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Sure, but in the same way, what about all the little things that go into making a pencil today? Usually, as long as there is a market, you can break down all t

Sure, but in the same way, what about all the little things that go into making a pencil today? Usually, as long as there is a market, you can break down all those hours of gathering materials into the concept of "buy X at market price". It only starts looking unbelievably complex when you take control of every single stage and step, and are thus doing the equivalent of running multiple enterprises. That was probably more common in a feudal society, but not a given. I'm sure a lot of producers just bought the materials they needed.

zeveb 6y ago
> It only starts looking unbelievably complex when you take control of every single stage and step, and are this doing the equivalent of running multiple enterprises. Yup, and that's a good part of the problem with central planning and autarky. There is just too much going on for any one decision-maker to effectively handle. There is a lesson there for large companies, I think. OTOH, go too far with decentralisation and you have Google's 8 or 9 different messaging systems …
- Retric 6y ago
  That’s not really the issue with planning. Tracking the inputs to a process is fairly simple, it’s the output that’s really the issue. Diminishing returns makes it really difficult to how when to stop. Large companies often waste increasing amounts of money on internal processes because there is no mechanism to moderate the behavior. Markets can be summed up as discovering the value of the Nth of each and every little thing. And strangely enough you can use them with central planning. NYC could set the number of Taxi medallions based on their market price.
thaumasiotes 6y ago
> Usually, as long as there is a market, you can break down all those hours of gathering materials into the concept of "buy X at market price". It only starts looking unbelievably complex when you take control of every single stage and step But that's not what we're talking about. A medieval sword is expensive because making one requires thousands of hours of labor. Making a modern pencil has a lot of steps, but requires probably less than ten seconds of labor. Pencils are cheap. The number of steps is not relevant to anything. The complexity isn't hugely relevant either, though more so than the number of steps.
- kbenson 6y ago
  Chopping the wood, mining the graphite, drilling for the oil used to make the synthetic rubber for the eraser, you think the time and effort for all that amounts to ten seconds? The only reason I can come up with that you would think that is that you discount all these products that are easily delivered by the market as having no time and effort that goes into them. The part of the comment I was responding to is "required hundreds or thousands of man hours chopping trees, managing slow burning fires, carting ore and wood around". That's clearly referring to the whole production lifecycle of all the components, as otherwise you can just reduce that to the fixed cost of what you can pay the market to provide it for you. I didn't use a pencil as an example as a whim, but because this has been studied before[1], economics essays have been written on it[2], and people have actually gone through the steps to make it from scratch which has been covered here[3] (unfortunately the blog that was submitted seems to be gone), and let me tell you, the time to make a single pencil is not ten seconds if you could up all the time going into making the components that are used to create it. 1: https://freakonomics.com/podcast/i-pencil/ https://freakonomics.com/podcast/i-pencil/ 2: https://fee.org/resources/i-pencil-audio-pdf-and-html/ https://fee.org/resources/i-pencil-audio-pdf-and-html/ (1958) 3: https://news.ycombinator.com/item?id=10631115 https://news.ycombinator.com/item?id=10631115
  - CydeWeys 6y ago
    How much total labor time do you think goes into a single pencil? And if it's a non-trivial amount, then how in the world are pencils remotely as cheap as they actually are? Yes all those steps take work but you get a truly ridiculous amount of ore out of one person labor hour, enough for God knows how many thousands of pencils. I think you're confusing total labor volume involved in an entire supply chain that makes billions of pencils each year, and then what the person is responding to which is that you divide the total amount of labor spent by the total number of swords produced and it still ends up being hundreds to thousands of hours of labor per sword. This isn't remotely true of pencils using modern automated factory production.
    - CydeWeys 6y ago

zeveb 6y ago

> It only starts looking unbelievably complex when you take control of every single stage and step, and are this doing the equivalent of running multiple enterprises. Yup, and that's a good part of the problem with central planning and autarky. There is just too much going on for any one decision-maker to effectively handle. There is a lesson there for large companies, I think. OTOH, go too far with decentralisation and you have Google's 8 or 9 different messaging systems …

Retric 6y ago
That’s not really the issue with planning. Tracking the inputs to a process is fairly simple, it’s the output that’s really the issue. Diminishing returns makes it really difficult to how when to stop. Large companies often waste increasing amounts of money on internal processes because there is no mechanism to moderate the behavior. Markets can be summed up as discovering the value of the Nth of each and every little thing. And strangely enough you can use them with central planning. NYC could set the number of Taxi medallions based on their market price.

thaumasiotes 6y ago

> Usually, as long as there is a market, you can break down all those hours of gathering materials into the concept of "buy X at market price". It only starts looking unbelievably complex when you take control of every single stage and step But that's not what we're talking about. A medieval sword is expensive because making one requires thousands of hours of labor. Making a modern pencil has a lot of steps, but requires probably less than ten seconds of labor. Pencils are cheap. The number of steps is not relevant to anything. The complexity isn't hugely relevant either, though more so than the number of steps.

kbenson 6y ago
Chopping the wood, mining the graphite, drilling for the oil used to make the synthetic rubber for the eraser, you think the time and effort for all that amounts to ten seconds? The only reason I can come up with that you would think that is that you discount all these products that are easily delivered by the market as having no time and effort that goes into them. The part of the comment I was responding to is "required hundreds or thousands of man hours chopping trees, managing slow burning fires, carting ore and wood around". That's clearly referring to the whole production lifecycle of all the components, as otherwise you can just reduce that to the fixed cost of what you can pay the market to provide it for you. I didn't use a pencil as an example as a whim, but because this has been studied before[1], economics essays have been written on it[2], and people have actually gone through the steps to make it from scratch which has been covered here[3] (unfortunately the blog that was submitted seems to be gone), and let me tell you, the time to make a single pencil is not ten seconds if you could up all the time going into making the components that are used to create it. 1: https://freakonomics.com/podcast/i-pencil/ https://freakonomics.com/podcast/i-pencil/ 2: https://fee.org/resources/i-pencil-audio-pdf-and-html/ https://fee.org/resources/i-pencil-audio-pdf-and-html/ (1958) 3: https://news.ycombinator.com/item?id=10631115 https://news.ycombinator.com/item?id=10631115
- CydeWeys 6y ago
  How much total labor time do you think goes into a single pencil? And if it's a non-trivial amount, then how in the world are pencils remotely as cheap as they actually are? Yes all those steps take work but you get a truly ridiculous amount of ore out of one person labor hour, enough for God knows how many thousands of pencils. I think you're confusing total labor volume involved in an entire supply chain that makes billions of pencils each year, and then what the person is responding to which is that you divide the total amount of labor spent by the total number of swords produced and it still ends up being hundreds to thousands of hours of labor per sword. This isn't remotely true of pencils using modern automated factory production.
  - CydeWeys 6y ago