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Is that true if the central planners had access to the digital data of Walmart, Costco, Target, Amazon, etc all at the same time? I wonder if the amount of dat

Is that true if the central planners had access to the digital data of Walmart, Costco, Target, Amazon, etc all at the same time? I wonder if the amount of data needed for efficient central planning is now here.

WalterBright 2y ago
Yes, it always applies. Even to monopoly pricing.
_heimdall 2y ago
The mistake make with such data is that it can predict the future. At best, if the data is fairly accurate and complete it is only a good indicator of the past. The fundamental flaw of central planning at scale is that a small number of people will sustainably predict the future well enough to plan better than if they let individuals make decisions for themselves.
roenxi 2y ago
Markets use prices to work out where supply and demand meet. Sellers control the lower bound (if the price is unacceptably low they can't stock the good), buyers control the upper bound (if the price is unacceptably high they can't buy the product). If upper > lower then there is a complex dance to work out what the price is going to be today. It doesn't matter how much data you scrape from sellers, you can only ever work out a lower bound price for goods. That isn't enough for even a super-intelligence to work out how much of that product is needed. You have to let a real market play out to figure out what prices should be. It isn't a question of processing more data from sellers before a centrally planned system can work, central planners literally can't have all the data until after the market's auctioning process has played out. You can make reasonable guesses, but the supermarkets already do that. The goods on the shelves don't appear by coincidence, a lot of thought goes into it. Central planning can only do that well or (usually) worse.
- WalterBright 2y ago
  Back in the Carter era, the DoE handed out gas allocations to gas stations. Their strategy was to allocate according to the pattern of sales from the previous year. Of course, this didn't work at all, and the country was a checkerboard of gluts and shortages. Central economic planning has proven to be inept at handling the chaotic reality of actual markets.
  - analognoise 2y ago
    That’s pretty clearly a data quality issue though; I don’t think this result necessarily holds in the case of better data. Besides that, we don’t even have “actual markets” - take a look at all the places we’ve extremely distorted things; farm subsidies, for example. Do we have more than enough food, and is it cheap enough? We’re already funding this stuff, and distorting the market - then playing pretend that it’s all fair competition by closing our eyes and saying “central planning doesn’t work”.
    - roenxi 2y ago
      1) A subsidy isn't central planning. A key feature of central planning is having a plan that the market participants don't mutually want to follow anyway [0]. A subsidy is the government interfering but as a market participant. There is a spectrum going from [free market] -> [some interference] -> [central planning]. 2) It wasn't a data quality issue. It doesn't matter how good the historic data is, they couldn't possibly have predicted future demand. Future demand isn't a function of past data. 3) If you think central planning is going to work, you're going to need an argument for why to have a meaningful conversation. At the moment you're claiming it fails due to data quality issues, but there is no evidence that the central planning failures are due data quality issues. Central planners are limited by the fact that the market-optimal price point for a product is unknown until after the market has cleared, and the market can't clear properly if supply is constrained by a central plan because there will be either a shortage or oversupply. That dynamic doesn't change by having better data, the problem is that the plan prevents the data needed from existing. [0] In theory I suppose you could have a central plan where you just copy Walmart's existing internal quarterly plan, tell Walmart to do that then don't enforce anything if the situation changes, but that'd be pretty pointless even by government bureaucracy standards.
dullcrisp 2y ago
Isn’t this the plot of Idiocracy?
indigo0086 2y ago
The network of central planners is astronomically smaller than individual companies acting on their own for their own success. A central planner wouldn't know how to begin to use all that data because their motivations would be to make the impossible reality rather than let the ecosystem of the market thrive. They can say that's what they want, but their day to day would be to control the economy as a whole.

WalterBright 2y ago

Yes, it always applies. Even to monopoly pricing.

_heimdall 2y ago

The mistake make with such data is that it can predict the future. At best, if the data is fairly accurate and complete it is only a good indicator of the past. The fundamental flaw of central planning at scale is that a small number of people will sustainably predict the future well enough to plan better than if they let individuals make decisions for themselves.

roenxi 2y ago

Markets use prices to work out where supply and demand meet. Sellers control the lower bound (if the price is unacceptably low they can't stock the good), buyers control the upper bound (if the price is unacceptably high they can't buy the product). If upper > lower then there is a complex dance to work out what the price is going to be today. It doesn't matter how much data you scrape from sellers, you can only ever work out a lower bound price for goods. That isn't enough for even a super-intelligence to work out how much of that product is needed. You have to let a real market play out to figure out what prices should be. It isn't a question of processing more data from sellers before a centrally planned system can work, central planners literally can't have all the data until after the market's auctioning process has played out. You can make reasonable guesses, but the supermarkets already do that. The goods on the shelves don't appear by coincidence, a lot of thought goes into it. Central planning can only do that well or (usually) worse.

WalterBright 2y ago
Back in the Carter era, the DoE handed out gas allocations to gas stations. Their strategy was to allocate according to the pattern of sales from the previous year. Of course, this didn't work at all, and the country was a checkerboard of gluts and shortages. Central economic planning has proven to be inept at handling the chaotic reality of actual markets.
- analognoise 2y ago
  That’s pretty clearly a data quality issue though; I don’t think this result necessarily holds in the case of better data. Besides that, we don’t even have “actual markets” - take a look at all the places we’ve extremely distorted things; farm subsidies, for example. Do we have more than enough food, and is it cheap enough? We’re already funding this stuff, and distorting the market - then playing pretend that it’s all fair competition by closing our eyes and saying “central planning doesn’t work”.
  - roenxi 2y ago
    1) A subsidy isn't central planning. A key feature of central planning is having a plan that the market participants don't mutually want to follow anyway [0]. A subsidy is the government interfering but as a market participant. There is a spectrum going from [free market] -> [some interference] -> [central planning]. 2) It wasn't a data quality issue. It doesn't matter how good the historic data is, they couldn't possibly have predicted future demand. Future demand isn't a function of past data. 3) If you think central planning is going to work, you're going to need an argument for why to have a meaningful conversation. At the moment you're claiming it fails due to data quality issues, but there is no evidence that the central planning failures are due data quality issues. Central planners are limited by the fact that the market-optimal price point for a product is unknown until after the market has cleared, and the market can't clear properly if supply is constrained by a central plan because there will be either a shortage or oversupply. That dynamic doesn't change by having better data, the problem is that the plan prevents the data needed from existing. [0] In theory I suppose you could have a central plan where you just copy Walmart's existing internal quarterly plan, tell Walmart to do that then don't enforce anything if the situation changes, but that'd be pretty pointless even by government bureaucracy standards.

dullcrisp 2y ago

Isn’t this the plot of Idiocracy?

indigo0086 2y ago

The network of central planners is astronomically smaller than individual companies acting on their own for their own success. A central planner wouldn't know how to begin to use all that data because their motivations would be to make the impossible reality rather than let the ecosystem of the market thrive. They can say that's what they want, but their day to day would be to control the economy as a whole.