3 ms·
You are exactly right. They seek to maximize profits. Profits can only exist within a coherent system of prices. How can a central planner effectively determin
by aww_dang 3y ago
You are exactly right. They seek to maximize profits. Profits can only exist within a coherent system of prices.
How can a central planner effectively determine prices across an entire economy? Price fixing has historically been disastrous, from Diocletian to the USSR. This is literally the definition of the calculation problem.
Contrast this to politicians and bureaucrats who may have additional political incentives towards kickbacks, corruption or other, non-market inefficient practices.