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And thus the brain drain from China will commence at full speed (more than present). Seems government regulators in China don't understand market forces either

And thus the brain drain from China will commence at full speed (more than present). Seems government regulators in China don't understand market forces either. Good to know.

AmericanChopper 9y ago
Central planning has always proven to be an inefficient way to allocate resources, so I’m not sure why free markets would be worried about China implementing more central planning.
- dd36 9y ago
  *Regulated free markets. Unregulated free markets could prove to be at a disadvantage. We shouldn’t be engaged in free trade with China. Countries or robber barons of those countries shouldn’t be allowed to destroy their environment to have a cheaper price.
- hn0 9y ago
  The age old liberal hymn. I’m not going to say this is wrong, but it’s a very black and white stance in the matter. Plenty of succesful economies have been centrally planned and/or protectionist. Likewise speculative booms in unregulated markets have produced massive amounts of deadweight loss. Not to mention the administrative overheads of running large scale free(ish) markets we observe in all first world countries, it makes the USSR look lean and mean by comparison. This is not to excuse the flagrant absurdities seen in state-capitalist economies all troughout the 20th century. The best model of central planning appears to be government guided bank credit allocation as seen in postwar Japan and the Asian Tigers, this lets entrepreneurs handle the micromanaging aspects whilst the state can avoid boom-bust cycles typically associated with private finance.
  - Fins 9y ago
    Seems pretty obvious that you have neither ever lived in USSR nor experienced the Soviet economics first-hand. Although I would like to see a sample of a single lean and mean organization in USSR...
    - hn0 9y ago
      You appear confused, I only mentioned the USSR once as a figure of speech. Communist countries were run by blind ideologues and I would never use those as good examples of central planning.
      - Fins 9y ago
        Then you should present an example of USSR being lean and efficient in some meaningful way, I'd think.
- alehul 9y ago
  As a side note, here's an argument from Paul Graham regarding central planning (when writing about MIT and Harvard): > [1] This is one of the advantages of not having the universities in your country controlled by the government. When governments decide how to allocate resources, political deal-making causes things to be spread out geographically. No central goverment would put its two best universities in the same town, unless it was the capital (which would cause other problems). But scholars seem to like to cluster together as much as people in any other field, and when given the freedom to they derive the same advantages from it. [1] http://www.paulgraham.com/cities.html#f1n http://www.paulgraham.com/cities.html#f1n
  - nbsd4life 9y ago
    It's easy to speak against government funding with a $40 billion endowment, which is higher than the GDP of some countries.
- kome 9y ago
  > Central planning has always proven to be an inefficient way to allocate resources Amazon seems pretty efficient. ;)
  - AmericanChopper 9y ago
    I think you don’t know what central planning means. It refers to a centrally planned economy, which has many problems to overcome that a single entity like Amazon doesn’t. Once a company gets large enough, some of it’s inefficiencies can be caused by similar issues that centrally planned economies face, however the two are very different. Amazon still has to contend with market forces, and its resource allocation decisions have to be mostly aligned with that. In a centrally planned economy, resource allocation only has to align with the central plan. Amazon also doesn’t have anything even close to the same supply chain complexity of an economy. I’d suggest you read ‘I, Pencil’, which convincingly asserts that not a single person knows how to make a pencil. China’s tech boom largely comes from entrepreneurs innovating in a market that is in many ways under-regulated, which has been a very efficient environment for those entrepreneurs to operate in. If the communist party wants to take more control of that industry, it’s hard to see how it’s going to do that without impacting efficiency.
    - yorwba 9y ago
      A centrally planned economy is still subject to market forces. They manifest as the effort required to implement the central plan. The difference between centrally planning your household finances, a company or a whole country is really just one of scale. Because the plan can allocate internal resources arbitrarily so long as the external forces are matched out, it's possible for this internal allocation to be wildly imbalanced. But if you're personally overspending on some item, you're going to feel that pretty quickly, while a corporation might sink a lot of money into a doomed project before it gets axed, and a country can spend decades before correcting. The larger an organization is, the longer it takes for a pressure felt at just one part of the organizational border to propagate far enough that it affects the overall plan. This is actually less a problem of central planning than of an aversion to change the plan. In a market, there is little attachment to other participants, and if a better supplier for something pops up, nobody has any qualms about switching to them. But most companies would hesitate much more before cutting an internal department than they would if it were just a question of hiring a different contractor. Because changing the plan feels like admitting failure, inefficiency creeps in. So central planning could actually work, but you would have to continually adapt the plan to changing circumstances. The end result might look a lot like a market economy, though.
- smallnamespace 9y ago
  > Central planning has always proven to be an inefficient way to allocate resources Capitalism and planning isn't as far apart as it might appear. What is a large multinational corporation except a centrally planned bureaucracy incentivized to maximize profits to shareholders? And where is the majority of wealth in the West (especially in the tech world), except in the hands of multinationals?
chisleu 9y ago
China has been and will continue to be authoritarian. Thier interests in tech is control. They need to control information. As a secondary objective, they want to see China's tech market expand so they can become more than the West's supplier of cheap labor-intensive goods. Brain drain is a concern, but the world's most populous country will always be a target, especially as the new rich enjoy sending thier kids to get Western educations. Something that should be apparently to is with the recent political events in the US is that when you control the media, you can control the narrative and to some extent the culture. Cons had far more control over this than any faction in America. Much of the early education is geared towards civil responsibility. We also know that China isn't above flexing it's authoritarian muscle. Gifted students in math and science are often shanghaied (heh) into schools designed to feed thier own tech sector and PLA Unit 61398

And thus the brain drain from China will commence at full speed (more than present). Seems government regulators in China don't understand market forces either. Good to know.

AmericanChopper 9y ago

Central planning has always proven to be an inefficient way to allocate resources, so I’m not sure why free markets would be worried about China implementing more central planning.

dd36 9y ago
*Regulated free markets. Unregulated free markets could prove to be at a disadvantage. We shouldn’t be engaged in free trade with China. Countries or robber barons of those countries shouldn’t be allowed to destroy their environment to have a cheaper price.
hn0 9y ago
The age old liberal hymn. I’m not going to say this is wrong, but it’s a very black and white stance in the matter. Plenty of succesful economies have been centrally planned and/or protectionist. Likewise speculative booms in unregulated markets have produced massive amounts of deadweight loss. Not to mention the administrative overheads of running large scale free(ish) markets we observe in all first world countries, it makes the USSR look lean and mean by comparison. This is not to excuse the flagrant absurdities seen in state-capitalist economies all troughout the 20th century. The best model of central planning appears to be government guided bank credit allocation as seen in postwar Japan and the Asian Tigers, this lets entrepreneurs handle the micromanaging aspects whilst the state can avoid boom-bust cycles typically associated with private finance.
- Fins 9y ago
  Seems pretty obvious that you have neither ever lived in USSR nor experienced the Soviet economics first-hand. Although I would like to see a sample of a single lean and mean organization in USSR...
  - hn0 9y ago
    You appear confused, I only mentioned the USSR once as a figure of speech. Communist countries were run by blind ideologues and I would never use those as good examples of central planning.
    - Fins 9y ago
      Then you should present an example of USSR being lean and efficient in some meaningful way, I'd think.
alehul 9y ago
As a side note, here's an argument from Paul Graham regarding central planning (when writing about MIT and Harvard): > [1] This is one of the advantages of not having the universities in your country controlled by the government. When governments decide how to allocate resources, political deal-making causes things to be spread out geographically. No central goverment would put its two best universities in the same town, unless it was the capital (which would cause other problems). But scholars seem to like to cluster together as much as people in any other field, and when given the freedom to they derive the same advantages from it. [1] http://www.paulgraham.com/cities.html#f1n http://www.paulgraham.com/cities.html#f1n
- nbsd4life 9y ago
  It's easy to speak against government funding with a $40 billion endowment, which is higher than the GDP of some countries.
kome 9y ago
> Central planning has always proven to be an inefficient way to allocate resources Amazon seems pretty efficient. ;)
- AmericanChopper 9y ago
  I think you don’t know what central planning means. It refers to a centrally planned economy, which has many problems to overcome that a single entity like Amazon doesn’t. Once a company gets large enough, some of it’s inefficiencies can be caused by similar issues that centrally planned economies face, however the two are very different. Amazon still has to contend with market forces, and its resource allocation decisions have to be mostly aligned with that. In a centrally planned economy, resource allocation only has to align with the central plan. Amazon also doesn’t have anything even close to the same supply chain complexity of an economy. I’d suggest you read ‘I, Pencil’, which convincingly asserts that not a single person knows how to make a pencil. China’s tech boom largely comes from entrepreneurs innovating in a market that is in many ways under-regulated, which has been a very efficient environment for those entrepreneurs to operate in. If the communist party wants to take more control of that industry, it’s hard to see how it’s going to do that without impacting efficiency.
  - yorwba 9y ago
    A centrally planned economy is still subject to market forces. They manifest as the effort required to implement the central plan. The difference between centrally planning your household finances, a company or a whole country is really just one of scale. Because the plan can allocate internal resources arbitrarily so long as the external forces are matched out, it's possible for this internal allocation to be wildly imbalanced. But if you're personally overspending on some item, you're going to feel that pretty quickly, while a corporation might sink a lot of money into a doomed project before it gets axed, and a country can spend decades before correcting. The larger an organization is, the longer it takes for a pressure felt at just one part of the organizational border to propagate far enough that it affects the overall plan. This is actually less a problem of central planning than of an aversion to change the plan. In a market, there is little attachment to other participants, and if a better supplier for something pops up, nobody has any qualms about switching to them. But most companies would hesitate much more before cutting an internal department than they would if it were just a question of hiring a different contractor. Because changing the plan feels like admitting failure, inefficiency creeps in. So central planning could actually work, but you would have to continually adapt the plan to changing circumstances. The end result might look a lot like a market economy, though.
smallnamespace 9y ago
> Central planning has always proven to be an inefficient way to allocate resources Capitalism and planning isn't as far apart as it might appear. What is a large multinational corporation except a centrally planned bureaucracy incentivized to maximize profits to shareholders? And where is the majority of wealth in the West (especially in the tech world), except in the hands of multinationals?

chisleu 9y ago

China has been and will continue to be authoritarian. Thier interests in tech is control. They need to control information. As a secondary objective, they want to see China's tech market expand so they can become more than the West's supplier of cheap labor-intensive goods. Brain drain is a concern, but the world's most populous country will always be a target, especially as the new rich enjoy sending thier kids to get Western educations. Something that should be apparently to is with the recent political events in the US is that when you control the media, you can control the narrative and to some extent the culture. Cons had far more control over this than any faction in America. Much of the early education is geared towards civil responsibility. We also know that China isn't above flexing it's authoritarian muscle. Gifted students in math and science are often shanghaied (heh) into schools designed to feed thier own tech sector and PLA Unit 61398