Comment by GabrielF00 | Hacker News Reader

Comment by GabrielF00 | Hacker News Reader

This piece gets posted here occasionally, and I really disagree with the conclusion that people think that we have to have government because they don't understand the capabilities of non-directed, bottom-up systems.

> Now, in the absence of faith in free people—in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity—the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental "master-minding."

It's possible to understand that non-directed systems can produce impressive results and still believe that a directed system might be the right choice for certain situations. Plenty of biologists were Marxists for example (JD Bernal, Steven Jay Gould was very left wing). Surely, they would have understood that complex organisms don't arise from central planning, but from an undirected, emergent process. Yet they also believed that government should play a major role in human society.

I can't find the source but I remember hearing of some tale of Margaret Thatcher strolling around London or someplace with some Soviet official. Supposedly he was astounded at the bustling economic activity whizzing about them. He asked her something along the lines of "who is your central planner that has yielded all this?", to which she replied something to the effect of "no, one, this is the Free market operated by individuals, etc etc."

Doing a cursory search for the above, I did find this quote that seemed to capture her sentiments against central planning, to which I think a lot of people use the I, Pencil fable to show the folly that some centralized individuals would have knowledge at all times and all places about what goods and services should be in demand and what they should be priced at and that there's an arrogance to even attempt so much.

"The lesson of the economic history of Europe in the 70's and 80's is that central planning and detailed control do not work and that personal endeavour and initiative do. That a State-controlled economy is a recipe for low growth and that free enterprise within a framework of law brings better results…. And that means action to free markets, action to widen choice, action to reduce government intervention. Our aim should not be more and more detailed regulation from the centre: it should be to deregulate and to remove the constraints on trade.”

I don't think we needed the economic history of the 70's and 80's to no this.

There are couple of funny true story about the Soviet Union. In one a Soviet Economics Professor went to the US in the early 90s. He lived with a US professor, he had the plan to bake some sort of local bread and they went to the shop to buy flower (and other things), but it was a particular kind of flower.

Somehow the show this note have this on the shelves so the US prof went to a clerk and ask him if they had some of that flower in the back. The clerk went off, and came back with the flower.

Seeing this the Soviet prof remarked that he was very impressed how highly economics professors were valued in the US.

To be clear, my point isn't that central planning is good. My point is that people may prefer centralized control for certain things even though they understand what non-directed processes can accomplish.

To use the author's example of the post office, there may be reasons why one might want the post office to be a public entity beyond "only government could build such a complex system". For instance, it might be reasonable to wonder whether a postal system that evolved organically would cover everyone in a society, or would rural people or others who are expensive to reach be left out. Mail delivery probably qualifies as something we want everyone to have access to in order for a lot of our systems to function.

Governments don't seem to want competition for their postal monopolies. There is the interesting case of the American Letter Mail Company, which tried to do this in the mid-1800s, but was shut down.

https://en.wikipedia.org/wiki/American_Letter_Mail_Company

> some tale of Margaret Thatcher strolling around London or someplace with some Soviet official

That sounds so absurdly fictional that it can only have been a joke or bad propaganda. It fails the smell test not only for Thatcher to be strolling around London with a soviet official but for the soviet official to be oblivious to Thatcherism famous for its deregulation, union-busting and privatisation.

The anecdote could very well be true. The level of ignorance and arrogance behind the iron curtain in many ways was unbelievably beyond absurd.

And remember Thatcher's 'deregulation' was all within the context of what was already a fairly capitalist system to begin with.

When the Berlin wall fell, a lot of E. Germans crossed in to W. Germany - and when they entered the grocery stores, and saw all the amazing produce - fruit out of season, so many varieties of packaged goods - they were in shock and tears. They had been lied to their whole lives, told that they had 'the best' products and services and quite literally believed that their system was absolutely superior. This is the plebes mind you, I'm sure a lot of younger types had some idea of what they were missing out on.

My friend grew up in Poland - they had 3 flavours of ice cream 'vanilla' 'chocolate' and 'pink'. And none of the other soviet states had more than either choco or vanilla - so they thought there were 'rich' compared to the other states. But they didn't fathom that other flavours even existed ...

This tickles something. I remember reading that after Khrushchev was forced out there were two factions in the Soviet government, one that wanted to keep the military based command economy and the other that wanted more focus on a consumer goods based economy. Brezhnev and the side that favored a military based economy won.

Just looked up the source, apparently it was during the 80s and was Mikhail Gorbachev, and I scrambled a bit of the details, and the author of the text too does not cite a source but refers to it as a popular story. I wonder if Google can dredge up something to substantiate it.

"In the 1980s, the last premier of the Soviet Union, Mikhail Gorbachev, traveled to Great Britain and met British Prime Minister Margaret Thatcher. According to a popular story, when Gorbachev was touring with Thatcher, he was surprised to see how well off the British seemed to be. He asked Thatcher who made sure that the British people got fed. "No one," she told him. "The price system does that." The British people got fed far better than the subjects of the Soviet Union, who languished under a planner economy." pg 220 Invidivisble: James Robinson, Jay Richards

Apparently Thomas Sowell retells the tale too, but also as as a story "...is said to have asked..". I wonder where this tale originated from then.

How an incredibly complex, high-tech economy can operate without any central direction is baffling to many. The last President of the Soviet Union, Mikhail Gorbachev, is said to have asked British Prime Minister Margaret Thatcher: "How do you see to it that people get food?" The answer was that she didn't. Prices did that. Moreover, the British people were better fed than people in the Soviet Union, even though the British have not produced enough food to feed themselves in more than a century. Prices bring them food from other countries.

https://books.google.com/books?id=oVaNBQAAQBAJ&lpg=PT21&ots=...

I think you're thinking of the time Boris Yeltsin visited a supermarket in Texas: http://blog.chron.com/thetexican/2014/04/when-boris-yeltsin-...

Of course, as soon as you go into a shop and ask the question "how did this get on the shelf?", you find that rather than being done by free individuals interacting on an adhoc basis it's done by employees taking hierarchical direction from a centralised business, run by a single person who pays themselves a huge amount while congratulating themselves on creating all those jobs.

(See Coase on the Theory of the Firm)

Exactly what I was thinking when reading this story.

And not only was each step along the way to the pencil a result of direct and carefully planned action, the side effect of pencils from rail cars is only made possible at all because pencils are economically viable. Otherwise they may not (still) exist.

There is a certain harsh reality to this free market—it does not favour quality or popularity or even efficiency.. The blade falls on just how much rent can be extracted at each step without nudging itself into oblivion. What is the practical difference (for a pawn like myself) between a system or a person giving directorial control over the allocation of resources?

I think the constraints around centralization pertain to the economy as a whole, that the tree is decentralized, but not any particular leaf on the tree. I'd say its a matter of qualifying around scope, not some absolute unrestrained organization in all places at all times.

That is true, but I would say that its the first step to understand this fact. If you do not 'get' this, then its very hard to convince people to of any of this.

You might consider brushing up on your understanding of formal and informal fallacies. Oy gevalt.

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