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Comment by centralscam | Hacker News Reader

Central banking is the central planning of the availability and price of credit.

Central planning of food production has created famines with no equal in history.

Central planning of housing created those lovely soviet style "housing" block developments while the beautiful inner cities of eastern europe rotted away.

Central planning of car production gave you cars like the Trabant which you literally had to queue 18 years for.

I am sure there is nothing that could go wrong with central planning the money supply but just in case economic live feels harder than it ought to maybe it's because of certain institutions continuously inflating away the value of your currency.

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Decentralized feudal lords caused the sen goku period in Japan and the warring states period in China.

Decentralized attempts to tackle climate change have resulted in run away global warming.

Decentralized negotiations led to companies exploiting workers, often to death, on a massive-scale during the industrial revolution and even today in many places.

That doesn’t say anything about whether centralization or decentralization will lead somewhere in general. There’s a lot of good and bad in both, it isn’t black and white

Centralization of power into the capitals of nation-states brought us the meat grinder of WW1 and then the horror show of WW2. The centralization of power in Washington, Moscow and Beijing brought us to the brink of global nuclear war. WW2 was already hard to escape but no place on this planet will be safe when the Ukraine thing goes sideways.

Yeah exactly. We "need" global communism to fight Climate change, right? I'll pass. If there is a solution it's going to be a bottom up technological innovation.

There was no time and place except under mostly decentralized capitalism when workers where not exploited. Whatever that word even means to you. Normal socialists seem think every transaction is "exploitation".

It's pretty black and white. Centralization only allows for one solution and smothers all others. If the central plan fails, like central banking does right now, it fails for everyone all at once and there is no escape.

> Central planning of housing created those lovely soviet style "housing" block developments while the beautiful inner cities of eastern europe rotted away.

I can’t talk about the other points but as an East European I’d take those blocks any day vs the unregulated apartments being built today with 0 green space and where you hear your neighbors taking a dump 3 floors away from you.

Sorry, but I don't think you know what you are talking about. I actually come from an ex eastern block country (and was born under communism) and I can tell you that nobody prefers soviet style appartments to what's available today.

Hilarious. I live in Eastern Europe in an ex eastern block country, was born under communism and I can tell you there is not way you can convince me I don't know what I am talking about. Honestly this is a bit insulting lol.

I'm not sure that's completely true. Banks are actually the main issuers of new money. The central banks are actually more of a banking lubricant I'm normal times. Obviously they can substitute from banks and make the credit conditions better. But they cannot really make them worse.

What's happening now is that most central bank have been stimulating the economy by lending at rates under the "natural" rate and they are now stopping.

They can absolutely make credit conditions worse, through capital requirement and liquidity requirement. Also if you withdraw QE, it drains banks deposits and their ability to fund new loans.

Capital and liquidity requirements are not decided by central banks generally. In most democracies it's a legislative branch responsibility. They cannot "withdraw" QE. What they have been doing is buying bonds at a higher price than the market thus lowering the interest rates they simple buy them a bit cheaper now.

Capital and liquidity requirements are negotiated by central banks in the basel committee. Then the central bank will add its own home made requirements, and that’s the legislation that gets proposed to parliament. The legislation includes all sort of discretionary buffers that the central bank can freely impose. Central banks are front and centre in banks regulatory requirements.

Withdraw QE = either sell bonds or let them mature, reducing the size of the fed balance sheet. Which drains liquidity from the market (new treasury issuances have to be absorbed by the market).

Minimum capital requirements are laws. They are defined in the Dodd-Frank Act in the US for instance.

> Central planning of food production has created famines with no equal in history.

The Farm Bill in the US (right now) centrally plans food, and subsidizes some crops to below the cost of production. Individuals in the US spend less of their paychecks on food than any other country in the world, and in fact, so much so, that 40% of food in the US is wasted each year and individuals still spend less than anyone else in the world on food. Central planning created a food surplus in the US with no equal in history. [1]

> Central planning of housing created those lovely soviet style "housing" block developments while the beautiful inner cities of eastern europe rotted away.

Central planning of housing in Singapore, the HDB, single-handedly changed the landscape of Singapore. 81% of Singaporeans live in HDB flats to this day. It is widely regarded as an overwhelming success. It transformed the city-state from, basically, slums to a modern metropolis in a few short decades. [2]

> Central planning of car production gave you cars like the Trabant which you literally had to queue 18 years for.

On the other hand, central planning gave Europe rail travel, while the same central planning of transit in America gave us traffic jams and the highest road mortality rate in any developed country.

For every example you have, I can find a counter-example. I don't even believe in half of these things but it's obvious that this discussion is far from black and white as you made it out to be.

[edit] And since we're on the topic of money, decentralized currency issuance in 1800s gave us wildcat banks that went under and took everyone's value with them. [3]

You get what you put in, and it's easy to ignore the successes while focusing solely on the failures. Any system, centralized or decentralized, can fail spectacularly and history is littered with examples of massive successes and massive failures of both.

[1] https://www.weforum.org/agenda/2016/12/this-map-shows-how-mu...

[2] https://thefield.asla.org/2018/09/06/from-slums-to-sky-garde...

[3] https://en.wikipedia.org/wiki/Wildcat_banking

> [edit] And since we're on the topic of money, decentralized currency issuance in 1800s gave us wildcat banks that went under and took everyone's value with them. [3]

Yes, well now we have crypto currencies to take care of this function.

Yeah and it's a pretty obvious vector for corruption, it gets a little too obviously lucrative to have orwellian constant waves of fabricated crises

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