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It is more tractable some argue [1] that companies like Walmart show that it is possible to centrally plan an economy. [1] https://vancouversun.com/entertainme

It is more tractable some argue [1] that companies like Walmart show that it is possible to centrally plan an economy. [1] https://vancouversun.com/entertainment/books/book-review-attention-shoppers-specials-on-socialism-on-aisle-7 https://vancouversun.com/entertainment/books/book-review-att...

nn3 6y ago
That's also the argument made in the recently reposted JBS Haldane "on being the right size": http://www.phys.ufl.edu/courses/phy3221/spring10/HaldaneRightSize.pdf http://www.phys.ufl.edu/courses/phy3221/spring10/HaldaneRigh... A small country is already smaller than a gigantic corporation. Of course the larger corporation try to have an internal economogy (with department charging each other), but they're still mostly centrally planned. So you could say the modern capitalism with gigantic corporation is already an exercise in central planning. """To the biologist the problem of socialism appears largely as a problem of size. The extreme socialists desire to run every nation as a single business 5 concern. I do not suppose that Henry Ford would find much difficulty in running Andorra or Luxembourg on a socialistic basis. He has already more men on his pay-roll than their population. It is conceivable that a syndicate of Fords, if we could find them, would make Belgium Ltd or Denmark Inc. pay their way. But while nationalization of certain industries is an obvious possibility in the largest of states, I find it no easier to picture a completely socialized British Empire or United States than an elephant turning somersaults or a hippopotamus jumping a hedge."""
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gruez 6y ago
The other thing to consider is failure modes. If a corporation misallocates resources, it's the shareholders that are footing the bill. Corporations make mistakes and go out of business all the time. If you apply this to the entire country, you end up with the the whole country footing the bill for policy mistakes. It already happens to an extent in capitalist systems (eg. lobbying by special interests), but centrally planned economy on a national scale will only exacerbate it.
- sudosysgen 6y ago
  Corporations incorrectly allocating resources leads to exactly the same issues as a centrally planned economy doing so. The issue is, corporations invariably do so. EDIT: Downstream comments are disputing the assertion that corporations misallocating resources causes issues for everyone. Here is why : Not really. I'm going to use some vaguely marxian terms here because it's the only framework that applies both to centrally planned economies and market economies, but I won't be using any explicitly marxian theories, correct or not. So, let's say that a member of the capitalist class (shareholder) sees their profit drop or even go negative as a consequence of the misallocation of the resources. This reduction in profit without any benefit anywhere else means that the capitalist cannot increase their amount of capital. Assuming a more or less fixed rate of profit otherwise, this decrease in the amount of constant capital means that the amount of variable capital (labour) necessary to produce the same commodity is going to be higher, which means that it will cost more labour to buy and produce. It will also mean that it is less likely that the capitalist class will increase variable capital, which would increase the monetary price of labour as demand increases, which means that wages are depressed for non-producible items such as land even at the same profit rate. Finally, it might push the capitalist to reduce their profit rate in order to catch up to the competition, which might in turn push them to reduce their profit rate as they have more of a margin, which can lead to various crises down the line. In the end, in capitalism, everyone pays for the errors of the shareholders, perhaps even more than the shareholder class themselves.
  - gruez 6y ago
    >leads to exactly the same issues as a centrally planned economy doing so. how so? In a market economy the shareholders are footing the bill, in a command economy it's evenly distributed across everyone.
    - sudosysgen 6y ago
      I edited my comment to contain a response to why this is actually distributed across everyone, almost to the same extent as in a planned economy.
  - 6y ago

nn3 6y ago

That's also the argument made in the recently reposted JBS Haldane "on being the right size": http://www.phys.ufl.edu/courses/phy3221/spring10/HaldaneRightSize.pdf http://www.phys.ufl.edu/courses/phy3221/spring10/HaldaneRigh... A small country is already smaller than a gigantic corporation. Of course the larger corporation try to have an internal economogy (with department charging each other), but they're still mostly centrally planned. So you could say the modern capitalism with gigantic corporation is already an exercise in central planning. """To the biologist the problem of socialism appears largely as a problem of size. The extreme socialists desire to run every nation as a single business 5 concern. I do not suppose that Henry Ford would find much difficulty in running Andorra or Luxembourg on a socialistic basis. He has already more men on his pay-roll than their population. It is conceivable that a syndicate of Fords, if we could find them, would make Belgium Ltd or Denmark Inc. pay their way. But while nationalization of certain industries is an obvious possibility in the largest of states, I find it no easier to picture a completely socialized British Empire or United States than an elephant turning somersaults or a hippopotamus jumping a hedge."""

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gruez 6y ago

The other thing to consider is failure modes. If a corporation misallocates resources, it's the shareholders that are footing the bill. Corporations make mistakes and go out of business all the time. If you apply this to the entire country, you end up with the the whole country footing the bill for policy mistakes. It already happens to an extent in capitalist systems (eg. lobbying by special interests), but centrally planned economy on a national scale will only exacerbate it.

sudosysgen 6y ago
Corporations incorrectly allocating resources leads to exactly the same issues as a centrally planned economy doing so. The issue is, corporations invariably do so. EDIT: Downstream comments are disputing the assertion that corporations misallocating resources causes issues for everyone. Here is why : Not really. I'm going to use some vaguely marxian terms here because it's the only framework that applies both to centrally planned economies and market economies, but I won't be using any explicitly marxian theories, correct or not. So, let's say that a member of the capitalist class (shareholder) sees their profit drop or even go negative as a consequence of the misallocation of the resources. This reduction in profit without any benefit anywhere else means that the capitalist cannot increase their amount of capital. Assuming a more or less fixed rate of profit otherwise, this decrease in the amount of constant capital means that the amount of variable capital (labour) necessary to produce the same commodity is going to be higher, which means that it will cost more labour to buy and produce. It will also mean that it is less likely that the capitalist class will increase variable capital, which would increase the monetary price of labour as demand increases, which means that wages are depressed for non-producible items such as land even at the same profit rate. Finally, it might push the capitalist to reduce their profit rate in order to catch up to the competition, which might in turn push them to reduce their profit rate as they have more of a margin, which can lead to various crises down the line. In the end, in capitalism, everyone pays for the errors of the shareholders, perhaps even more than the shareholder class themselves.
- gruez 6y ago
  >leads to exactly the same issues as a centrally planned economy doing so. how so? In a market economy the shareholders are footing the bill, in a command economy it's evenly distributed across everyone.
  - sudosysgen 6y ago
    I edited my comment to contain a response to why this is actually distributed across everyone, almost to the same extent as in a planned economy.
- 6y ago