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There are dozens of reasons. Free markets have deduplication of labour, concepts like patents and IP that are inefficient are necessary, there are economic cris

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.
    - sudosysgen 5y ago
      I mean knowledge of the real economy. What materials there are and what is done with it. That's all you need in a planned economy to avoid crises. I said that the USSR had one economic crisis that wasn't due to exogenous circumstances. Which is true. I agree that free markets outperformed them. I'm saying there is clearly potential for improvement since the USSR was so dysfunctional and was planned with pen and paper.
      - nradov 5y ago
        There is no way to gain accurate, detailed knowledge of the real economy. It has always been impossible. That's one of several reasons why economic central planning is stupid.
        sudosysgen 5y ago
        This is stupid. We can definitely do that, even today, with basic computer technology.
- lucian1900 5y ago
  The USSR was unaffected by the Great Depression, unlike all capitalist countries. It’s because it used planning for use instead of markets for profit.
  - lumost 5y ago
    The USSR didn't have the great depression, but they did have the HoloDomor or terror famine of Ukraine between 1932 and 1933 and the wider Soviet Famine of that period. The history of the famine later went on to inspire the book Animal Farm and were a pure artifact of the central planning economy forcing the export of the very food required to feed millions of people. https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%9333 https://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%93...
    - sudosysgen 5y ago
      Yes, the Soviet famines were due to erroneous data due to dysfunctional bureacracies. Which is exactly why "pen and paper" are an issue.
      - lumost 5y ago
        Calling the famine an issue of erroneous data does a disservice to the victims. Millions of people don't starve while having their food confiscated at gun point due to an accounting error.
        sudosysgen 5y ago
        It's the proximate cause. As we all know it had horrible effects. Had the USSR been able to accurately measure food production it wouldn't have happened, so it is indeed the proximal cause.
        betwixthewires 5y ago
        The interesting thing about market economies is that the economy itself measures the food and distributes it in a maximally efficient manner when left unmolested, no central planner needed. Distributed economies will always be more efficient than planned economies, because everyone on a distributed economy participates in the cognitive load of measuring and distributing resources, so the network has more processing power and less latency than a centrally planned economy.
aaronchall 5y ago
At its highest, relative to the USA, USSR per capita gdp was only one third that of the USA. Not that impressive, even if you trust their numbers.
- sudosysgen 5y ago
  The USSR never published a GDP figure. It couldn't, because GDP makes no sense without a market. But yes, the USSR as a whole had a third of the US's average GDP. I agree, it was less than the US. The thing that is surprising is that they got there by planning an economy with pen and paper, which is insane to me.
  - aaronchall 5y ago
    I don't know how it's possible, but nearly every sentence you wrote is completely wrong.
    - sudosysgen 5y ago
      I made a typo which I corrected (s/world/US/), other than that I don't see anything wrong.
      - lumost 5y ago
        A central planning economy requires calculating desired outputs and required inputs through multiple layers of a supply chain. The resultant outputs through each layer of the economy, exports, and imports have a direct value that was in fact measured in the soviet currency of Ruble's - these Ruble's could be exchanged for dollars and provide a useful GDP figure in any desired currency. The basket of goods a given amount of these Ruble's could buy internally vs. their dollar equivalent elsewhere also provides a reasonable measure of Purchasing Power Parity. One can also bypass the production component and measure GDP in terms of the incomes in Ruble's paid to Soviet workers in combination with the export/import figures to arrive at a reasonable estimate.
        5y ago
deleted 5y ago
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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.
  - sudosysgen 5y ago
    I mean knowledge of the real economy. What materials there are and what is done with it. That's all you need in a planned economy to avoid crises. I said that the USSR had one economic crisis that wasn't due to exogenous circumstances. Which is true. I agree that free markets outperformed them. I'm saying there is clearly potential for improvement since the USSR was so dysfunctional and was planned with pen and paper.
    - nradov 5y ago
      There is no way to gain accurate, detailed knowledge of the real economy. It has always been impossible. That's one of several reasons why economic central planning is stupid.
      - sudosysgen 5y ago
        This is stupid. We can definitely do that, even today, with basic computer technology.
lucian1900 5y ago
The USSR was unaffected by the Great Depression, unlike all capitalist countries. It’s because it used planning for use instead of markets for profit.
- lumost 5y ago
  The USSR didn't have the great depression, but they did have the HoloDomor or terror famine of Ukraine between 1932 and 1933 and the wider Soviet Famine of that period. The history of the famine later went on to inspire the book Animal Farm and were a pure artifact of the central planning economy forcing the export of the very food required to feed millions of people. https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%9333 https://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%93...
  - sudosysgen 5y ago
    Yes, the Soviet famines were due to erroneous data due to dysfunctional bureacracies. Which is exactly why "pen and paper" are an issue.
    - lumost 5y ago
      Calling the famine an issue of erroneous data does a disservice to the victims. Millions of people don't starve while having their food confiscated at gun point due to an accounting error.
      - sudosysgen 5y ago
        It's the proximate cause. As we all know it had horrible effects. Had the USSR been able to accurately measure food production it wouldn't have happened, so it is indeed the proximal cause.
        betwixthewires 5y ago
        The interesting thing about market economies is that the economy itself measures the food and distributes it in a maximally efficient manner when left unmolested, no central planner needed. Distributed economies will always be more efficient than planned economies, because everyone on a distributed economy participates in the cognitive load of measuring and distributing resources, so the network has more processing power and less latency than a centrally planned economy.

aaronchall 5y ago

At its highest, relative to the USA, USSR per capita gdp was only one third that of the USA. Not that impressive, even if you trust their numbers.

sudosysgen 5y ago
The USSR never published a GDP figure. It couldn't, because GDP makes no sense without a market. But yes, the USSR as a whole had a third of the US's average GDP. I agree, it was less than the US. The thing that is surprising is that they got there by planning an economy with pen and paper, which is insane to me.
- aaronchall 5y ago
  I don't know how it's possible, but nearly every sentence you wrote is completely wrong.
  - sudosysgen 5y ago
    I made a typo which I corrected (s/world/US/), other than that I don't see anything wrong.
    - lumost 5y ago
      A central planning economy requires calculating desired outputs and required inputs through multiple layers of a supply chain. The resultant outputs through each layer of the economy, exports, and imports have a direct value that was in fact measured in the soviet currency of Ruble's - these Ruble's could be exchanged for dollars and provide a useful GDP figure in any desired currency. The basket of goods a given amount of these Ruble's could buy internally vs. their dollar equivalent elsewhere also provides a reasonable measure of Purchasing Power Parity. One can also bypass the production component and measure GDP in terms of the incomes in Ruble's paid to Soviet workers in combination with the export/import figures to arrive at a reasonable estimate.
      - 5y ago

deleted 5y ago

[deleted]