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I don't think the planning in the USSR and Walmart are remotely comparable, and not just in terms of timeliness. A central planner is deciding who needs what, h
by tvanantwerp 8y ago
I don't think the planning in the USSR and Walmart are remotely comparable, and not just in terms of timeliness. A central planner is deciding who needs what, how much, when, and where. But Walmart is discovering who needs what, how much, when, and where. They aren't decided well in advance what people need; they are working to understand what people want and how to get it to them. How much you can sell and at what prices drive their forward-looking decisions around what people value. Without those signals, a central planner can't really know who values what. It's just guesswork.
- claudiawerner 8y agoMust it be guesswork? Most of us have devices (computers and mobile phones) that could very easily be used to register demand for various products and to show what's available. In what way precisely does Walmart work to understand what people want which a planned economy could not possibly?
- tvanantwerp 8y agoPrices communicate not just demand in the sense of "I want it" but also "I want it approximately this badly and not more than that". With no price signal to indicate the extent of a demand, it's up to the whim of the planner to decide who needs good X the most. Pressing an "I want this" button in an app doesn't at all distinguish between "I'd like to have it if it's free, but it's not essential" and "if I don't get this right now, my life is over". Sure, you could try to engineer in levels of demand (nobody ever abused the "urgent" button in email systems, right?), but what you'd ultimately end up doing to get an accurate estimate of what trade-offs people prefer across different demands for goods is that you'd have reinvented prices.