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centralization also results in severely less optimal results because the information and experience available to central planners is substantially less then inf

centralization also results in severely less optimal results because the information and experience available to central planners is substantially less then information available to individual actors. Not only is the information of poorer quality prior to making the decisions the quality of feedback is poor. It becomes very difficult to understand the consequences of decisions when you have nothing to compare it to. In a decentralized system the individual actors can see the results of decisions made by other actors and change accordingly. In a centralized system there is no other 'center' to compare it against. They could be making good decisions or they could possibly be not. In the real-world the amount of unknown variables is so high that even decisions made with the best intentions, most rational approach, and most perfect knowledge possible can fail miserably. It wouldn't be the fault of the central planners, per say, but it will still be a negative outcome. Also a decentralized system the consequences to negative decisions is dampened. Even if the bad decision was done out of perfect rationality there is enough irrational actors that somebody else will likely stumble across a superior decision and thus guide a more positive outcome. A bad decision by a individual actor will potentially be devastating to that actor, but the effects of that decision will be limited to that actor and those around him that may be negatively impacted.. it won't impact the entire group and his example will lead to better decision making in the near future. With centralized planning the bad decisions affect the entire group and it can take much much longer for the bad decision to be recognized as bad and even longer to change. By that time you can fix the problem have the group adjusted to work around the bad decisions and undoing the bad will just create new issues.

j2kun 10y ago
> Also a decentralized system the consequences to negative decisions is dampened. Even if the bad decision was done out of perfect rationality there is enough irrational actors that somebody else will likely stumble across a superior decision and thus guide a more positive outcome. Or, alternatively, it will be a race to the bottom until the housing market crashes. > A bad decision by a individual actor will potentially be devastating to that actor, but the effects of that decision will be limited to that actor and those around him that may be negatively impacted Unless that actor has nuclear weapons, poisons a water supply, destroys the source of some resource the rest of the world depends on...
- natermer 10y ago
  > Or, alternatively, it will be a race to the bottom until the housing market crashes. The housing market crash was due to central planning. Hardly a counter point. > Unless that actor has nuclear weapons, poisons a water supply, destroys the source of some resource the rest of the world depends on... Central planners are humans. When comparing human systems of central vs decentralized management you have to understand that the central planners are just as prone to irrationality as individual actors. Pointing out that individual choices can lead to bad outcomes does not mean that central planning choices will not lead to bad outcomes. The problem is one of dealing with complex mulch-facteded world were historical information will very often lead to poor decision making in the face of change. The lack of good information, lack of good feedback mechanisms, and inability to gain enough experience are all severely limiting to the chances of quality outcomes as a result of central planning.
  - five3 10y ago
    >The housing market crash was due to central planning. Hardly a counter point. Citation needed on how central planning led to MBS and CDS exploding.
    - hedonistbot 10y ago
      Fannie Mae and Freddie Mac -> https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... Admittedly not the only factor but a huge contributor.
jimmytidey 10y ago
There isn't one thing you can say about centralisation that is going to usefully apply across the diverse cooperative situations people face.
- natermer 10y ago
  flaws I described in central planning are pretty universal. Nobody can say any one thing that will apply to all things all the time.
vacri 10y ago
> centralization also results in severely less optimal results because the information and experience available to central planners is substantially less then information available to individual actors. This is a throwaway generalisation. A simple counter-example is pollution, where significant improvements come from centralised actions (watchdog agencies and regulation) because individuals either don't know or don't care about their contributions.

j2kun 10y ago

> Also a decentralized system the consequences to negative decisions is dampened. Even if the bad decision was done out of perfect rationality there is enough irrational actors that somebody else will likely stumble across a superior decision and thus guide a more positive outcome. Or, alternatively, it will be a race to the bottom until the housing market crashes. > A bad decision by a individual actor will potentially be devastating to that actor, but the effects of that decision will be limited to that actor and those around him that may be negatively impacted Unless that actor has nuclear weapons, poisons a water supply, destroys the source of some resource the rest of the world depends on...

natermer 10y ago
> Or, alternatively, it will be a race to the bottom until the housing market crashes. The housing market crash was due to central planning. Hardly a counter point. > Unless that actor has nuclear weapons, poisons a water supply, destroys the source of some resource the rest of the world depends on... Central planners are humans. When comparing human systems of central vs decentralized management you have to understand that the central planners are just as prone to irrationality as individual actors. Pointing out that individual choices can lead to bad outcomes does not mean that central planning choices will not lead to bad outcomes. The problem is one of dealing with complex mulch-facteded world were historical information will very often lead to poor decision making in the face of change. The lack of good information, lack of good feedback mechanisms, and inability to gain enough experience are all severely limiting to the chances of quality outcomes as a result of central planning.
- five3 10y ago
  >The housing market crash was due to central planning. Hardly a counter point. Citation needed on how central planning led to MBS and CDS exploding.
  - hedonistbot 10y ago
    Fannie Mae and Freddie Mac -> https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... Admittedly not the only factor but a huge contributor.

jimmytidey 10y ago

There isn't one thing you can say about centralisation that is going to usefully apply across the diverse cooperative situations people face.

natermer 10y ago
flaws I described in central planning are pretty universal. Nobody can say any one thing that will apply to all things all the time.

vacri 10y ago

> centralization also results in severely less optimal results because the information and experience available to central planners is substantially less then information available to individual actors. This is a throwaway generalisation. A simple counter-example is pollution, where significant improvements come from centralised actions (watchdog agencies and regulation) because individuals either don't know or don't care about their contributions.