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Allende tried something similar in Chile with project Cybersyn. Not AI yet but it shows how the economy could be centrally planned using technology. Shame that

Allende tried something similar in Chile with project Cybersyn. Not AI yet but it shows how the economy could be centrally planned using technology. Shame that Pinochet's coup ended the experiment.

nradov 5y ago
There's no reason to think it would have produced better results than a free market economy.
- dandanua 5y ago
  The central planning will always produce better results, but only if you know the optimal strategy. Since it's impossible to know the optimal strategy a free market is a better solution in practice. Until a sufficiently strong AI arrives.
- Shmebulock 5y ago
  There are potentially plausible reasons such as that a free economy system could take longer to achieve an efficient market equilibrium compared to a centrally planned system.
  - nradov 5y ago
    There is no such thing as a market equilibrium. The real world is constantly in flux.
- sudosysgen 5y ago
  There are dozens of reasons. Free markets have deduplication of labour, concepts like patents and IP that are inefficient are necessary, there are economic crises that wreck compound growth in the long term, there are issues of inequality, humans may be lazy and not attempt to allocate their capital in the most appropriate way (see index funds), socially useful endeavors may not be profitable, etc... But central planning is insanely hard, so it's not easy. That said, the USSR which literally used pen and paper for planning was the #2 economy in the world, so it clearly has some potential. Now there can be other reasons to not want planning.
  - kolinko 5y ago
    #2 economy per capita, or in absolute numbers? I'm quite sure western nations had better economies when you adjust for each country's size.
    - sudosysgen 5y ago
      In absolute numbers. But planning economies becomes so much more difficult at scale, though if we looked at the communist country with the highest per capita economy we would still see numbers that are middle of the pack.
  - slibhb 5y ago
    > There are dozens of reasons. Free markets have deduplication of labour, concepts like patents and IP that are inefficient are necessary, there are economic crises that wreck compound growth in the long term, there are issues of inequality, humans may be lazy and not attempt to allocate their capital in the most appropriate way (see index funds), socially useful endeavors may not be profitable, etc... There's no reason to think that economic crises and inequality would be absent in a planned economy.
    - sudosysgen 5y ago
      Of course there are. If you have good knowledge of the economy and of production mechanisms you can simply not do anything that could cause a crash. The issue is getting the knowledge to behind with, obviously. Inequality is necessary to some level but empirically it's possible to make it much smaller. Empirically the USSR had a single economic crisis without exogenous cause which was caused by incorrect accounting of agricultural production at its heart.
      - deleted 5y ago
        [deleted]
      - slibhb 5y ago
        > If you have good knowledge of the economy and of production mechanisms you can simply not do anything that could cause a crash But we don't have that knowledge. Economists disagree on many foundational questions. At some point, economics shades into psychology and we certainly don't have theories that predict human behavior. I don't discount the possibility that knowledge can help economies run more smoothly but you're understating the difficulty here. > Empirically the USSR had a single economic crisis without exogenous cause which was caused by incorrect accounting of agricultural production at its heart. The idea that the USSR had one economic crisis is a bizarre joke. The only way you can justify this comment is to ignore all the shortages and poverty and make some tortured semantic argument about what constitutes a "crisis". Empirically speaking, free markets trounced centrally planned economies in the 20th century. If you can't recognize that, I'm not sure why anyone would take you seriously.
- SiempreViernes 5y ago
  So long as a monopolistic centrally planned company acts on a free market do you consider your point unchallenged, or does the fact that the free markets tend to become dominated by large centrally planned corporations cause some tension?
- pietrovismara 5y ago
  There's no reason to think a free market economy is the single best solution we could ever hope to stumble upon. We keep evolving, we will evolve out of the "free" market economy as well.
lebuffon 5y ago
Was it actually Pinochet who masterminded the coup? ;-)
Proven 5y ago
> Not AI yet but it shows how the economy could be centrally planned using technology. Nonsense. Hayek explained why that can't work: https://en.wikipedia.org/wiki/The_Fatal_Conceit https://en.wikipedia.org/wiki/The_Fatal_Conceit Of course, it can be planned - Lenin and Stalin showed that. Just make an AI that emulates those two geniuses. But the results would be equally great like they were in Soviet Russia or Mao's China. Why would anyone in a centrally planned economy work beyond the bare minimum needed to survive? It's hilarious that someone has to call you out on that. HN... > Pinochet's coup ended the experiment. I won't say that the coup was great, but it likely did less damage to the people than Cybersyn would have done.
- sudosysgen 5y ago
  Hayek did not, actually. His argument for it can't work but it can work using markets assumes P=NP and that humans are capable of running algorithms that computers can't, but only when they act as perfectly self interested rational actors.
  - betwixthewires 5y ago
    It does not assume P=NP as far as I can tell, unless you understand something I've missed? I'd be very interested in an explanation for how a market assumes P=NP, if I got one I'd basically be done with the concept of markets because I do not believe P=NP. A market economy is a distributed network, a self healing network and a self organizing network that optimizes itself for resource distribution, an emergent property of human populations with asymmetric distribution. The network itself runs algorithms much more efficiently than a centrally planned economy which does not have these traits. A sufficiently powerful AI could perform as well as a market economy, but it would be redundant and have other effects, such as taking agency from the benefactors of the economy. I don't know that it could outperform a market economy, it's possible that it could but so far I'm not sure.
    - sudosysgen 5y ago
      The problem of maximizing your self-interest in a market is general enough that finding a solution to it can require solving an NP-hard problem. This is actually true, real financial problems are NP-hard. The market does not optimize for resource distribution, it optimizes for profit. It is tyrannical in that it removes your agency, as a member of the market you have no other choice but to optimize for profit in many important situations. This is already dysfunctional enough to completely destroy a society, so we have to implement fictions like IP and regulations to tame the beast. As far as central planning goes it's certainly possible to plan an economy while allowing people to choose their jobs and start small companies. A sufficiently advanced AI would inevitably be more efficient, simply releasing all IP restrictions, all binning that is not necessary, ending all unproductive landlordism, and the compound growth from the lack of crises would do it. Now you could be opposed to it from an ideological point of view, but no matter what you're misstating Hayek's point, as he contends that it is not, actually, possible to perform the economic calculation outside of markets, due to computing brain magic of humans only when they act that way. Also, the mere principle that a market can run the economic calculations more efficiently than another computer is a violation of the Church-Turing hypothesis. There is no machine that we know of that can do any computation with better complexity than a Turing machine, save for quantum computing.

Allende tried something similar in Chile with project Cybersyn. Not AI yet but it shows how the economy could be centrally planned using technology. Shame that Pinochet's coup ended the experiment.

nradov 5y ago

There's no reason to think it would have produced better results than a free market economy.

dandanua 5y ago
The central planning will always produce better results, but only if you know the optimal strategy. Since it's impossible to know the optimal strategy a free market is a better solution in practice. Until a sufficiently strong AI arrives.
Shmebulock 5y ago
There are potentially plausible reasons such as that a free economy system could take longer to achieve an efficient market equilibrium compared to a centrally planned system.
- nradov 5y ago
  There is no such thing as a market equilibrium. The real world is constantly in flux.
sudosysgen 5y ago
There are dozens of reasons. Free markets have deduplication of labour, concepts like patents and IP that are inefficient are necessary, there are economic crises that wreck compound growth in the long term, there are issues of inequality, humans may be lazy and not attempt to allocate their capital in the most appropriate way (see index funds), socially useful endeavors may not be profitable, etc... But central planning is insanely hard, so it's not easy. That said, the USSR which literally used pen and paper for planning was the #2 economy in the world, so it clearly has some potential. Now there can be other reasons to not want planning.
- kolinko 5y ago
  #2 economy per capita, or in absolute numbers? I'm quite sure western nations had better economies when you adjust for each country's size.
  - sudosysgen 5y ago
    In absolute numbers. But planning economies becomes so much more difficult at scale, though if we looked at the communist country with the highest per capita economy we would still see numbers that are middle of the pack.
- slibhb 5y ago
  > There are dozens of reasons. Free markets have deduplication of labour, concepts like patents and IP that are inefficient are necessary, there are economic crises that wreck compound growth in the long term, there are issues of inequality, humans may be lazy and not attempt to allocate their capital in the most appropriate way (see index funds), socially useful endeavors may not be profitable, etc... There's no reason to think that economic crises and inequality would be absent in a planned economy.
  - sudosysgen 5y ago
    Of course there are. If you have good knowledge of the economy and of production mechanisms you can simply not do anything that could cause a crash. The issue is getting the knowledge to behind with, obviously. Inequality is necessary to some level but empirically it's possible to make it much smaller. Empirically the USSR had a single economic crisis without exogenous cause which was caused by incorrect accounting of agricultural production at its heart.
    - deleted 5y ago
      [deleted]
    - slibhb 5y ago
      > If you have good knowledge of the economy and of production mechanisms you can simply not do anything that could cause a crash But we don't have that knowledge. Economists disagree on many foundational questions. At some point, economics shades into psychology and we certainly don't have theories that predict human behavior. I don't discount the possibility that knowledge can help economies run more smoothly but you're understating the difficulty here. > Empirically the USSR had a single economic crisis without exogenous cause which was caused by incorrect accounting of agricultural production at its heart. The idea that the USSR had one economic crisis is a bizarre joke. The only way you can justify this comment is to ignore all the shortages and poverty and make some tortured semantic argument about what constitutes a "crisis". Empirically speaking, free markets trounced centrally planned economies in the 20th century. If you can't recognize that, I'm not sure why anyone would take you seriously.
SiempreViernes 5y ago
So long as a monopolistic centrally planned company acts on a free market do you consider your point unchallenged, or does the fact that the free markets tend to become dominated by large centrally planned corporations cause some tension?
pietrovismara 5y ago
There's no reason to think a free market economy is the single best solution we could ever hope to stumble upon. We keep evolving, we will evolve out of the "free" market economy as well.

lebuffon 5y ago

Was it actually Pinochet who masterminded the coup? ;-)

Proven 5y ago

> Not AI yet but it shows how the economy could be centrally planned using technology. Nonsense. Hayek explained why that can't work: https://en.wikipedia.org/wiki/The_Fatal_Conceit https://en.wikipedia.org/wiki/The_Fatal_Conceit Of course, it can be planned - Lenin and Stalin showed that. Just make an AI that emulates those two geniuses. But the results would be equally great like they were in Soviet Russia or Mao's China. Why would anyone in a centrally planned economy work beyond the bare minimum needed to survive? It's hilarious that someone has to call you out on that. HN... > Pinochet's coup ended the experiment. I won't say that the coup was great, but it likely did less damage to the people than Cybersyn would have done.

sudosysgen 5y ago
Hayek did not, actually. His argument for it can't work but it can work using markets assumes P=NP and that humans are capable of running algorithms that computers can't, but only when they act as perfectly self interested rational actors.
- betwixthewires 5y ago
  It does not assume P=NP as far as I can tell, unless you understand something I've missed? I'd be very interested in an explanation for how a market assumes P=NP, if I got one I'd basically be done with the concept of markets because I do not believe P=NP. A market economy is a distributed network, a self healing network and a self organizing network that optimizes itself for resource distribution, an emergent property of human populations with asymmetric distribution. The network itself runs algorithms much more efficiently than a centrally planned economy which does not have these traits. A sufficiently powerful AI could perform as well as a market economy, but it would be redundant and have other effects, such as taking agency from the benefactors of the economy. I don't know that it could outperform a market economy, it's possible that it could but so far I'm not sure.
  - sudosysgen 5y ago
    The problem of maximizing your self-interest in a market is general enough that finding a solution to it can require solving an NP-hard problem. This is actually true, real financial problems are NP-hard. The market does not optimize for resource distribution, it optimizes for profit. It is tyrannical in that it removes your agency, as a member of the market you have no other choice but to optimize for profit in many important situations. This is already dysfunctional enough to completely destroy a society, so we have to implement fictions like IP and regulations to tame the beast. As far as central planning goes it's certainly possible to plan an economy while allowing people to choose their jobs and start small companies. A sufficiently advanced AI would inevitably be more efficient, simply releasing all IP restrictions, all binning that is not necessary, ending all unproductive landlordism, and the compound growth from the lack of crises would do it. Now you could be opposed to it from an ideological point of view, but no matter what you're misstating Hayek's point, as he contends that it is not, actually, possible to perform the economic calculation outside of markets, due to computing brain magic of humans only when they act that way. Also, the mere principle that a market can run the economic calculations more efficiently than another computer is a violation of the Church-Turing hypothesis. There is no machine that we know of that can do any computation with better complexity than a Turing machine, save for quantum computing.