5 ms·

Central panning doesn't scale because of limits to economic knowledge and calculation. You can't possibly know enough about what everyone needs or wants in an e

by pitaj 5y ago

Central panning doesn't scale because of limits to economic knowledge and calculation. You can't possibly know enough about what everyone needs or wants in an economy. Even if you did, calculating resource allocation based on that is NP.

Robotbeat 5y ago
We definitely do broad-strokes central planning in the US and every other developed country with tax system design, social support systems, and industrial policy. The Soviet Union sucked, but it lasted an extremely long time. The moral of the story is central planning kinda does work, just not very well if you do too much of it.
- sfink 5y ago
  I think it's more that you need layers. A centrally planned layer of regulation and safety nets that provide a base level to keep things running (and people alive), but without the cost and inefficiency of trying to control everything, and then a more efficient, free market–like layer on top that relies on the lower layer to provide the "free" in "free market". I believe it would be more productive to argue about where the layer boundaries should be, rather than endlessly arguing about whether one or the other layer should even exist. (Because they'll both always exist. People will help each other out even in a free-for-all; and black markets will always come into existence in rigid, fully-planned economies.)
- WC3w6pXxgGd 5y ago
  > The Soviet Union sucked, but it lasted an extremely long time. Less than a century is not "an extremely long time," and its citizens majorly suffered under the central planning. There was nothing successful about the Soviet Union.
goodpoint 5y ago
People constantly forget that large multinationals like Amazon are bigger that many countries, are purely authoritarian structures and work as 100% centralized economies. > Central panning doesn't scale On the contrary, it scaled pretty well in China and in Soviet Russia, leading to the two cases of the fastest economical growth on the planet. The problem is not scalability. The problem is that dictatorships (both countries and private companies) exist to benefit those in power. When push comes to shove everybody else is expendable.
- pitaj 5y ago
  > large multinationals like Amazon I don't know about the internal workings of Amazon specifically, but many corporations are set up as hierarchical "business units" that each operate as separate companies within: selling their products and services within the company. There's still a market, not everything is determined centrally. > On the contrary, it scaled pretty well in China and in Soviet Russia, leading to the two cases of the fastest economical growth on the planet. The problem is not scalability. China grew much faster after it instituted market reforms. I'm not as familiar with Soviet Russia, but I'd be surprised if it grew faster than similar market-based countries during the same time period.
  - archarios 5y ago
    Sears mostly collapsed because they decided to make their internal departments independent competing companies. The departments acted more in their own interests rather than in the interests of the whole company...
  - int_19h 5y ago
    Soviet Russia actually had to reintroduce markets (https://en.wikipedia.org/wiki/New_Economic_Policy https://en.wikipedia.org/wiki/New_Economic_Policy) to dig itself out of the economic hole caused by the hyper-centralized planning of "military communism".
  - goodpoint 5y ago
    > but many corporations are set up as hierarchical "business units" that each operate as separate companies within The overwhelming majority of companies, including Amazon, does not allow different units, departments or teams to compete with each other by providing the same service. Essentially each BU or even team is a little monopolist.
- sradu 5y ago
  You must not be from a former communist country. The system worked for two-three decades during the initial industrialization phase. When that phase ended growth was hard to find (the whole system was based around factories and moving villagers to cities). That's when the numbers started going down and the system started faking numbers to give the appearance that all is well and nobody could disagree with them. At a country level (not talking about Amazon) these systems are fragile and don't handle volatility well. Re: Amazon - you can't compare countries with private corporations.
kelseyfrog 5y ago
How are the current economic agents solving the NP-hard problem of economy? It seems like they are are just as incapable as a computer (assuming the substrate independence of computation).

by pitaj 5y ago

Robotbeat 5y ago

We definitely do broad-strokes central planning in the US and every other developed country with tax system design, social support systems, and industrial policy. The Soviet Union sucked, but it lasted an extremely long time. The moral of the story is central planning kinda does work, just not very well if you do too much of it.

sfink 5y ago
I think it's more that you need layers. A centrally planned layer of regulation and safety nets that provide a base level to keep things running (and people alive), but without the cost and inefficiency of trying to control everything, and then a more efficient, free market–like layer on top that relies on the lower layer to provide the "free" in "free market". I believe it would be more productive to argue about where the layer boundaries should be, rather than endlessly arguing about whether one or the other layer should even exist. (Because they'll both always exist. People will help each other out even in a free-for-all; and black markets will always come into existence in rigid, fully-planned economies.)
WC3w6pXxgGd 5y ago
> The Soviet Union sucked, but it lasted an extremely long time. Less than a century is not "an extremely long time," and its citizens majorly suffered under the central planning. There was nothing successful about the Soviet Union.

goodpoint 5y ago

People constantly forget that large multinationals like Amazon are bigger that many countries, are purely authoritarian structures and work as 100% centralized economies. > Central panning doesn't scale On the contrary, it scaled pretty well in China and in Soviet Russia, leading to the two cases of the fastest economical growth on the planet. The problem is not scalability. The problem is that dictatorships (both countries and private companies) exist to benefit those in power. When push comes to shove everybody else is expendable.

pitaj 5y ago
> large multinationals like Amazon I don't know about the internal workings of Amazon specifically, but many corporations are set up as hierarchical "business units" that each operate as separate companies within: selling their products and services within the company. There's still a market, not everything is determined centrally. > On the contrary, it scaled pretty well in China and in Soviet Russia, leading to the two cases of the fastest economical growth on the planet. The problem is not scalability. China grew much faster after it instituted market reforms. I'm not as familiar with Soviet Russia, but I'd be surprised if it grew faster than similar market-based countries during the same time period.
- archarios 5y ago
  Sears mostly collapsed because they decided to make their internal departments independent competing companies. The departments acted more in their own interests rather than in the interests of the whole company...
- int_19h 5y ago
  Soviet Russia actually had to reintroduce markets (https://en.wikipedia.org/wiki/New_Economic_Policy https://en.wikipedia.org/wiki/New_Economic_Policy) to dig itself out of the economic hole caused by the hyper-centralized planning of "military communism".
- goodpoint 5y ago
  > but many corporations are set up as hierarchical "business units" that each operate as separate companies within The overwhelming majority of companies, including Amazon, does not allow different units, departments or teams to compete with each other by providing the same service. Essentially each BU or even team is a little monopolist.
sradu 5y ago
You must not be from a former communist country. The system worked for two-three decades during the initial industrialization phase. When that phase ended growth was hard to find (the whole system was based around factories and moving villagers to cities). That's when the numbers started going down and the system started faking numbers to give the appearance that all is well and nobody could disagree with them. At a country level (not talking about Amazon) these systems are fragile and don't handle volatility well. Re: Amazon - you can't compare countries with private corporations.

kelseyfrog 5y ago

How are the current economic agents solving the NP-hard problem of economy? It seems like they are are just as incapable as a computer (assuming the substrate independence of computation).