It's important to remember that one of the key flaws in central planning is actually the inability to experiment with new forms of organization. The Soviet Union's economic bureaucracy was probably at least as risk averse as any American major corporation, but the difference is that it had an official monopoly on economic resource allocation that no corporation has in the United States. As a result, the competition we have in the software industry would have been literally impossible there unless someone managed to convince the right bureaucrat to give them access to funding and distribution for their product idea. So really, the problem with central planning isn't just inefficiency, but it's the fact that new forms of organization and utilization of capital may in fact be simply economically impossible because of the state's control over the allocation of capital.
Personally, I'm hoping that GM will be given a chance to shed the unions after it goes into bankruptcy. My personal proposal would be for GM and Ford to split up into engineering firms and manufacturing firms, with the latter being liquidated and distributed between shareholders and union members.
Bret Swanson
· 11 months ago
Matt's post is terrific, as is your analysis of it, Tim.
Unfortunately, Matt's point belies his and his friends' policy views on most topics. Myriad are the progressives, liberals, leftists -- or for that matter, even conservatives -- who profess a belief in markets, dynamism, and entrepreneurship...except, well, except in the case of health care...and maybe energy...and, oh yeah, education...and, I guess, retirement savings...and I probably have to throw in automobiles...and I suppose markets just don't work for finance, insurance, air travel, telecom, or the Internet either. And definitely not general labor markets. No, no, no. All these things are subject to dramatic and chronic market failure and are too important to be left to people and markets. But other than that, have at it!
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Personally, I'm hoping that GM will be given a chance to shed the unions after it goes into bankruptcy. My personal proposal would be for GM and Ford to split up into engineering firms and manufacturing firms, with the latter being liquidated and distributed between shareholders and union members.
Unfortunately, Matt's point belies his and his friends' policy views on most topics. Myriad are the progressives, liberals, leftists -- or for that matter, even conservatives -- who profess a belief in markets, dynamism, and entrepreneurship...except, well, except in the case of health care...and maybe energy...and, oh yeah, education...and, I guess, retirement savings...and I probably have to throw in automobiles...and I suppose markets just don't work for finance, insurance, air travel, telecom, or the Internet either. And definitely not general labor markets. No, no, no. All these things are subject to dramatic and chronic market failure and are too important to be left to people and markets. But other than that, have at it!