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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 Amaz

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.
- AmericanChopper 9y ago
  In a hypothetical perfectly efficient planned economy, you’d assume it would look just like a perfectly efficient free market. However the objectives of a planned economy aren’t market efficiency, the objectives are at least superficially supposed to be whatever the planners deem to be socially equitable wealth distribution. This requires overcoming market forces, by dictating supply with a central plan, and ignoring demand by arbitrarily distributing resources. This doesn’t scale up from a household scale to an economy-wide scale for numerous reasons, but probably the most significant ones are: 1. The non-existence or competition means that inefficient enterprises cannot fail. 2. The mind-boggling complexity of centrally planning the supply chain of an entire economy unavoidably introduce massive inefficiencies. If a household wants more bread, they can just allocate more resources to buying bread. But if I want to plan for an economy to produce more bread, I need to individually allocate more resources to every single element of the bread supply chain. There’s no way a central planner could be expected to do that with the same efficiency as market forces could.

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.

AmericanChopper 9y ago
In a hypothetical perfectly efficient planned economy, you’d assume it would look just like a perfectly efficient free market. However the objectives of a planned economy aren’t market efficiency, the objectives are at least superficially supposed to be whatever the planners deem to be socially equitable wealth distribution. This requires overcoming market forces, by dictating supply with a central plan, and ignoring demand by arbitrarily distributing resources. This doesn’t scale up from a household scale to an economy-wide scale for numerous reasons, but probably the most significant ones are: 1. The non-existence or competition means that inefficient enterprises cannot fail. 2. The mind-boggling complexity of centrally planning the supply chain of an entire economy unavoidably introduce massive inefficiencies. If a household wants more bread, they can just allocate more resources to buying bread. But if I want to plan for an economy to produce more bread, I need to individually allocate more resources to every single element of the bread supply chain. There’s no way a central planner could be expected to do that with the same efficiency as market forces could.