8 ms·

You vastly overestimate the abilities of any central planner. Coordination through market prices is the only way to provide the goods you describe. If houses

by nickff 11y ago

You vastly overestimate the abilities of any central planner. Coordination through market prices is the only way to provide the goods you describe. If houses were a simple cube of bricks built in the same location every time, what you descibe might be feasible (though it would still be a challenge to design the bricks, select materials, and an assembly technique). Market pricing allows for relative valuation of different options, such as making waterfront homes in Manhattan more expensive than homes in Boise tend to be, or deciding how many strawberries should be grown off season in greenhouses, and how many factories should be dedicated to producing insulin (as well as which techniques should be used, as modern insulin techniques were created by a startup you may have heard of). You make the production of basic necessities sound simple, while ignoring the great amount of evidence to the contrary, i.e. Kruschev's famous tour of the grocery store.

leereeves 11y ago
Coordination through the market is far from perfect. The market has myopia and rarely makes huge long-term investments, and sometimes it leads people off a cliff like a band of lemmings. For example, it's given the United States a plethora of entertainment but decaying infrastructure, and the housing and dot-com bubbles. The best system seems to be a mix of both central planning and private markets.
- icebraining 11y ago
  There was (and is) a tremendous involvement of central planning in the housing market, so much that calculating its influence the bubble is impossible. Using it as evidence that we need more central planning is essentially using No True Scotsman - "no, I mean the good kind of central planning". https://en.wikipedia.org/wiki/Causes_of_the_United_States_housing_bubble#Government_policies https://en.wikipedia.org/wiki/Causes_of_the_United_States_ho...
  - leereeves 11y ago
    Would you agree that the worst abuses (like NINJA loans and selling assets known to be toxic) weren't centrally planned?
    - icebraining 11y ago
      Sure. My disagreement, or actually, my skepticism is on whether having "more" centrally planning would have made things better. That idea seems to rely on some utopic visions of the political process, in which the responsible people are not only extremely honest, but also have uncanny foresight.
      - leereeves 11y ago
        I'll grant that - obviously the government failed to prevent the housing bubble - but I think the bubble and the crash were fundamentally driven by market forces. And central planning was essential to the clean up afterwards. I think that supports the idea that a mix of the two is best.
        jazzyk 11y ago
        The housing bubble was not driven by market forces. It was driven by central planners by incentivising mortgage companies to lend recklessly, as these companies knew the mortgages were guaranteed by quasi-governmental companies like Fannie Mae and Freddie Mac which currently hold ~87% of all mortgages [1]. No wonder the Fed is so keen on pumping up housing prices (through too-low interest rates) [1] http://www.nytimes.com/interactive/2013/08/06/business/helping-housing.html?_r=0 http://www.nytimes.com/interactive/2013/08/06/business/helpi...
        leereeves 11y ago
        That link shows that the "share of mortgages backed by the government" dropped during the bubble and fell as low as (about) 38%, and it didn't increase until after housing prices peaked. I think you've misinterpreted the statistic you quoted. During the bubble, lenders found easy money for mortgages from private markets, and it was after the bubble ended that the government stepped in to prop up prices.
rdl 11y ago
As a counterexample: Military logistics tends to be centrally planned/standardized, not market based, and while it's rarely efficient, part of that has to do with the environment (where P(success) > unit price; it's perfectly ok to have ammunition which is marked up 100x at the front line vs. manufacturer's door if you're certain to have enough at the right time/place).
- bsbechtel 11y ago
  The risk of not having ammunition is factored in to the price in this example. For the same reason, I may pay 2x for marketing collateral I need for a trade show from a local supplier instead of purchasing online because the risk of not having it for the show is reduced. The price of goods in a free market is never necessarily the same in all contexts where transactions take place.
- icebraining 11y ago
  The F-35 alone is $163 billion over budget, with each plane costing hundreds of millions. Meanwhile, the $77 billion F-22 planes have been barely used, and probably won't be in the near future. But hey, as the Lockheed Martin VP says, "the best weapon is the one that's never used".
  - leereeves 11y ago
    Because the best case scenario for a weapon is that merely having it prevents an attack.
- DanielBMarkham 11y ago
  I spoke with military logistics folks about ten years ago. They told me that at one point, DoD had over 40,000 containers missing in Iraq. 40,000. But yes, if you keep throwing money at a problem, it tends to go away. Or at least disappear. For as long as there have been armies, good logistics continues to be a critical need. There's a reason large army deployments are always accompanied by large black markets.
  - 11y ago

by nickff 11y ago

leereeves 11y ago

Coordination through the market is far from perfect. The market has myopia and rarely makes huge long-term investments, and sometimes it leads people off a cliff like a band of lemmings. For example, it's given the United States a plethora of entertainment but decaying infrastructure, and the housing and dot-com bubbles. The best system seems to be a mix of both central planning and private markets.

icebraining 11y ago
There was (and is) a tremendous involvement of central planning in the housing market, so much that calculating its influence the bubble is impossible. Using it as evidence that we need more central planning is essentially using No True Scotsman - "no, I mean the good kind of central planning". https://en.wikipedia.org/wiki/Causes_of_the_United_States_housing_bubble#Government_policies https://en.wikipedia.org/wiki/Causes_of_the_United_States_ho...
- leereeves 11y ago
  Would you agree that the worst abuses (like NINJA loans and selling assets known to be toxic) weren't centrally planned?
  - icebraining 11y ago
    Sure. My disagreement, or actually, my skepticism is on whether having "more" centrally planning would have made things better. That idea seems to rely on some utopic visions of the political process, in which the responsible people are not only extremely honest, but also have uncanny foresight.
    - leereeves 11y ago
      I'll grant that - obviously the government failed to prevent the housing bubble - but I think the bubble and the crash were fundamentally driven by market forces. And central planning was essential to the clean up afterwards. I think that supports the idea that a mix of the two is best.
      - jazzyk 11y ago
        The housing bubble was not driven by market forces. It was driven by central planners by incentivising mortgage companies to lend recklessly, as these companies knew the mortgages were guaranteed by quasi-governmental companies like Fannie Mae and Freddie Mac which currently hold ~87% of all mortgages [1]. No wonder the Fed is so keen on pumping up housing prices (through too-low interest rates) [1] http://www.nytimes.com/interactive/2013/08/06/business/helping-housing.html?_r=0 http://www.nytimes.com/interactive/2013/08/06/business/helpi...
        leereeves 11y ago
        That link shows that the "share of mortgages backed by the government" dropped during the bubble and fell as low as (about) 38%, and it didn't increase until after housing prices peaked. I think you've misinterpreted the statistic you quoted. During the bubble, lenders found easy money for mortgages from private markets, and it was after the bubble ended that the government stepped in to prop up prices.

rdl 11y ago

As a counterexample: Military logistics tends to be centrally planned/standardized, not market based, and while it's rarely efficient, part of that has to do with the environment (where P(success) > unit price; it's perfectly ok to have ammunition which is marked up 100x at the front line vs. manufacturer's door if you're certain to have enough at the right time/place).

bsbechtel 11y ago
The risk of not having ammunition is factored in to the price in this example. For the same reason, I may pay 2x for marketing collateral I need for a trade show from a local supplier instead of purchasing online because the risk of not having it for the show is reduced. The price of goods in a free market is never necessarily the same in all contexts where transactions take place.
icebraining 11y ago
The F-35 alone is $163 billion over budget, with each plane costing hundreds of millions. Meanwhile, the $77 billion F-22 planes have been barely used, and probably won't be in the near future. But hey, as the Lockheed Martin VP says, "the best weapon is the one that's never used".
- leereeves 11y ago
  Because the best case scenario for a weapon is that merely having it prevents an attack.
DanielBMarkham 11y ago
I spoke with military logistics folks about ten years ago. They told me that at one point, DoD had over 40,000 containers missing in Iraq. 40,000. But yes, if you keep throwing money at a problem, it tends to go away. Or at least disappear. For as long as there have been armies, good logistics continues to be a critical need. There's a reason large army deployments are always accompanied by large black markets.
- 11y ago