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Comment by thinkfurther | Hacker News Reader

Why can't we have economies that can be stable without the sky falling, can grow when wanted, and shrink when needed without a cascade of catastrophies? Can't we? It's a honest question, I have no clue.

Because I also think this is a great idea too, but everything else being the same, the general insanity being the same, something else will probably give. On the other hand, if we did have this hypothetical more flexible economic system, making things well instead of hustling and externalizing costs might come as a lasting side effect of that.

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That would take central planning. The government in capitalist societies can't force someone to open a business when unemployment gets too high, and can't force businesses to close or merge when there are inefficiencies in the market. A capitalist economic system is inherently reactionary: someone notices a demand and creates supply for it. Someone tries their hardest to keep their business open even with low demand, right up until the point where they fail catastrophically. The drive to do better than everyone else is what keeps our economy afloat, but it also sometimes runs competitors out of business.

We can have an economy that is stable and fair for everyone with no winners or losers. But people have been trained against socialism and communism for so many years, it'd be a very tough sell. The only way to have an economy flex responsively is if the government is a central planning agency for businesses.

>The government in capitalist societies can't force someone to open a business when unemployment gets too high

It does all the time, no? At least here, town halls give stupid jobs to people when unemployment is too high. Obviously, the results are catastrofic.

There are notable exceptions (like the New Deal) but it's not a really widespread program. The government can certainly give people jobs, but they're either filling existing demand (like Manpower-type headhunters) or they're creating demand through government work (like road construction).

It's not like Soviet Russia where the government can open a new plant and put people to work there producing private-market goods and then shut it down when supply gets too big.

Important to note that "central planning" is not a black and white thing, there are degrees. The United States is light grey, China would be a darker grey for example. It's totally possible to allow certain markets to be centrally planned and others not to be.

Pure central planning has all sorts of problems of its own, since planning agencies are both corruptible and have limited powers of foresight (a general problem with any utilitarian proposal). On the other hand pure market solutions aren't working either. I don't believe that the 'drive to do better than everyone else' as a matter of economic necessity is a healthy or sustainable one.

I think there's a possibility for communism 2.0 where planning is distributed rather than being centralized or wholly reactive. We've built a great deal of the logistical infrastructure for this already, but our social and economic technology has fallen behind our physical capabilities.

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