5 ms·

>but demands are easy to underestimate Certainly during the USSR's time. But now you could issue every citizen a smartphone through which they could register t

>but demands are easy to underestimate Certainly during the USSR's time. But now you could issue every citizen a smartphone through which they could register their demand. >the optimization then will lead to planning only for the type of production that can ensure basic survival and not much more. Sorry, but I'm not seeing how this follows logically.

dragonwriter 9y ago
> But now you could issue every citizen a smartphone through which they could register their demand. Unless they are expending a limited resource to do so, the same problem remains. In capitalist market economy that resource is money [1], and it's universal and fungible, both bid for goods and services (and not just in typically "consumer" markets) and bid against with offerings of labor. If you abolish meaningful markets for some goods and services—including wage labor—you limit the scope of utility signals you get—even if, as most real world state socialist systems have done, you retain exchange of currency for “consumer” goods and services. [1] which, despite its utility, has significant issues, too. Nothing in this post is meant to endorse the optimality of capitalism, only to explain the problem of utility signalling in state socialism.
- utexaspunk 9y ago
  It wasn't my intent to imply this didn't involve money. You can have central planning and still have money, no? I would not disagree that it's nigh impossible to have a functional economy without money...
  - bcoates 9y ago
    If you can do central planning, money becomes mostly superfluous. The whole point is that factories don't pay for their inputs, stores are stocked without borrowing to buy goods, profitability of individual firms becomes irrelevant, and the overwhelming majority of economic activity is based on supplying planned needs. You could still have money but needing money to live a normal life or being able to use money to invest or stockpile goods would represent a failure of central planning.
    - utexaspunk 9y ago
      Maybe I'm dense, but I don't see how central planning makes money superfluous. Central planning doesn't mean you're beyond scarcity. Money quantifies the worker's share of the production and their spending communicates demands and priorities for subsequent production. There's no getting around having prices for things, the prices are just lower because they are not calculated to be as high as possible to maximize profits for investors and because the redundant production, marketing, and financing expenses associated with competition are eliminated.
  - dragonwriter 9y ago
    > It wasn't my intent to imply this didn't involve money Limiting the scope of markets limits the utility-signalling function of money, even if it is retained (as, in practice, centrally-planned systems tend to.) This is a problem of input data that technology that provides alternative mechanisms to collect the same data (cell phone purchasing) does not address.
Koshkin 9y ago
Demand can be, and often is, created artificially; it can also be reduced to some "acceptable" minimum. What purpose would nation-wide Central Planning serve? Certainly, not the maximizing of the profit of a company. It would serve to optimally satisfy demand, and minimizing the latter would be a sensible optimization strategy.
- pm90 9y ago
  All demands are not created alike ;). Certain basic needs are definitely not created artificially. So every human being has requirement for food, clothing, shelter and the very minimum. The more I think about it, the more it seems like, for instance, primary sectors could be handled so much better with central planning. e.g. instead of growing artificially subsidized corn, grow only an amount of corn that is required by the economy (perhaps a little extra). Continuously adjust production to meet demand if it increases. Demand for fancy food is more artificial. Maybe I love oysters but you like quail instead. So there could be a free market operating for oysters and quails.
  - utexaspunk 9y ago
    Or, like, I order the quail dish with my phone, or use my phone to let it be known that I would be interested in quail dishes costing less than $15 or something, and you'd do the same for oysters. That demand and potential demand would then be aggregated with everyone else's by the big central computer, which would calculate a price based upon the supply capacity and cost of production (including how those costs are affected by other demands in the economy). That price determination occurs organically in a free market, but it's not perfectly efficient and involves a lot of redundancy and waste. With sufficient computational power it might be possible to formalize that process and make it more efficient.
  - thehardsphere 9y ago
    Provision of basic necessities happens to be the cases where central planning has failed most spectacularly in practice. The most recent example would be what's happening in Venezuela today. The most infamous example would be the Great Leap Forward in Mao's China, which led to the single most deadly famine in human history. There's a reason why nobody tries to declare food a human right and give it away for free, even though people die if they don't eat.

dragonwriter 9y ago

> But now you could issue every citizen a smartphone through which they could register their demand. Unless they are expending a limited resource to do so, the same problem remains. In capitalist market economy that resource is money [1], and it's universal and fungible, both bid for goods and services (and not just in typically "consumer" markets) and bid against with offerings of labor. If you abolish meaningful markets for some goods and services—including wage labor—you limit the scope of utility signals you get—even if, as most real world state socialist systems have done, you retain exchange of currency for “consumer” goods and services. [1] which, despite its utility, has significant issues, too. Nothing in this post is meant to endorse the optimality of capitalism, only to explain the problem of utility signalling in state socialism.

utexaspunk 9y ago
It wasn't my intent to imply this didn't involve money. You can have central planning and still have money, no? I would not disagree that it's nigh impossible to have a functional economy without money...
- bcoates 9y ago
  If you can do central planning, money becomes mostly superfluous. The whole point is that factories don't pay for their inputs, stores are stocked without borrowing to buy goods, profitability of individual firms becomes irrelevant, and the overwhelming majority of economic activity is based on supplying planned needs. You could still have money but needing money to live a normal life or being able to use money to invest or stockpile goods would represent a failure of central planning.
  - utexaspunk 9y ago
    Maybe I'm dense, but I don't see how central planning makes money superfluous. Central planning doesn't mean you're beyond scarcity. Money quantifies the worker's share of the production and their spending communicates demands and priorities for subsequent production. There's no getting around having prices for things, the prices are just lower because they are not calculated to be as high as possible to maximize profits for investors and because the redundant production, marketing, and financing expenses associated with competition are eliminated.
- dragonwriter 9y ago
  > It wasn't my intent to imply this didn't involve money Limiting the scope of markets limits the utility-signalling function of money, even if it is retained (as, in practice, centrally-planned systems tend to.) This is a problem of input data that technology that provides alternative mechanisms to collect the same data (cell phone purchasing) does not address.

Koshkin 9y ago

Demand can be, and often is, created artificially; it can also be reduced to some "acceptable" minimum. What purpose would nation-wide Central Planning serve? Certainly, not the maximizing of the profit of a company. It would serve to optimally satisfy demand, and minimizing the latter would be a sensible optimization strategy.

pm90 9y ago
All demands are not created alike ;). Certain basic needs are definitely not created artificially. So every human being has requirement for food, clothing, shelter and the very minimum. The more I think about it, the more it seems like, for instance, primary sectors could be handled so much better with central planning. e.g. instead of growing artificially subsidized corn, grow only an amount of corn that is required by the economy (perhaps a little extra). Continuously adjust production to meet demand if it increases. Demand for fancy food is more artificial. Maybe I love oysters but you like quail instead. So there could be a free market operating for oysters and quails.
- utexaspunk 9y ago
  Or, like, I order the quail dish with my phone, or use my phone to let it be known that I would be interested in quail dishes costing less than $15 or something, and you'd do the same for oysters. That demand and potential demand would then be aggregated with everyone else's by the big central computer, which would calculate a price based upon the supply capacity and cost of production (including how those costs are affected by other demands in the economy). That price determination occurs organically in a free market, but it's not perfectly efficient and involves a lot of redundancy and waste. With sufficient computational power it might be possible to formalize that process and make it more efficient.
- thehardsphere 9y ago
  Provision of basic necessities happens to be the cases where central planning has failed most spectacularly in practice. The most recent example would be what's happening in Venezuela today. The most infamous example would be the Great Leap Forward in Mao's China, which led to the single most deadly famine in human history. There's a reason why nobody tries to declare food a human right and give it away for free, even though people die if they don't eat.