Is growth in the financial sector good for the economy? • Hacker News Board

Re: Is growth in the financial sector good for the economy?

#41

Post by panic » Mon, Jul 20, 2015, 10:57 PM UTC

sillygeese wrote: post #36

fennecfoxen wrote: post #17

Earlier quoted context omitted.

The biggest problems with central planning were never quite as much about the lack of computing power, but more about the incentives that go with that power structure. Politically, the central planner gets to reward all his friends and punish his enemies and deprive them of resources and opportunities. Even aside from the obvious implications on political liberty, getting the opportunity to do business in that enviro…

Then there's the fact that no one can know what any given person wants to buy at a given time, and therefore central planning is doomed to failure because you can't centrally plan "the right" prices for everything, and then you'll end up vastly misallocating resources, and there will be widespread destitution ala Soviet Union. In conclusion, central planning ultimately just completely fucks up any economy. Check out…

So if 100% central planning results in a total catastrophe, then there should be no central planning at all, because any extent of central planning is harmful compared to less (or ultimately none at all).

I don't think your argument works. If I drink a swimming pool full of water, I will die. Does that mean I should drink no water at all?

Re: Is growth in the financial sector good for the economy?

#42

Post by danieltillett » Tue, Jul 21, 2015, 1:39 AM UTC

sillygeese wrote: post #36

fennecfoxen wrote: post #17

Earlier quoted context omitted.

The biggest problems with central planning were never quite as much about the lack of computing power, but more about the incentives that go with that power structure. Politically, the central planner gets to reward all his friends and punish his enemies and deprive them of resources and opportunities. Even aside from the obvious implications on political liberty, getting the opportunity to do business in that enviro…

Then there's the fact that no one can know what any given person wants to buy at a given time, and therefore central planning is doomed to failure because you can't centrally plan "the right" prices for everything, and then you'll end up vastly misallocating resources, and there will be widespread destitution ala Soviet Union. In conclusion, central planning ultimately just completely fucks up any economy. Check out…

This problem applies to a non-central planned economy too. Someone somewhere has to make a decision of what people want to buy and make it in advance of the item being purchased (hence inventory). This is why most business use central planning. If they get the planning wrong they lose money and potentially go out of business. The question is can this be scaled up now economy wide now that we have much more advanced computational tools to predict and react swiftly to demand changes. I don’t know :)

Re: Is growth in the financial sector good for the economy?

#43

Post by sillygeese » Tue, Jul 21, 2015, 4:18 AM UTC

panic wrote: post #41

sillygeese wrote: post #36

Earlier quoted context omitted.

Then there's the fact that no one can know what any given person wants to buy at a given time, and therefore central planning is doomed to failure because you can't centrally plan "the right" prices for everything, and then you'll end up vastly misallocating resources, and there will be widespread destitution ala Soviet Union. In conclusion, central planning ultimately just completely fucks up any economy. Check out…

So if 100% central planning results in a total catastrophe, then there should be no central planning at all, because any extent of central planning is harmful compared to less (or ultimately none at all). I don't think your argument works. If I drink a swimming pool full of water, I will die. Does that mean I should drink no water at all?

Maybe it was poorly phrased. Here's another attempt.

Any degree of central planning is harmful to us because: 1) it always represents an opportunity cost compared to people making choices themselves, and 2) the choices made by central planners are not made to benefit the masses (because otherwise they'd just let people make the choices themselves)

What would be the point of being in a position to make decisions for other people, if you were just going to do your best to benefit others, instead of yourself?

Re: Is growth in the financial sector good for the economy?

#44

Post by sillygeese » Tue, Jul 21, 2015, 4:22 AM UTC

danieltillett wrote: post #42

sillygeese wrote: post #36

Earlier quoted context omitted.

Then there's the fact that no one can know what any given person wants to buy at a given time, and therefore central planning is doomed to failure because you can't centrally plan "the right" prices for everything, and then you'll end up vastly misallocating resources, and there will be widespread destitution ala Soviet Union. In conclusion, central planning ultimately just completely fucks up any economy. Check out…

This problem applies to a non-central planned economy too. Someone somewhere has to make a decision of what people want to buy and make it in advance of the item being purchased (hence inventory). This is why most business use central planning. If they get the planning wrong they lose money and potentially go out of business. The question is can this be scaled up now economy wide now that we have much more advanced c…

However you might want to define "central planning", there's a massive difference. The business people are using their own money, but central planners use everyone else's.

Re: Is growth in the financial sector good for the economy?

#45

Post by danieltillett » Tue, Jul 21, 2015, 4:45 AM UTC

sillygeese wrote: post #44

danieltillett wrote: post #42

Earlier quoted context omitted.

This problem applies to a non-central planned economy too. Someone somewhere has to make a decision of what people want to buy and make it in advance of the item being purchased (hence inventory). This is why most business use central planning. If they get the planning wrong they lose money and potentially go out of business. The question is can this be scaled up now economy wide now that we have much more advanced c…

However you might want to define "central planning", there's a massive difference. The business people are using their own money, but central planners use everyone else's.

Actually most large businesses are using someone else's money - the shareholders. The same sort of agency problems that exist in centrally planned economies also exist in large public companies.

Re: Is growth in the financial sector good for the economy?

#46

Post by sillygeese » Tue, Jul 21, 2015, 9:54 AM UTC

danieltillett wrote: post #45

sillygeese wrote: post #44

Earlier quoted context omitted.

However you might want to define "central planning", there's a massive difference. The business people are using their own money, but central planners use everyone else's.

Actually most large businesses are using someone else's money - the shareholders. The same sort of agency problems that exist in centrally planned economies also exist in large public companies.

You got the point though, so it's kind of pointless to keep arguing, right? Whatever money is lost is someone's own money.

Re: Is growth in the financial sector good for the economy?

#47

Post by keso_77 » Tue, Jul 21, 2015, 11:12 AM UTC

TeMPOraL wrote: post #3

CmonDev wrote: post #2

Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.

There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.

I'm as leftist as they come and I'm against central planning. Bitcoin, removing gatekeepers, technologies that reduce/remove barriers to entry like 3d-printers, secure free-flowing information networks look much more promising for a future with empowered humans, free from debt and corporate/government overlords. Artificial scarcity, planned obsolescence and utter waste of resources both human and planetary could be solved if you combined tech like self-building machines, advanced recycling and permaculture principals.

Re: Is growth in the financial sector good for the economy?

#48

Post by TeMPOraL » Tue, Jul 21, 2015, 11:43 AM UTC

keso_77 wrote: post #47

TeMPOraL wrote: post #3

Earlier quoted context omitted.

There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.

I'm as leftist as they come and I'm against central planning. Bitcoin, removing gatekeepers, technologies that reduce/remove barriers to entry like 3d-printers, secure free-flowing information networks look much more promising for a future with empowered humans, free from debt and corporate/government overlords. Artificial scarcity, planned obsolescence and utter waste of resources both human and planetary could be s…

I don't consider myself leftist (or rightist or any -ist) at all, I try to evaluate all the concepts on their merits. At the time of writing my original comment it seemed to me that computer-based central planning could be a good solution for some problems. Responses here brought up some arguments that made me reconsider the extent to which such central planning could be successfully applied. Maybe inefficiency is a price worth paying for increased resiliency and ability to adapt to environment without explicit specification.

I'm definitely not buying into the principle that everything needs to be distributed, libre and democratic. There are too many obvious failure modes there. Empowering everyone is good, but empowering everyone to the point when a random nutjob can kill millions with a home-made bioweapon doesn't. Nor the coordination prolems like tragedy of commons, oh so present around us everywhere, and one of the primary reasons things are being regulated.

Re: Is growth in the financial sector good for the economy?

#49

Post by TeMPOraL » Tue, Jul 21, 2015, 11:45 AM UTC

rorykoehler wrote: post #40

TeMPOraL wrote: post #39

Earlier quoted context omitted.

I'm not sure about appeal to nature here; biology seems rather centralized in a lot of aspects. An organism may be made of many cells, but each of those cells have a specific function. Kidney cells do not compute, and brain cells do not contract to pump blood. When a cell starts doing whatever is best for it locally, we call that "cancer". Centralized management arises naturally whenever there's a need for efficiency…

The body as you have described it is one node (an organization in my example) in the wider network. For that node to function it needs to have all of its components working in unison but if the node fails other nodes can adapt and the system keeps on chugging.

This layering of central and distributed seems common on all levels. If you go up from your example, you have an ecosystem that needs to work in unison. But if it fails, there are always other planets...

Re: Is growth in the financial sector good for the economy?

#50

Post by danieltillett » Tue, Jul 21, 2015, 9:34 PM UTC

sillygeese wrote: post #46

danieltillett wrote: post #45

Earlier quoted context omitted.

Actually most large businesses are using someone else's money - the shareholders. The same sort of agency problems that exist in centrally planned economies also exist in large public companies.

You got the point though, so it's kind of pointless to keep arguing, right? Whatever money is lost is someone's own money.

I didn’t think we were even arguing, just discussing an interesting idea :)

Our current economic system is remarkably similar to the centrally planned economy the socialist dreamed of creating. Most productive enterprises have no controlling owners - the ownership of most public companies is highly dispersed and much of it in the hands of pension funds, etc. About the only difference between a socialist “paradise" and what we have now is that the indirect ownership of the means of production is not evenly distributed within society.