| > The free market itself is a giant computation engine that solves the problem of economic planning No. This is the issue. Markets solve a different problem. If I like A better than B and you like B better than A, this has to be taken into account for the eventual solution to be Pareto-optimal. You would need to set prices for all of the hundreds of thousands of goods and services a modern economy produces, which requires access to an amount of information that no entity can possibly handle. It's not just computational power, it's a fundamentally intractable problem that is only solvable if you make wild assumptions. All of that only to get a solution at most as good as the market equilibrium. > The comparison is meaningless, as the Soviet Union and the US had vastly different starting conditions Come on, this is a total charade. Don't want to compare it to the US? How about Japan? Or any other first-world country of your choice? Or how about West and East Berlin? > Could it be that your views on the efficiency of central planing are more based on prejudices that looking at actual empirical data? Yes, I have priors, as we all do. I believe my priors are correctly adjusted given the available data. |
>You would need to set prices for all of the hundreds of thousands of goods and services a modern economy produces, which requires access to an amount of information that no entity can possibly handle. It's not just computational power, it's a fundamentally intractable problem that is only solvable if you make wild assumptions.
That just isn't how cybernetic planning was ever designed to work, so I agree with who you responded to that it's a case of only considering a naïve approach.
Almost all proposals have a consumer goods market - others have a functional equivalent. You let consumers compete to buy products, and in doing so you don't have to set the prices and predict what people like more - you just let them choose.
Markets under a capitalist system attempt to use prices on the other hand, by having the capitalist decide where to invest his capital for maximum return, to decide how things should be produced. This is a terribly inefficient solution computationally because you are going through hundreds of layers of indirection and noise, and actively hiding a lot of the relevant information. In doing so, most of the necessary information for production is constrained into low information price signals, which causes endless issues.
> Come on, this is a total charade. Don't want to compare it to the US? How about Japan? Or any other first-world country of your choice? Or how about West and East Berlin?
Firstly, you have to realize that the Soviets did not do cybernetic planning. They didn't continuously integrate realtime information or production and demand. They did their central planning in yearly increments using pen and paper. The USSR started off much worse than any first world country, even Japan
The fact that even though it was planned so poorly using such inefficient techniques and with such low responsitivity, and still managed to perform better than most of the world and compete with the best capitalist economies, is in my opinion a good signal that the advantages of central planning are considerable, even if with the horrible implementation of the Soviets, they were ultimately outbalanced by their issues.