331–340 of 377 posts
Those are great points! Another related law is from queuing theory: waiting time goes to infinity when utilization approaches 100%. You need your processes/machines/engineers to have some slack otherwise some tasks will wait forever.
Slack __or__ lower priority tasks.
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I don’t think it’s smart to proactively back track without being very careful. One thing that’s needed is for corporate death to be allowed to occur. Right now the downsides of risky behavior is bailed out for large enough risk. Then the companies that fail aren’t robust and the ones that don’t are but bailouts let non robust companies keep going. Otherwise “robustness” is a property without a measure which means tha…
Socialized healthcare seems to kind of work in many developed economies - where does it struggle and by what metrics regarding the health outcomes?
Here in BC, we have (mandatory) auto insurance provided by a crown corporation with a monopoly. The neo-liberal government before the current more socialist leadership hated it and wanted desperately to privatize car insurance. The problem is that ICBC is dearly loved by most residents here. There is a playbook for this problem.
They appointed a fairly incompetent civil servant to run things, and also started raiding the fund, to the tune of billions of dollars.
After about a decade of this, the company was a mess and nearly broke. They were forced to raise rates. The premier characterized the situation as a "dumpster fire" and editorials started popping up arguing for privatization.
That government was defeated, and the new leadership sorted it all out. Within a couple of years, drivers in BC were getting cheques in the mail because ICBC was making too much profit.
There are powerful interests very interested in getting a piece of healthcare in Canada, and some of the shenanigans you see here smell a lot like a set-up to make things become broken enough that the voters will demand privatization.
Just for one example, in the last few years staffing agencies have been hiring away nurses by offering higher wages and then contracting them back to the health authorities at ~$130/hr. This has cost billions to taxpayers and lead to great resentment within the regular staff.
Some folks somewhere allowed this to happen. Why?
I have a pet theory that the state-planned economies failed not because they were inefficient (as neoclassical economics claims), but rather because they attempted to be too efficient. They tried to exactly calculate which producer needs what inputs, what they should produce and when, and a little deviation from the plan caused big cascading failures. Free market is actually less efficient than direct control, but it…
On this side track to the discussion, I think that a major factor there was the location of decision making vs. where the action took place. Too much control was taken away from the location where it was needed. Centralization does that, in general, not just in those countries. There is a reason octopuses have sub-brains in their arms, and that some of our reflexes are controlled from neurons in the spine and not fro…
If you want to make an optimal decision, you need to make it in a centralized fashion, in some form. But that also gives you a single point of failure.
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I’m remembering reading once that cities are incredibly efficient in how they use resources (compared to the suburbs and rural areas, I guess), and, in light of your comment about waiting time, I’m realizing why now why they’re so unpleasant: constant resource contention.
On the other hand, in cities people are queueing up and talking at the bakery counter. While people in the suburbs are listening to the radio while driving to the bakery. I guess you choose to live where you feel most comfortable.
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This is exactly the subthread of this conversation I’m interested in. Is what you’re saying that capitalism breaks down resilience problems into efficiency problems? I think that’s an extremely motivating line of thinking, but I’ll have to do some head scratching to figure out exactly what to make of it. On one hand, I think capitalism is really good at resilience problems (efficient markets breed resilience, there’s…
To understand the effects, we first have to take a step back and recognize that efficiency and resiliency problems are both subsets of optimization problems. Efficiency is concerned with maximizing the ratio of inputs to outputs, and resiliency is concerned with minimizing risk. The fundamental tension arises because risk mitigation increases input costs. Over a given time horizon, there is an optimal amount of risk…
Head and hands need a mediator. The mediator between head and hands must be the heart! - movie "Metropolis"
> Goal: Distribution of labor and resources based upon the needs of society > Proxy: Capitalism > Strong version of Goodhart's law leads to: Massive wealth disparities (with incomes ranging from hundreds of dollars per year to hundreds of dollars per second), with more than a billion people living in poverty Please, show me a point in all human history when we have less than 90% global population living in poverty, p…
There is no such thing as capitalism. “The first countries to get rid of recurrent famine” were those that began using the steam engine and field enclosure. These are not “capitalism”, they are “capital”, in tge jargon of the economist Marx, or, in modern parlance, technology. All of the parts of the world that are not starving are not starving due to their adoption of a variety of technologies, both mechanical and b…
The raise of capitalism, that indeed is such thing meant the raise of systematic investment in capital. The idea of risk investing in a machine that might have a ROI was new, and the idea that the extra money earned with that investment could be used to invest even more was radically new.
Is rich to claim that "China and Russia also ended famine by 50s and 70s". Each of them had a massive and historical famines as late as 1932 and 1960, and the famine was directly caused by their economic system, proving central planning as a failure: it seem to work until the planners make some error. When that error happens sooner or later, the failure is catastrophical and generalized. In fact, China partially abandoned central planning to raise from poverty in the 70's you menction as the end of China famines, when Deng Xiaoping said that a socialist state could use the market economy without being capitalist (https://en.wikipedia.org/wiki/Socialist_market_economy). The new system means that China is politically socialist, but economically at least partially capitalist. For example, it meant that farms no longer were owned by the state. Politically they did some words juggling of "socialism", "market" and "capitalism", but in practice they just adopted capitalism as the main capital allocating force. Central planning was abandoned in the early 90s, and they adopted a western-like planning (fiscal and monetary policies, with some industrial policies).
You play dirty when comparing China and USSR with "many [unnamed] countries in the 3rd world". We are trying to discover the best way to build a society. You choose your best example, I choose mine, and lets compare. It's a low blow that you can choose your best example and pit it to my worst (and probably not even representative). It highlights that you are not after the truth. You just hate capitalism and need to manipulate reality to "win" internet arguments.
You are making some strawman argument here. You claim that capitalism doesn't innovate or take risks, something that nobody claims! Here goes an example: oil cracking was invented in Imperial Russia in 1891. But due to lack of capitalist institutions, it has no use for gasoline: it was a refinery dangerous waste. For 20 years they had an invention in a box that served no one. In 1913, the process was re-invented in the US and was immediately put to work towards humanity advance: gasoline was needed for cars. One invention calls for the other, all of them guided by profit seeking.
Capitalism doesn't claim to be the source of advances, inventions or discoveries. It claims to be the best known way to put those advances, regardless who made them, in use. It claims to be the best capital allocator in existence.
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I feel that a 100% efficient system is not resilient. Even minor disruptions in subsystems lead to major breakdowns. There’s no room to absorb shocks. We saw a drastic version of this during COVID-19 induced supply chain collapse. Car manufacturers had built near 100% just in time manufacturing that they couldn’t absorb chip shortages and it took them years to get back up. It also leaves no room for experimentation.…
This is coincides with my headcannon cause of the business cycle. 1. Firms compete 2. Firms either increase their efficiency or die 3. Efficient firms are more susceptible to shocks 4. Firm shutdown and closures are themselves shocks 5. Eventually the system reaches a critical point where the aggregate susceptibility is higher than the aggregate of shocks that will be generated by shutdowns and closures 6. Any extern…
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Indeed, the more efficient you become the more brittle you will be. You must depend upon the present being static and the future being perfectly predictable based on the events of the past. The present and the future don't merely need to be dependable within your own domain but also in the entire world. The flexibility necessary to succeed in a real world requires a certain level of inefficiency.
Interestingly, the same effect shows up in communications systems. The more efficient an error correction code (ie. the closer it approaches the Shannon Bound), the more catastrophically it fails when the channel capacity is reached. The "perfect" code delivers no errors up until the Shannon bound then meaningless garble (50% error rate) beyond the Shannon Bound. My point is that error correction codes have a precise…
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That solution is how it already works for the vast majority of companies in the US. “Too big to fail” is a meme that only applied to a tiny handful of companies during the financial crisis. Take a look at SVB for how fast a stalwart huge bank can implode with zero fucks given by the government.
By "zero fucks given by the government" do you mean the government got involved, effectively bought the bank, and took responsibility for 100% of deposits (most of which were the balances of startups, ie venture capital investments)?
What you’re thinking of is FDIC which is completely the opposite of a bailout for the bank. It’s a bailout for depositors (a huge portion of which were normal people). Arguments for the FDIC protecting people from keeping money in bad banks is a different argument, but it most certainly isn’t a bailout.
If you think going bankrupt and the FDIC seizing your company and wiping out shareholders is a bailout, you don’t know what a bailout is at all. That’s standard bankruptcy with an extra heavy boot on the throat from the government because they are ruthless about maintaining consumer confidence in the banking system.