From: Lee Corbin (lcorbin@tsoft.com)
Date: Sun Nov 17 2002 - 10:19:40 MST
Anders writes
> > "Robert J. Bradbury" <bradbury@aeiveos.com> Wrote:
> >
> > There seems to be a fundamental assumption in the libertarian perspective
> > that there can *never* be a computer/algorithm sufficiently complex that
> > it can optimize both local and global conditions (i.e. squeeze the
> > waste and redundancy out of the economy).
One should keep in mind that "local and global conditions" are
a moving target in more ways than one---shortterm and longterm.
> > Given the Moore's Law advancement in computational capacity that will
> > soon shift over onto the nanotech based track giving us 1 cm^3 computers
> > with the capacity of 10^5 human minds -- I *really* have to question
> > whether local (personal) decisions will always trump global (planned)
> > decisions.
>
> OK, let us make a thought experiment. I have built the new Golem XV
> computer, a few cubic kilometers (see at the end for specs) of
> computronium able to simulate all of humanity and the goings on in the
> entire biosphere at a sufficient precision to give accurate predictions
> with a given level of precision for significantly long periods (say a
> year for detailed forecasts and a decade for more sketchy estimates)...
I don't disagree with your analysis, but Robert probably had something
much more modest in mind, with an eye toward how our economies over the
next two decades might be centrally controlled.
May I repost something by Jeff Davis in the "Socialism, again" thread
on November 3, that seems pertinent?
> One [info source] that I liked was by Robert Heilbroner, at:
>
> http://www.econlib.org/library/Enc/Socialism.html
>
> The Mises-Hayek argument met its most formidable
> counterargument in two brilliant articles by Oskar
> Lange...Lange set out to show that the planners would,
> in fact, have precisely the same information as that
> which guided a market economy. The information would
> be revealed as inventories of goods rose and fell,
> signaling either that supply was greater than demand
> or demand greater than supply.
Amazing. But then later your [Jeff's] excerpt says
> In 1982, to stimulate the production of gloves from
> moleskins, the Soviet government raised the price it
> was willing to pay for moleskins from twenty to fifty
> kopecks per pelt. Smelev and Popov noted:
>
> State purchases increased, and now all the
> distribution centers are filled with these pelts.
> Industry is unable to use them all, and they often rot
> in warehouses before they can be processed. The
> Ministry of Light Industry has already requested
> Goskomtsen [the State Committee on Prices] twice to
> lower prices, but "the question has not been decided"
> yet. This is not surprising. Its members are too busy
> to decide. They have no time: besides setting prices
> on these pelts, they have to keep track of another 24
> million prices. And how can they possibly know how
> much to lower the price today, so they won't have to
> raise it tomorrow?
What? Twenty-four million prices? Clearly this is
beyond the means of the most determined bureaucrats.
So the implication must be that with the help of
computers, the decisions could be made automatically.
But even updating the computers with new products
seems too formidable. Yes, if the inventories could
be on-line, I do see how a static economy might be
centrally controlled. But no economy is static.
Furthermore, how could the profit incentive be built-in?
Someone has to be highly motivated to notice that product
A could be used in place of B (for one example). The
free market depends on people wanting and needing money
so badly that they get very creative about this kind of
thing.
The last two paragraphs are just what I wrote back, also
on November 3. I'll conclude now with more some other
relevant quotes from Jeff's URL:
> This story speaks volumes about the problem of a
> centrally planned system. The crucial missing element
> is not so much "information," as Mises and Hayek
> argued, as it is the motivation to act on information.
> After all, the inventories of moleskins did tell the
> planners that their production was at first too low
> and then too high. What was missing was the
> willingness, better yet, the necessity, to respond to
> the signals of changing inventories. A capitalist firm
> responds to changing prices because failure to do so
> will cause it to lose money. A socialist ministry
> ignores changing inventories because bureaucrats learn
> that doing something is more likely to get them in
> trouble than doing nothing, unless doing nothing
> results in absolute disaster.
Anyway, Anders continues:
> Let's say we try to use it to run a planned economy. We
> try to make everybody equally well off in some material
> sense. We make an allocation scheme, and it predicts the
> outcome. OK, scheme 1 leads to a scarcity of food in
> Manhattan, so let's up the bread allocation there. Now
> scheme 2 leads to starvation in Chad....
Yes, but what do you say about Oskar Lange? He seems to
be tackling the problem at a higher level of abstraction
where perhaps an impossibility argument isn't so clear.
Lee
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