Those arguments say that to be better than an imperfect chaotic system, you have to be able to perfectly model that system then make decisions about it.
- ArkyBeagle 11y ago
  The argument against this is that the rough number of bits of information that 15 people can process is way below the number of bits of information processing potential of all consumers and producers.
coldtea 11y ago
>Not one of the downvoters, but a voting scheme seems totally unrealistic to me. Just think about the sheer number of economic decisions occurring every day. Going to store A instead of store B. Picking brand A over brand B. Walking two kilometers instead of calling a taxi. Picking your holiday destination. Researching suppliers for components for a new product. Cancelling a no longer profitable product. Doing market research. Changing the price of a product. And the list goes on forever. You don't vote at that level -- and it doesn't even make sense. You vote at a higher level.
- danbruc 11y ago
  That was my point, it would be totally impractical. Nevertheless you would have to find a way to compress all those considerations into higher level votes and also recover them from there. I could certainly vote for more cars but how would that vote reflect my preference for an electric cars, a more fuel efficient car or a really fast sports car? And how would you recover individual preferences from such an aggregate vote?
ZenoArrow 11y ago
> "Not one of the downvoters, but a voting scheme seems totally unrealistic to me." It's not too much of a stretch to see spending money as voting for economic activity.
eli_gottlieb 11y ago
Well, market fundamentalism aside, we've already made progress on the core question just by characterizing it: we need information about relative commodity scarcities and people's desires to be transmitted and collated efficiently, so that commodities can be produced to maximally meet human needs with minimum wastage. Now we just need to find an expert in information economics and start asking them good questions! Also, I'm not exactly a supporter of central planning, but it is worth noting, against conventional "market fundamentalism", that firms make fairly centralized and definite plans internally. So it seems that where information is scarce and radically incomplete, the stochasticity of markets helps achieve good outcomes in the same way that we might do empirical experiments in science rather than prove theorems. Likewise, where information is abundant, well-understood, and fairly complete (and where goals can be specified clearly -- extremely important!) - and where only success will be rewarded rather than failure! - the kind of planning done by firms and governments works well.
- orangecat 11y ago
  Also, I'm not exactly a supporter of central planning, but it is worth noting, against conventional "market fundamentalism", that firms make fairly centralized and definite plans internally. And that becomes increasingly inefficient as firms get larger, which is one reason why you generally don't end up with one company running everything.
  - eli_gottlieb 11y ago
    >And that becomes increasingly inefficient as firms get larger, which is one reason why you generally don't end up with one company running everything. That's not quite true. While internal firm planning does seem to get less efficient as firms get larger, that inefficiency doesn't seem to stop firms from actually getting larger, or gobbling each-other up to form monopolies and oligopolies. The real-world upshot seems to be that as long as firms are allowed to grow past the point of efficient planning and efficient competition, they will actually harm the larger economy by attempting to grow and consume market share even when doing so makes them less economically efficient.
- 11y ago

by danbruc 11y ago

lujim 11y ago

Replacing markets with central planners requires that you find planners that are 1) 100% impervious to corruption 2) Able to predict the weather or any other complex chaotic system with 100% accuracy. 3) Never sleep or take vacations. 4) Completely concerned with the needs of others and completely uninterested in their own needs (no family or friends) Once we can get 10 or 15 of those people, central planning would finally work better than imperfect markets.

imgabe 11y ago
Except for predicting complex systems, it sounds like something an AI might eventually be able to do.
coldtea 11y ago
>Replacing markets with central planners requires that you find planners that are 1) 100% impervious to corruption Not necessary, since markets have been proved to be quite prone to corruption themselves. >2) Able to predict the weather or any other complex chaotic system with 100% accuracy. Not necessary, they can just take quick actions. Markets can't predict the weather either. >3) Never sleep or take vacations. Markets actually sleep too -- e.g. stock exchanges close. And shops, especially pre-internet, close, all at the same time, around 8-9pm (with small exceptions like your local diner). And who said 24/7 planning is required in the first place? The whole idea about planning is that you do it in advance of some bigger or smaller period of time. Again, this "requirement" presupposes what it has to prove is needed. >4) Completely concerned with the needs of others and completely uninterested in their own needs (no family or friends) Not necessary, since the market has proven that it's doesn't result in any 100% perfect arrangement regarding needs either. The needs of a huge percentage are ignored (to the point that they can even die homeless and sick), 0.1% controls 80% of the wealth, and even individuals are taught and conditioned to make bad decisions all the time for their own needs, destroying themselves in the process (e.g. having easy credit pushed upon them, etc). All those arguments presume the market is 100% perfect, or even if they don't presume that, they still ask that the "planning system" should be 100% perfect (instead of just better than the market which would be a more logical demand).
- danbruc 11y ago
  There is already one contradiction in there - you say planning would have to act quickly and planning happens for extended periods. That is of course not mutually exclusive because you could usually do some longer term planning and resort to quick interventions when needed. But could you really isolate those? Wouldn't quick interventions in one area not likely also have indirect effects on other areas making at least some smaller adjustments necessary? This looks to me like you would become pretty busy doing quick interventions and propagating the ripples through the rest of the plan at which point you are back where you started without any longer term planing. It seems to me that any form of longer term planning incurs a cost by not being able to react in a timely manner, effects propagating asynchronously and as fast as possible in markets would propagate way slower over a couple of planning iterations because they are unnecessarily forced into lockstep.
- lujim 11y ago
  > Not necessary, since markets have been proved to be quite prone to corruption themselves. Markets actors can be corrupt, but the market itself is supply/demand driven. Corruption in central planners however is catastrophic. >Not necessary, they can just take quick actions. Markets can't predict the weather either. Markets don't predict complex systems, they are the complex system. They trend towards equilibrium when possible. Guessing where that equilibrium lies is nearly impossible for humans, but they try everyday. >3) Never sleep or take vacations. Never bought anything after 9pm? Amazon isn't a bad place to go for that, or Walmart, 7-11, nightclubs, bars, restaurants. Also while exchanges close there is after hours trading, orders being placed etc. The second the opening bell rings on the exchange there is an implied opening price that is different from yesterdays close due to 24/7 activity. >Not necessary, since the market has proven that it's doesn't result in any 100% perfect arrangement regarding needs either. Read about Boris Yeltsin's trip to the Clear Lake grocery store in the US in 1989. The US Market had better performance than Soviet central planners at stocking a grocery store according to demand. >The needs of a huge percentage are ignored (to the point that they can even die homeless and sick), 0.1% controls 80% of the wealth, and even individuals are taught and conditioned to make bad decisions all the time for their own needs, destroying themselves in the process (e.g. having easy credit pushed upon them, etc). Payday loans are an interesting phenomenon. Maybe they should be illegal, but no one in there right mind would charge anything short of usury rates with default levels as high as a payday loan operation. You are free to go head to the bad part of town and start lending at prime rate, but you will be destitute in one week. The alternative is no loans which may be better. Also in the US homelessness seems to be driven not from economic problems but from mental health issues and addiction. You may get hit with a massive medical bill, but without making a lot of mistakes along the way you will have a roof over your head. >All those arguments presume the market is 100% perfect, or even if they don't presume that, they still ask that the "planning system" should be 100% perfect (instead of just better than the market which would be a more logical demand). Those arguments say that to be better than an imperfect chaotic system, you have to be able to perfectly model that system then make decisions about it.
ArkyBeagle 11y ago
The argument against this is that the rough number of bits of information that 15 people can process is way below the number of bits of information processing potential of all consumers and producers.

coldtea 11y ago

>Not one of the downvoters, but a voting scheme seems totally unrealistic to me. Just think about the sheer number of economic decisions occurring every day. Going to store A instead of store B. Picking brand A over brand B. Walking two kilometers instead of calling a taxi. Picking your holiday destination. Researching suppliers for components for a new product. Cancelling a no longer profitable product. Doing market research. Changing the price of a product. And the list goes on forever. You don't vote at that level -- and it doesn't even make sense. You vote at a higher level.

danbruc 11y ago
That was my point, it would be totally impractical. Nevertheless you would have to find a way to compress all those considerations into higher level votes and also recover them from there. I could certainly vote for more cars but how would that vote reflect my preference for an electric cars, a more fuel efficient car or a really fast sports car? And how would you recover individual preferences from such an aggregate vote?

ZenoArrow 11y ago

> "Not one of the downvoters, but a voting scheme seems totally unrealistic to me." It's not too much of a stretch to see spending money as voting for economic activity.

eli_gottlieb 11y ago

Well, market fundamentalism aside, we've already made progress on the core question just by characterizing it: we need information about relative commodity scarcities and people's desires to be transmitted and collated efficiently, so that commodities can be produced to maximally meet human needs with minimum wastage. Now we just need to find an expert in information economics and start asking them good questions! Also, I'm not exactly a supporter of central planning, but it is worth noting, against conventional "market fundamentalism", that firms make fairly centralized and definite plans internally. So it seems that where information is scarce and radically incomplete, the stochasticity of markets helps achieve good outcomes in the same way that we might do empirical experiments in science rather than prove theorems. Likewise, where information is abundant, well-understood, and fairly complete (and where goals can be specified clearly -- extremely important!) - and where only success will be rewarded rather than failure! - the kind of planning done by firms and governments works well.

orangecat 11y ago
Also, I'm not exactly a supporter of central planning, but it is worth noting, against conventional "market fundamentalism", that firms make fairly centralized and definite plans internally. And that becomes increasingly inefficient as firms get larger, which is one reason why you generally don't end up with one company running everything.
- eli_gottlieb 11y ago
  >And that becomes increasingly inefficient as firms get larger, which is one reason why you generally don't end up with one company running everything. That's not quite true. While internal firm planning does seem to get less efficient as firms get larger, that inefficiency doesn't seem to stop firms from actually getting larger, or gobbling each-other up to form monopolies and oligopolies. The real-world upshot seems to be that as long as firms are allowed to grow past the point of efficient planning and efficient competition, they will actually harm the larger economy by attempting to grow and consume market share even when doing so makes them less economically efficient.
11y ago