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The alluring dream of “Central Planning.”

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — discusses central economic planning, liberalism, libertarianism, fair and competitive markets, and cheating in the following post. Visit the Contrary Brin blog for David's latest thoughts on many topics, and his website for his books and short stories.

 

The alluring dream of "Central Planning."

Courtesy of David Brin (originally published 1/12/19)

Central Economic Planning

Central economic planners generally do it badly, and we know this since the Pharaohs. But Guided Allocation of Resources – or GAR - has improved somewhat, over the centuries. The Soviets used simple accounting tools and firing squads to build massive, primary infrastructure… dams, railroads and steel mills etc. But they were incompetent at the secondary economy… making a refrigerator anyone wanted. The Japanese took computerized skills and capitalist zaibatsu structures and planned their way to great success… that hit a wall in the tertiary economy. The brainy engineers in the Chinese politburo think their shiny AI models can evade any wall. They are probably wrong, but we'll see.

If you find yourself with some time and really want to dive into this, here's my older piece explaining the underlying difference between GAR or "Guided Allocation of Resources," which all but a very few kings engaged in, for 6000 years, commanding from atop… 

vs. FIBM or "Faith in Blind Markets," which is a libertarian religious dogma in the west that never, ever was verified, because almost all FIBM preachers just want power transfered from the state into the hands of a few thousand corporate oligarchs. In other words… more GAR! Just a lot less diverse or accountable. Seriously, see the point made here

A third path, the one actually prescribed by Adam Smith (he never called for a completely "invisible hand") and used successfully in our recent renaissance, has been Maximized Open-Fair Competition. Only, in order for it to be open and fair, the state has to intervene, at-minimum to prevent inevitable cheating. Also, by investing heavily in education, health, infrastructure and the environment, we raise up the maximum number of poor children out of cauterized-possibility, and thus maximize the utility-availability of competition-ready talent

Read that again. Some kinds of socialist interventions — those that reduce cheating or that raise up the children of the poor — are competition friendly, according even to the values of Friedrich Hayek and especially Adam Smith. This supplies a pragmatic — not just moralizing -- justification for at least half of liberalism.

(Any libertarian who questions specific methods of liberal MOFC intervention may be helpful; criticism is valuable and some liberal "programs" really sucked! On the other hand, any who disparages it in principle is not only heartless, but either a fool or a hypocrite, no market-lover, after all.)

And yes, these MOFC interventions to keep competition flat-open-fair, plus generous state investments in R&D, are definitely a form of state planning. Much looser than most forms of GAR and certainly better than the oligarch-loving prescriptions of FIBM. In fact it is the only way to keep the "half-blind" mass-creativity of modern markets alive and vibrant.

The crux: Our system is based on a belief – rooted in our success over 200 years – that you cannot define optimum conditions for an economy, but you cancreate general attractor states. Example: the existence of any flat-fair-open competition at all is an attractor state that results in vastly more creativity and production…

…but that condition is unstable and critically vulnerable to cheating. Our society achieved a semblance of flat-fair-open competition by intentionally – and with deliberate foresight – altering the boundary conditions of market forces so that fair competitors and not cheaters prosper.

Case in point: the breakup of toxic pools of economic power – like monopolies and duopolies. Anti-trust rules enacted by several generations (under several Roosevelts) were spectacularly effective at limiting cheating and opening up genuine competition. Take the auto industry.  With 25+ major car-makers across the globe, competition is genuine and hence, we get better cars for less money, every year. Add in further regulations to incentive emission and efficiency improvements, and one result has been that consumers saved scores of billions at the pump, since the CAFE rules were enacted.

Of course, eliminating all such regulation, especially against toxic concentration of market share, has been among the top goals of cheater-oligarchies, who seek economy-warping power. Above all, the wisdom of the Greatest Generation — using regulation as a means to keep markets vibrant — has been relentlessly torn down by the supposed "friends" of competitive enterprise, with the result of skyrocketing wealth disparities and decline in every metric of economic health. 

See how Robert Reich explains the “Monopolization of America.” And be outraged that the Boomers let slide the wisdom of their parents and grandparents (who adored Roosevelt for good reasons).

Yes, I am libertarian enough to want a light hand! I am also fiercely liberal about eliminating unfairnesses, cheater conspiracies, and the prejudices and poverties that waste talent. Liberal interventions that enable all children to shoot for their potential aren't just moral, they are pragmatic -- any society that wastes talent to poverty or oppression isn't just evil, it is stupid.

And clearly we need the boundary conditions to include incentives and deterrents that account for externalities, like planetary health.

On the other hand, how liberated and healthy-educated young people then sort themselves out to work for (or create) truly competitive companies should be up to them. This is a conversation that the two cousin philosophies – liberalism and libertarianism – could be having! And the top priority of the Murdoch-Putin-Mercer-Koch oligarchy is to prevent those cousins from ever recognizing what they share… a common enemy.

Hence, I feel behooved to veer toward a small but important faction on the American political landscape. One that has been suborned to side with aristocracy. But if they shift, they might make a crucial difference.

Grab the lapels of those lapel-grabbers… 

You LIBERTARIANS out there need to to stop imbibing Forbes/Koch-financed propaganda that Republicans are somehow “just enough less-bad” than Democrats in matters of liberty.

The common aphorism is: “Democrats favor freedom in the bedroom and republicans like freedom in the board-room.” 

Well, yes, if by “freedom” you mean liberating 5000 golf buddies in the CEO-Wallstreet caste to connive in secret, ending free-market competition by creating market-stealing feudal zaibatsus. You must mean that “freedom.” Not the kind that Adam Smith and the Founders fought for and the real Tea Party was all about. (BTW, you Rand followers… ever notice that her novels always portrayed old-boycorporate lords as the real monsters, not pathetic socialists? Try actually paying attention to your patron saint!)

You freedom-lovers should notice the color of the states who are ending the goddam Drug War. States where who-you-love is nobody’s darn business. States where the attorneys general let you record your police encounters, training cops to shrug it off and act professional. States with open meetings laws for councils and agencies. States where your freedom of information requests are (mostly) not stonewalled. 

Oh, and competitive enterprise always does better under Democrats. Yes, including in "pinko" California and New York. Are you scientifically rational and "objective" enough to look at actual outcomes? I will bet you my house. 

Step outside. Breathe the much cleaner air and tell me that polluters who wreak damage on our commons should not be told to incorporate those costs in their offered goods. Eat some fresh fish caught at piers in downtown Pittsburgh. Now go to the nearby college and test for pollutants you can't smell. Go to the beach with a Ph meter and measure ocean acidification. You nerdy libertarians are supposedly bookish, so which political party is waging open war, not just against science but against every fact-using profession, even the U.S. military officer corps?

Yeah, yeah, you hate campus lefties (I despise the worst SJWs, too.) And you nurse theories about a so-called “deep state.” Sure, five million officers, scientists, teachers, journalists are all in a conspiracy together, secretly agreeing on identical lies. Riiiiiight. Yet somehow you never cast your eye on those 5000 lords who are working with foreign mafias to restore the feudalism that crushed freedom for 60 centuries… 

…while empowering their cops to smash your camera and maybe your head. Face it, the civil war is back and the same side that made America and ended slavery is now fighting for your very right to live.

International

How to “win the present rivalry with China?” asks Fareed Zakaria. “Were Washington to be more strategic, it would have allied with Europe, Japan and Canada on trade and presented China with a united front, almost guaranteeing that Beijing would have to acquiesce. It would have embraced the Trans-Pacific Partnership as a way to provide Pacific countries an alternative to the Chinese economic system. But in place of a China strategy, we have a series of contradictory initiatives and rhetoric.”

The author continues: “History tells us that if China is indeed now the United States’ main rival for superpower status, the best way to handle such a challenge lies less in tariffs and military threats and more in revitalization at home. The United States prevailed over the Soviet Union not because it waged war in Vietnam or funded the contras in Nicaragua, but because it had a fundamentally more vibrant and productive political-economic model. The Soviet threat pushed the United States to build the interstate highway system, put a man on the moon, and lavishly fund science and technology.”

I agree on all points. But I have also pushed folks in DC to grasp the power and importance of polemics. The PRC [People's Republic of China] cares supremely about the memes absorbed by its people. They rigorously control what may be viewed or browsed. And they counter simmering public resentments with deliberately stoked jingoism, justifying an aggressive international stance and predatory mercantilism with “getting even for colonialism.” 

As it happens, there is a simple polemical way to utterly neutralize that meme. Indeed, the survival of the world might depend on calming that incitement in the best way possible… with one pure and crystal fact.

And finally… 

An excellent and insightful essay looking back a century at 1919… as we head toward the next "double-number year"… 2020.

And a reminder of my own observation… that each of the last 4 centuries seemed to "find its theme" during the second decade. Let's hope to turn ours upward, while there's still time.

*****

Read these recent posts by David too:

Worrisome directions for democracy

History ramming at us fast. Are we in the foretold "crisis?"

Maddow, Mueller and the dems push a dare at McConnell

Divisive economics


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