>A very brief summary of its conclusions is: central planning can only perform as well as or better than the market when the economy is completely stagnant.
I'd hardly say that was either proven or agreed upon
>"centrally planned economy managed by the government" by definition leaves no space for "an open market" for "more productive or talented citizens" to "choose to earn more wealth and purchase from."
I don't see this a being "by definition" either. You can have a centrally planned economy with people who are independent (or at least as independent as they are in any other economic system) in what job they choose, where they choose to work and what they choose to buy. The government could assess the demand for a product at a given price, determine the resources (material or human) necessary to produce that product as well as all other demands for those resources. When the demands exceed resource availability, you then raise the price for that resource, refactor that into the price of the final product and then assess the demand for it at that new price. You raise the price for each constraining resource until the demand drops to a level that can be fulfilled. This would include specialized labor, so if a job is in high demand and short supply, the wage for that job would go up until the supply increases and/or demand decreases to reach equilibrium.
All of this already happens in an ad-hoc way in a free market, but in a free market it can take a long time for changes in input prices to be reflected in output prices, and it can take even longer to determine how those will affect demand. I don't see why that couldn't be formalized and worked out centrally. I'm imagining an economy where everyone is issued a smartphone through which they make all of their purchases and through which they find and respond to bids for employment. Demand could then be assessed fairly accurately and instantaneously. It seems like it would be way more efficient in terms of reductions in redundancy, overproduction, costs incurred attempting to generate demand that does not exist or siphon demand from competitors' products, and price increases solely for profit-maximization in cases where demand is inelastic and supplies are sufficient (like epi-pens or insulin).
Modeling it would probably be extremely complex and might still exceed our current computational capacity, I dunno, but I don't see any reason to call it impossible.
> The government could assess the demand for a product at a given price, determine the resources (material or human) necessary to produce that product as well as all other demands for those resources.
As the blog post notes, politicians will not leave their hands off sensitive prices, leading to unending systemic distortions. This already exists.
> All of this already happens in an ad-hoc way in a free market, but in a free market it can take a long time for changes in input prices to be reflected in output prices, and it can take even longer to determine how those will affect demand.
Market reactions vary according to the market. Petrol prices at the pump move up extremely quickly, because the station owner is going to pay for the next tank out of this tank. They move down slowly because that's about the only time they turn a profit.
Meanwhile, manufacturing industries can need 1-5 years of lead time to increase capacity. They can't and won't make massive changes without substantial, sustained market signals that it's required.
The difference between the market system -- really, the price system -- and non-market systems is that the price system is sufficient to solve the planning problem. A world of agents who know nothing but prices is still able to allocate resources and production in a way that adapts to changes in demand and supply, including large shocks.
In practice, real markets also make use of other information signals. But they do not require them. And they do not require a central coordinating planner to have perfect or near-perfect information of extremely wide ranges of local information.
Probably the best explanation of this distinction is found in Hayek.
I'd hardly say that was either proven or agreed upon
>"centrally planned economy managed by the government" by definition leaves no space for "an open market" for "more productive or talented citizens" to "choose to earn more wealth and purchase from."
I don't see this a being "by definition" either. You can have a centrally planned economy with people who are independent (or at least as independent as they are in any other economic system) in what job they choose, where they choose to work and what they choose to buy. The government could assess the demand for a product at a given price, determine the resources (material or human) necessary to produce that product as well as all other demands for those resources. When the demands exceed resource availability, you then raise the price for that resource, refactor that into the price of the final product and then assess the demand for it at that new price. You raise the price for each constraining resource until the demand drops to a level that can be fulfilled. This would include specialized labor, so if a job is in high demand and short supply, the wage for that job would go up until the supply increases and/or demand decreases to reach equilibrium.
All of this already happens in an ad-hoc way in a free market, but in a free market it can take a long time for changes in input prices to be reflected in output prices, and it can take even longer to determine how those will affect demand. I don't see why that couldn't be formalized and worked out centrally. I'm imagining an economy where everyone is issued a smartphone through which they make all of their purchases and through which they find and respond to bids for employment. Demand could then be assessed fairly accurately and instantaneously. It seems like it would be way more efficient in terms of reductions in redundancy, overproduction, costs incurred attempting to generate demand that does not exist or siphon demand from competitors' products, and price increases solely for profit-maximization in cases where demand is inelastic and supplies are sufficient (like epi-pens or insulin).
Modeling it would probably be extremely complex and might still exceed our current computational capacity, I dunno, but I don't see any reason to call it impossible.