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I think your oversimplifying here. I think economic growth is strongly tied to stability but it's also strongly tied to mechanisms. Pricing as a vehicle for me
by TimPC 6y ago
I think your oversimplifying here. I think economic growth is strongly tied to stability but it's also strongly tied to mechanisms. Pricing as a vehicle for measuring supply and demand simply outstrips everything else we've tried. Even this article mentions how difficult it is to centrally plan supply and demand and how large the bureaucracy needs to be. Perhaps some technocratic socialism could create a computerized bureaucracy large enough to solve this problem somewhat well, but I still think computer models are going to be inferior to actual markets. While markets do have plenty of imperfections they are kind of like democracy, the worst system for supply and demand except for all the other ones. As for why having good systems of supply and demand affects innovation dramatically the short answer is that it forces innovation to conform to an approximation of useful (creating demand) rather than just novel (which is what happens in a lot of purely academic projects). Non-capitalist systems have also done poorly at creating competition and competition seems to be a central force in generating quality (in fact the biggest failure mode of capitalism seems to be anti-competitive monopolies).
- vidarh 6y agoOf course I'm oversimplifying, but there are plenty of examples. E.g. compare the UK and France over the last 20 years, and try to spot when France cut working hours. Or look at China under Mao, with the frequent political changes, vs. under Deng. It's tempting to think the growth under Deng happened because of his economic reforms, but the growth started before the reforms. Just like growth started every time things settled down under Mao too, only to be severely disrupted again and again. Look at Africa, and match GDP growth against peace vs. war in different countries. Also, I did not speak about innovation. I spoke specifically about economic growth. Economic growth is affected by innovation, but it can go very far with little innovation. [EDIT: Also to your mention of 'technocratic socialism' vs' markets, the two are not contradictory; many socialist ideologies favour markets as the primary resource allocation mechanism over planning]
- jbay808 6y agoNorth Korea seems like a pretty stable country that hasn't seen much economic growth. On the other hand, they are perhaps the very poorest of stable countries, and still wealthier than some less stable countries like the Congo. I also suspect that rather being merely inefficient, their leadership might be actively opposed to economic growth and could be suppressing it deliberately to keep their population poor and hungry.
- tehjoker 6y agoMarkets are democracy for the rich. They are only democratic when everyone has roughly equal purchasing power, a condition which is nearly immediately undone by a market. The whole idea that founded the Soviet Union is that markets are deeply undemocratic and they were trying something different. You can criticize their attempt, but it's important to at least understand that.
- thrwway34 6y agoThere were plenty of markets and black markets in USSR. Most of the time the only reliable source of meat and poultry for ordinary citizen was a "Farmer's Market" (Колхозный Рынок).