Right, what I’d say there is that central planning when it achieves pareto optimality is behaviorally equivalent to a “market” in the sense that the post uses the term. (Indeed, it was roughly that observation which made “shadow prices” as an optimization technique such a politically-volatile topic in the USSR for a time.) Pareto optimality implies that the central planner has at least implicit prices, and behaves accordingly.
Thank you for sharing this insightful article! It was a refreshing take on economic concepts, especially the way it used the apples-and-bananas analogy. It’s intriguing how these ideas extend beyond traditional economics, almost like how discussions on r/superstonk branch into unexpected territories. I appreciate the engaging read—looking forward to more thought-provoking insights!
yes if you take a particular side in the socialist calculation debate then a centrally-planned economy is isomorphic with “a market”. And yes, if you ignore the Myerson–Satterthwaite theorem (and other impossibility results) then we can sweep aside the fact that most real-world “market” mechanisms do not yield Pareto-optimal allocations in practice :-)
@johnswentworth ok but we can achieve Pareto optimal allocations using central planning, but one wouldn’t normally call this a market?
Right, what I’d say there is that central planning when it achieves pareto optimality is behaviorally equivalent to a “market” in the sense that the post uses the term. (Indeed, it was roughly that observation which made “shadow prices” as an optimization technique such a politically-volatile topic in the USSR for a time.) Pareto optimality implies that the central planner has at least implicit prices, and behaves accordingly.
Thank you for sharing this insightful article! It was a refreshing take on economic concepts, especially the way it used the apples-and-bananas analogy. It’s intriguing how these ideas extend beyond traditional economics, almost like how discussions on r/superstonk branch into unexpected territories. I appreciate the engaging read—looking forward to more thought-provoking insights!
yes if you take a particular side in the socialist calculation debate then a centrally-planned economy is isomorphic with “a market”. And yes, if you ignore the Myerson–Satterthwaite theorem (and other impossibility results) then we can sweep aside the fact that most real-world “market” mechanisms do not yield Pareto-optimal allocations in practice :-)