[alienjr]

On the silly "inequality is getting worse" claim:

"Contrary to the author's claim that the rich are getting richer, not due to underlying economic trends, but by using their power and influence to enrich themselves, I have in this column more than once suggested that the real reason is the enormous expansion of the world supply of unskilled and semi-skilled labour brought about by falling transport costs and trade barriers. With globalization, a billion or more rural people in Asia could be recruited into the urban industrial sector and produce the tradeable goods that undersell the goods hitherto produced in the United States and Europe. Until this new Asian labour is wholly absorbed and its wages rise to Western levels, U.S. and European unskilled wages will remain depressed and the share of profits in value added will rise. Ironically, while this sharpens inequality in the West, it promotes equality on a world scale as Asian and eventually also African peoples are lifted out of misery." http://www.econlib.org/library/Columns/y2012/Jasayinequality...

+ Even if there exits market failures, we don't want to replace them with government failures, which are usually even worse.

[paganel]

Which is great for those Asian people, in the last 30 years alone around 500 million Chinese people have been lifted out of extreme poverty. Let that sink in, that's the entire population of present-day Europe.

But, as an Eastern European I'm of course biased. I grew up in the economy-controlled '80s when we were experiencing toilet paper shortages, among other things (question for the anti-free market people: how do you centralize the production of things like toilet paper? How do you decide how much toilet paper to make, in the absence of a free market?)

[alienjr]

"I grew up in the economy-controlled '80s"

Me too! I'm from Poland. And that's why I'm so sick of all those inteligentsia do-gooders who want to impose their own preferences on everybody else because they know better and this legitimizes them to orchestrate the society.

[bildung]

> But, as an Eastern European I'm of course biased. I grew up in the economy-controlled '80s when we were experiencing toilet paper shortages, among other things (question for the anti-free market people: how do you centralize the production of things like toilet paper? How do you decide how much toilet paper to make, in the absence of a free market?)

As Eastern Germany (where I grew up) was not experiencing toilet paper shortages in the '80s, I'd say the main source of the problem wasn't the planned economy per se, but other contributing factors.

Amartya Sen makes a strong case for authoritarianism being the culprit, as there are numerous examples of famines and shortages in market-regulated, but authoritarian economies (like the 1943 Bengal famine, where millions of people died).

[alienjr]

Nonsense, the entire era of Industrial Revolution happened during authoritarian governments. Not to mention the economic success of Hong Kong or Chile.

PS. Yes, there was huge shortage of toilet paper in Poland during 80's. Huge! My family was standing in the queues for 2-3h to get it.

[bildung]

> Nonsense, the entire era of Industrial Revolution happened during authoritarian governments.

And whole generations lived in misery during that period. I thought that's exactly what we were talking about?

> Not to mention the economic success of Hong Kong or Chile.

I don't know about Hong Kong, but in Chile the Chicago school free market era under Pinochet ended in the collapse of the economy in 1982.

[ZenoArrow]

> "question for the anti-free market people: how do you centralize the production of things like toilet paper? How do you decide how much toilet paper to make, in the absence of a free market?"

Why do you have to centralise it? You could split the task into regions. How many regions? Enough regions until it becomes efficient at measuring and responding to needs.

To use a phrase... think global, act local.

[paganel]

> Enough regions until it becomes efficient at measuring and responding to needs.

How do you respond to needs if it's all opaque? For example, for a city of 100,000 people how do you decide how many sheets of toilet paper you need? Or razor blades? Or tampons? I know it sounds all frivolous, but the lack of razor blades was mentioned even by Orwell in his "1984", and as for tampons, I first saw them after 1990, the central economy planners from my country had decided that cotton wool was good enough for women.

[TeMPOraL]

And how does the free market solve this problem? By overproducing the shit out of everything, letting it rot on the shelves and then throwing it away. This is the cost associated with the abundance of products - especially short-lived ones - in the stores.

Yes, in recent years the market learned to optimize, to run on supply lines with very little buffering at endpoints. Still - the producers get information about how much to make from the sales at endpoints. Why the same scheme should not be available to central planners? Does centralization somehow preclude from measuring at the endpoints?

Hell, if you really look at it, isn't the optimizations market learned basically central planning, but in the hands of private planners and not state ones?

[andrenth]

Because no central planner can have all the information about every aspect of the market in order to plan correctly. This is impossible not only because of the volume of information, but because the information in question is highly subjective (they amount to personal preferences). So the "optimization" has to happen in a distributed manner, with each agent taking in account his own preferences and the information available to him.

Finally, a centrally planned economy precludes the entrepreneurial function.

[ZenoArrow]

So you don't manage it centrally, you manage it regionally and monitor stock levels.

One item taken = one sale, so you have the same level of information to manage the economy with.

[ZenoArrow]

>"How do you respond to needs if it's all opaque? For example, for a city of 100,000 people how do you decide how many sheets of toilet paper you need? Or razor blades? Or tampons?"

You monitor stock levels.

The same functions that apply to a commercial enterprise would apply to a non-commercial one. You'd still have a 'merchandising department' monitoring stock levels, ensuring enough weeks of cover (based on usage trends), setting when to manufacture and how much, etc...

In addition, by having multiple sources of toilet roll you can temporarily boost the stock in one region if another region has a small surplus.

I'm sorry that you had to live through shortages, it's probably no consolation that the problems were caused by mismanagement, but from what I can see they aren't an intrinsic part of communism.

[bildung]

I was under the impression that Piketty et.al. showed pretty conclusively that a) inequality indeed got worse and b) it's a matter of policy, not globalization per se. The paper you linked predates the publication of Capital in the 21st century, so the author had no chance to react on those findings.

[alienjr]

No, Piketty showed that inequality is getting worse in the West. Inequality is getting smaller in global and it is an empirical fact. Anyhow, his theory has serious flaws: http://www.econlib.org/library/Columns/y2014/Jasaypython.htm...

[asgard1024]

> Inequality is getting smaller in global and it is an empirical fact.

I acknowledge that inequality is getting smaller between averages of different countries, but is it truly getting smaller between individuals (that's what actually matters)? I don't think we can ascertain that, because I think Piketty would have included the historical data if he had them for developing countries.

> Anyhow, his theory has serious flaws

If I understand the critiquing author's argument correctly - is he saying that facts stated in the Piketty's book contradict his own toy model? Maybe then his model is flawed for whatever reason, but that's not a flaw of Piketty's book.

[bildung]

> No, Piketty showed that inequality is getting worse in the West.

Yes, I know. I was alluding to the following sentence: "Until this new Asian labour is wholly absorbed and its wages rise to Western levels, U.S. and European unskilled wages will remain depressed and the share of profits in value added will rise." - The author here talks about inequality in the West.