Government planners developed a particular aesthetic obsession: they were frustrated by the untidy complexity of real human societies. FULL ARTICLE by Mike Reid
Source link: http://archive.mises.org/16151/seeing-like-a-state/
Seeing Like a State
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“Hayek debunks those intellectuals who think of the economy as a mathematical puzzle to be solved by a single mind capable of taking in all the information.”
How then is it that we can come up with ways to improve the economy? Part of this is due to science such as analyzing the role of: supply & demand, the division of labor, marginal utility, the advantages of technology, etc. Here, certain operations in the market can be rationalized. In addition, experience demonstrates the losses due to government intervention.
Yet when it comes to the fundamental determinants of economic development, these are best understood by ‘spontaneous order’. Our guides are then to avoid the negative consequences of interfering with that order. Thus we ought to avoid theft, fraud, and irresponsible behavior. The ultimate guide for economic development is then less a matter of science than of the Golden Rule. Here, one does not think as a state, but as an individual who attempts a moral existence.
Allen-
Improving the economy results from discontinuing attempts to “improve” it.
You’re talking about a multivariable system where most variables cannot be know or measured and are constantly changing, there are multiple causal relations, most of them unknown, and many altering even the known variables and that is chaotic. In short, an undecidable problem.
A hypercomputer could “solve it” but that’s akin to saying “I could solve it if I had god’s brain”
All in all, we are all caught in the economic calculation problem. It doesn’t just happen in socialist “economies” it happens all the time, continuously and forever (or there’s no more scarcity of anything).
Every person is attempting to “improve” the economy at every instant, creating plans and testing them over and over again. Central planning destroys this, is a lot more insensitive to individual needs to the point of making every economic decision arbitrary, including decisions about production, thus consuming capital and eventually decreasing productive output and quality.
This process is akin to optimizing a real-time distributed problem in a cloud and trying to attempt it with a supercomputer that can’t even take in all the necessary variables. And this analogy doesn’t even do justice to it.
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