5 ms·

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

by 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.

by slibhb 5y ago

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.