Shortform

Dean Valentine

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You don't hear much about the economic calculation problem anymore, because "we lack a big computer for performing economic calculations" was always an extremely absurd reason to dislike communism. The real problem with central planning is that most of the time the central planner is a dictator who has no incentive to run anything well in the first place, and gets selected by ruthlessness from a pool of existing apparatchiks, and gets paranoid about stability and goes on political purges.

What are some other, modern, "autistic" explanations for social dysfunction? Cases where there's an abstract economic or sociological argument about why certain policy/command structures are bad, which are mostly rationalizations designed to fit obviously correct conclusions into an existing field that wouldn't accept them in their normal format?

We have large centralized companies. For better or worse those companies don't use big computers to make economic calculations that output the company decisions at the top level.

Our political system also doesn't use big computer models to decide on economic policy. Before we had the computational capacity we might have thought that we will do that once we have it, but it turns out we don't.

8Zac Hatfield-Dodds3y

I agree with your characterization of the problem with central planning, and that we don't hear much about the economic calculation problem anymore, but... "we lack a big computer for performing economic calculations" was not an absurd reason to dislike communism, it was literally true. All digital computers ever possessed by or within the Soviet Union had, in total, less FLOP/s than a single A100 GPU; it's harder to get numbers for memory but the ratio is pretty stable over time. Their techniques were also enormously less efficient than modern optimization software (MILP, SMT, etc. etc.); in benchmarks this is a bigger deal than hardware progress. Amazon routinely solves planning problems which were fundamentally intractable for any 20th century government, and has enormously more data with which to solve them. That said, I think the real real problem with central planning is that it's... central. The price mechanism plus decentralized decisionmaking turns out to be a fantastic combination for eliciting (and arguably developing) preferences, and once you get past problems like "almost everyone is starving because our economy was based on subsistence agriculture and then wrecked by invasion" that can be solved by "grow grain, make steel, pour concrete" you'd still be screwed even if your socialist central planners were implausibly competent and benevolent. You can get around that somewhat by allowing markets (post-Deng China), or elicit preference with 'shadow prices' (a regular cause of purges among Soviet economists), but in practice you keep running into the problems caused the ways that dictators take and keep power.