Comment by twblalock | Hacker News Reader

Comment by twblalock | Hacker News Reader

The article cites the rapid changes to supply chains, particularly Walmart's, as a reason the economy kept going. What else is that, other than the mechanisms of a free market at work? The government didn't tell them how to run their supply chains.

Nor did the government tell companies how to shift their workforces to remote work, they just did it, and they did it pretty well, even though some of them had never tried it before. Some companies even introduced remote work in March, before the government ordered any lockdowns!

In doing these things, businesses have relied heavily on technology (also a product of the market) which enables far more people to productively work from home than would have been possible a few decades ago. Small, local businesses quickly pivoted to social media and online ordering to survive.

Given all of that, how can the author say, with a straight face, "None of this has anything to do with the spontaneous interplay of individual economic units that economists like to talk about." It seems like exactly that.

Some companies (especially forward-thinking tech companies we care about on this forum) shifted to remote work quickly. Others fought tooth & nail. There are a lot of stories of companies abusing the rules about essential worker status to get office workers to come in. Government regulations have been an important part of the response to the virus. I think this is to be expected according to mainstream economics. The risk to the public is an externality and many companies will ignore it without government intervention. To the extent that the US response is failing, it’s largely due to insufficient government regulation (although some of it also includes dumb own-goals by our government that are orthogonal from a liberty-regulation axis).

It can be both. Government can decide (on behalf of the citizens) to shut down the economy, and yet let all the economic actors to deal with the consequences of that decision on their own.

So while I agree that free market plays a role, I interpret the line to say that there is also a central decision of the government that organizes all this.

The government dictated who could operate in the market. The government doled out trillions in stimulus money to keep the market going with consumer demand.

There are many businesses still teetering on the edge who have not transitioned well. There are many businesses who laid many workers off.

Also there were major failures in how quickly PPE production could get ramped up, I wouldn't call that a supply chain/market success.

There was some corporate autonomy going on, but I wouldn't say we saw a miracle of the "free market" at work.

I don't necessarily agree with OP but the degree to which the private market, without any government intervention, was able to get masks into the hands of consumers across the country and world quickly was extremely impressive. I don't remember the exact timeline but there was a non-chain corner store down the street from me that was able to get masks within 3 or 4 weeks of the local shutdown. Of course it would have been much better if the federal government had started ordering masks in January and encouraging their use sooner but was still amazing to witness the invisible hand at work to an almost unseen degree.

It would have been more impressive if it predicted demand in advance, so they were actually available when needed. It would have been more impressive if there was a domestic source, but that no longer made economical sense in the market. It wasn't 3 - 4 weeks for many, it was months for some. Likely healthcare workers could get them within weeks, but initial supplies ran out, likely costing lives. While government should hold a strategic supply, our private healthcare system should have also put in the orders sooner. I wouldn't deem it a success at all.

I agree with you, but I suspect you and the GP comment are referring to different things when you say "masks." I'm thinking of the N95 masks that are proven to offer pretty good protection from respiratory droplets. I believe the GP may be referring to either disposable surgical masks, or some sort of other mask that is not rated for any sort of specific protection.

They'd have to have had their head in the sand if they didn't understand all PPEs(N95/non-N95 masks, shields, gowns) were in short/critical supply. There were also shady deals being made at high prices, and counterfeits flooding the market. Once again the market optimized for the profit of a few and not preparedness or quality of life.

Of course I understand that there was a shortage of N95 masks but much of the government isn't setup to buy enormous quantities of stuff in a few days in a market where there a lot of bad actors.

https://open.spotify.com/episode/5x8WrjXmV9RnluuHr1ZOcR?si=F... Notice that this was made April 3rd

I don't think this article is primarily about free markets vs. government planning. It's about the ability of humans - any humans - to make conscious collective decisions about how the economy works in ways motivated by things other than finding profit, versus treating the economy as a mostly-uncontrollable force optimizing for what it optimizes for (the "invisible hand").

I think that's what the author means by "the spontaneous interplay of individual economic units" - that if a potential profit advantage exists, some rational actor will spring up to take advantage of it. The idea that this sort of thing happens reliably and consistently is behind theories like the efficient market hypothesis, for instance. There's little profit advantage in being the first company to shift to remote work or in proactively closing your coffee shop while there may still be a trickle of customers, but people did it. (For that matter, there's little profit advantage in being a videoconferencing service that has its average customer use the service occasionally suddenly use the service full-time for all its employees, and yet multiple such products of the market not only embraced it but built up their free offerings, too.)

If your claim is that the free market isn't constrained to being motivated by profit and can decide, even (or especially) if not ordered by government, to accomplish some other goal - I think you have no real disagreement with the author. What the author is claiming is novel is that people know that this is true, now.

The author's a China shill, he prefers a Chinese order to what we have now. Read some of his articles, seems like a nasty character.

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