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>that part of the article misinterprets centralised planning. What it describes is the logistics of getting something from one place to another. I think it's w

>that part of the article misinterprets centralised planning. What it describes is the logistics of getting something from one place to another. I think it's worthwhile to re-read the passage I quoted: >Hayek[...] argued that no bureaucracy could ever match the miracle of markets, which spontaneously and efficiently aggregate the knowledge of a society. This isn't just about physical logistics. Hayek is arguing that no centralised agent has perfect information. The author is arguing that Amazon is approaching the stage when it would have perfect information about the consumers it serves. >Amazon doesn't have the final word on what people buy (or the destination of goods for that matter) so it isn't a centrally planned system in that sense. Even if it doesn't have the final word, it does have quite a bit of say in the form of its recommender system. Also, "communism" in the sense of Marx -- one of the two senses in which I was using the word -- is not necessarily a centrally planned system. Rather, it's an idealisation of what an economy would become if it achieved 100% automation, i.e. an economy operating at 100% efficiency. You can see it in the structure of Marx's "historic materialism" argument: just as capitalism had displaced feudalism because it's more efficient, socialism would then displace capitalism, and communism would do the same for socialism. In Marx's hierarchy of efficiency: Feudalism < capitalism < socialism < communism So a communist economy, in Marx's sense, is also an economy in which there's perfect information. That can't possibly happen in the real world, of course, and Hayek correctly points this out about a centralised bureaucracy. But he's wrong about markets; no market is 100% efficient or operates in an environment of perfect information either.

pdonis 7y ago
> Hayek is arguing that no centralised agent has perfect information. The author is arguing that Amazon is approaching the stage when it would have perfect information about the consumers it serves. This statement in the article is a huge misstatement. First, Amazon only has information about the goods it sells. There are many things it doesn't sell, and many things that it can't sell. There are huge supply chains behind the products it sells that it does not see. There are also many things of value that are not exchanged with money. Second, to the extent Amazon does have information about its customers, it has that information because of those customers' buying decisions. In other words, it has exactly the information that Hayek says a market participant has, and no more: the price at which other market participants will buy whatever quantity of one's products are sold.
- morningseagulls 7y ago
  >> Hayek is arguing that no centralised agent has perfect information. The author is arguing that Amazon is approaching the stage when it would have perfect information about the consumers it serves. >This statement in the article is a huge misstatement. At least blame the right person: me. The above statement is a paraphrase of what I thought the author's argument was. >First, Amazon only has information about the goods it sells. >There are huge supply chains behind the products it sells that it does not see. And it is in the process of acquiring more information. Amazon isn't just a retailer anymore: its main source of operating income is now AWS[0]. Also, dredmorbius has pointed out[1] that Amazon is doing vertical integration with its Amazon Business offering[2]. >There are many things it doesn't sell, and many things that it can't sell. This is irrelevant, because these "many things" exist in a market outside of Amazon's "jurisdiction". Even in the historical centrally planned economies, these "many things" also existed. >There are also many things of value that are not exchanged with money. And they are getting rarer and rarer, because monetisation is now the Great Project. >In other words, it has exactly the information that Hayek says a market participant has, and no more: the price at which other market participants will buy whatever quantity of one's products are sold. Actually, Amazon has more information than a single market participant has. Since it is the market because it is a marketplace-as-a-service, it has exactly the information that Hayek says the sum total of all market participants have. This invalidates Hayek's argument that no centralised agent can possibly collect that much information. This point is what I believe the author of the article is trying to make. [0] https://www.zdnet.com/article/in-2018-aws-delivered-most-of-amazons-operating-income/ https://www.zdnet.com/article/in-2018-aws-delivered-most-of-... [1] https://news.ycombinator.com/item?id=21306655 https://news.ycombinator.com/item?id=21306655 [2] https://www.amazon.com/b2b/info/amazon-business https://www.amazon.com/b2b/info/amazon-business
  - pdonis 7y ago
    > The above statement is a paraphrase of what I thought the author's argument was. Fair enough. > Amazon has more information than a single market participant has. Since it is the market because it is a marketplace-as-a-service, it has exactly the information that Hayek says the sum total of all market participants have. No, it doesn't. It has all the information that a large market participant has--i.e., a market participant that has a very large number of transactions with a very large number of other market participants. Hayek was perfectly well aware that such market participants existed (after all, such participants existed in his day--for example, Standard Oil). But Amazon's information is still limited to information that a market participant can have: namely, as I said, the prices at which the various goods it sells are sold. It does not have any more information than that. It has information about a lot more transactions than most other market participants, but the information it has about each transaction is the same as what the other participant in the transaction has, no more.

pdonis 7y ago

> Hayek is arguing that no centralised agent has perfect information. The author is arguing that Amazon is approaching the stage when it would have perfect information about the consumers it serves. This statement in the article is a huge misstatement. First, Amazon only has information about the goods it sells. There are many things it doesn't sell, and many things that it can't sell. There are huge supply chains behind the products it sells that it does not see. There are also many things of value that are not exchanged with money. Second, to the extent Amazon does have information about its customers, it has that information because of those customers' buying decisions. In other words, it has exactly the information that Hayek says a market participant has, and no more: the price at which other market participants will buy whatever quantity of one's products are sold.

morningseagulls 7y ago
>> Hayek is arguing that no centralised agent has perfect information. The author is arguing that Amazon is approaching the stage when it would have perfect information about the consumers it serves. >This statement in the article is a huge misstatement. At least blame the right person: me. The above statement is a paraphrase of what I thought the author's argument was. >First, Amazon only has information about the goods it sells. >There are huge supply chains behind the products it sells that it does not see. And it is in the process of acquiring more information. Amazon isn't just a retailer anymore: its main source of operating income is now AWS[0]. Also, dredmorbius has pointed out[1] that Amazon is doing vertical integration with its Amazon Business offering[2]. >There are many things it doesn't sell, and many things that it can't sell. This is irrelevant, because these "many things" exist in a market outside of Amazon's "jurisdiction". Even in the historical centrally planned economies, these "many things" also existed. >There are also many things of value that are not exchanged with money. And they are getting rarer and rarer, because monetisation is now the Great Project. >In other words, it has exactly the information that Hayek says a market participant has, and no more: the price at which other market participants will buy whatever quantity of one's products are sold. Actually, Amazon has more information than a single market participant has. Since it is the market because it is a marketplace-as-a-service, it has exactly the information that Hayek says the sum total of all market participants have. This invalidates Hayek's argument that no centralised agent can possibly collect that much information. This point is what I believe the author of the article is trying to make. [0] https://www.zdnet.com/article/in-2018-aws-delivered-most-of-amazons-operating-income/ https://www.zdnet.com/article/in-2018-aws-delivered-most-of-... [1] https://news.ycombinator.com/item?id=21306655 https://news.ycombinator.com/item?id=21306655 [2] https://www.amazon.com/b2b/info/amazon-business https://www.amazon.com/b2b/info/amazon-business
- pdonis 7y ago
  > The above statement is a paraphrase of what I thought the author's argument was. Fair enough. > Amazon has more information than a single market participant has. Since it is the market because it is a marketplace-as-a-service, it has exactly the information that Hayek says the sum total of all market participants have. No, it doesn't. It has all the information that a large market participant has--i.e., a market participant that has a very large number of transactions with a very large number of other market participants. Hayek was perfectly well aware that such market participants existed (after all, such participants existed in his day--for example, Standard Oil). But Amazon's information is still limited to information that a market participant can have: namely, as I said, the prices at which the various goods it sells are sold. It does not have any more information than that. It has information about a lot more transactions than most other market participants, but the information it has about each transaction is the same as what the other participant in the transaction has, no more.