3 ms·
Markets only solve the information problem, they don't address the decision problem (given unlimited knowledge of the present, how do we optimize the future?
by bcoates 12y ago
Markets only solve the information problem, they don't address the decision problem (given unlimited knowledge of the present, how do we optimize the future? -- an intractable problem) or the measurement problem (were the decisions we made in the past good or bad? What was the GDP in 2011? -- a very hard problem).
Applying markets to problems other than information problems won't work. Using markets to "deci[de] on a political party every few months and that political party makes decisions" isn't bad (just) because it's a one-party state, but because nobody--not even new Soviet man or Madison's government of angels--is actually competent to make the decisions that would be needed to make central planning work. Democratic or Plutocratic or Market-inspired or AI-based central planning all don't work because the problem is central planning, not the method of choosing the planners.