dagblog - Comments for "Capitalism"

There seems to be an

Peter Schwartz — Sat, 24 Dec 2011 21:34:19 +0000

There seems to be an assumption here that capitalism should be done away with, perhaps because Dan's description is so damning, though he ends with suggestions for "changing" it.

My question is, would reforming it be a pretty good outcome, even enough?

Or has it "devolved" to the point where there's no future for it except downward?

What if we could reform society to a point where unemployment was around 3%, inflation the same, upward mobility was the rule, unions were strong, plenty of manufacturing...

IOW, what if we could turn back the clock to the early 1960s, minus Vietnam, minus trashing the environment, minus the horrid racism, etc?

Would that adequately fix capitalism?

This would certainly seem to

DF — Wed, 14 Dec 2011 19:23:33 +0000

In reply to Right, but the start-ups

This would certainly seem to be a problem. Executive power and compensation are both much higher here than in successful competitors like Germany and Japan. It used to be better here in those respects. How do we get that back?

I don't know if cynernetics

DF — Wed, 14 Dec 2011 19:02:57 +0000

In reply to Interesting. I like the

I don't know if cynernetics is necessarily even applicable to Stalinist central planning, but I do think it can be and is applied to other kinds of economic problems. California's ISO is one such example. Of course, it also reflects an attempt to grapple with the reality of natural monopoly and isn't necessarily the most economic solution.

Interesting. I like the

Michael Wolraich — Tue, 13 Dec 2011 23:25:53 +0000

In reply to Allende tried it.

Interesting. I like the detail about the seven swivel chairs. Without knowing much about the project, I would imagine that private sector operations software has probably become more sophisticated than this system.

But let's play it out. Suppose you developed a perfect logistical system capable of managing a centralized economy with maximum efficiency. You would avoid catastrophic mistakes like the Great Leap Forward and could probably limit corruption, but I don't think that you would avoid the failure of innovation and industriousness associated with centralized economies. Unless your system had true artificial intelligence.

Right, but the start-ups

Michael Wolraich — Tue, 13 Dec 2011 23:08:26 +0000

In reply to Another possible model is the

Right, but the start-ups generally seek investment for the simple reason that most employees don't have the capital to finance expansion.

I don't think think that we can realistically eliminate capital investment, but we can certainly reduce the executive power associated with capital investment in modern corporations.

And then, of course, there's

Verified Atheist — Tue, 13 Dec 2011 21:08:27 +0000

In reply to Ah, yes. I expect that

And then, of course, there's the maxim:

To err is human; to really foul things up requires a computer.

We can see some evidence of that in recent market fluctuations traced back to computerized trading.

Ah, yes. I expect that

DF — Tue, 13 Dec 2011 20:48:10 +0000

In reply to I'm referring to a phenomenon

Ah, yes. I expect that you're right about that.

from the link above to

Elusive Trope — Tue, 13 Dec 2011 20:40:59 +0000

In reply to I'm curious as to which

from the link above to Complexity Economics - a key question is what calculations are used, based on what model of the way the world (inc. economics) works.

Brian Arthur, Steven N. Durlauf, and David A. Lane describe several features of complex systems that deserve greater attention in economics

Dispersed interaction—The economy has interaction between many dispersed, heterogeneous, agents. The action of any given agent depends upon the anticipated actions of other agents and on the aggregate state of the economy.

No global controller—Controls are provided by mechanisms of competition and coordination between agents. Economic actions are mediated by legal institutions, assigned roles, and shifting associations. No global entity controls interactions. Traditionally, a fictitious auctioneer has appeared in some mathematical analyses of general equilibrium models, although nobody claimed any descriptive accuracy for such models. Traditionally, many mainstream models have imposed constraints, such as requiring that budgets be balanced, and such constraints are avoided in complexity economics.

Cross-cutting hierarchical organization—The economy has many levels of organization and interaction. Units at any given level behaviors, actions, strategies, products typically serve as "building blocks" for constructing units at the next higher level. The overall organization is more than hierarchical, with many sorts of tangling interactions (associations, channels of communication) across levels.

Ongoing adaptation—Behaviors, actions, strategies, and products are revised frequently as the individual agents accumulate experience.

Novelty niches—Such niches are associated with new markets, new technologies, new behaviors, and new institutions. The very act of filling a niche may provide new niches. The result is ongoing novelty.

Out-of-equilibrium dynamics—Because new niches, new potentials, new possibilities, are continually created, the economy functions without attaining any optimum or global equilibrium. Improvements occur regularly.

I'm referring to a phenomenon

Verified Atheist — Tue, 13 Dec 2011 20:36:55 +0000

In reply to I'm curious as to which

I'm referring to a phenomenon I frequently see in computer science circles where outsiders are concerned that computers won't get something right, and are not consoled by the fact that the computers will almost definitely do better than the humans they would replace. For example, in the near future, expect to see computers driving vehicles of various kinds. Ultimately, there will be a crash caused by a logical error in the code behind this new wonder. I expect that when that happens, there will be much hand-wringing, and most of those wringing their hands will fail to appreciate the overall reduced accident rate (obviously, I'm making an assumption the accident rate will be reduced).

Similarly, while I have no doubt that computers will be able to plan economies better than human planners, they will make mistakes, and I expect that critics will dwell on those mistakes.

I'm curious as to which

DF — Tue, 13 Dec 2011 20:28:25 +0000

In reply to Wow, interesting bit of

I'm curious as to which limitations you refer. If, for example, you're referring to limitations of central planning as implied by neoclassical economic theory, then I would be quick to point out that we are apparently still trying to run things based on models that require human beings have 100% information awareness, among other superhuman abilities usually attributed to Homo economicus. It's not so crazy to think that market efficiency can actually be improved by leveraging centralized calculations, especially if that has the effect of increasing actual information flow.