But, as an Eastern European I'm of course biased. I grew up in the economy-controlled '80s when we were experiencing toilet paper shortages, among other things (question for the anti-free market people: how do you centralize the production of things like toilet paper? How do you decide how much toilet paper to make, in the absence of a free market?)

Me too! I'm from Poland. And that's why I'm so sick of all those inteligentsia do-gooders who want to impose their own preferences on everybody else because they know better and this legitimizes them to orchestrate the society.

As Eastern Germany (where I grew up) was not experiencing toilet paper shortages in the '80s, I'd say the main source of the problem wasn't the planned economy per se, but other contributing factors.

Amartya Sen makes a strong case for authoritarianism being the culprit, as there are numerous examples of famines and shortages in market-regulated, but authoritarian economies (like the 1943 Bengal famine, where millions of people died).

PS. Yes, there was huge shortage of toilet paper in Poland during 80's. Huge! My family was standing in the queues for 2-3h to get it.

And whole generations lived in misery during that period. I thought that's exactly what we were talking about?

> Not to mention the economic success of Hong Kong or Chile.

I don't know about Hong Kong, but in Chile the Chicago school free market era under Pinochet ended in the collapse of the economy in 1982.

Why do you have to centralise it? You could split the task into regions. How many regions? Enough regions until it becomes efficient at measuring and responding to needs.

To use a phrase... think global, act local.

How do you respond to needs if it's all opaque? For example, for a city of 100,000 people how do you decide how many sheets of toilet paper you need? Or razor blades? Or tampons? I know it sounds all frivolous, but the lack of razor blades was mentioned even by Orwell in his "1984", and as for tampons, I first saw them after 1990, the central economy planners from my country had decided that cotton wool was good enough for women.

Yes, in recent years the market learned to optimize, to run on supply lines with very little buffering at endpoints. Still - the producers get information about how much to make from the sales at endpoints. Why the same scheme should not be available to central planners? Does centralization somehow preclude from measuring at the endpoints?

Hell, if you really look at it, isn't the optimizations market learned basically central planning, but in the hands of private planners and not state ones?

Finally, a centrally planned economy precludes the entrepreneurial function.

One item taken = one sale, so you have the same level of information to manage the economy with.

You need to consider innovation, the creation of the very same information agents in an economy use to decide the actions they take. This is the entrepreneurial function. If production is ruled by coercion of a central planner, you eliminate that, and then what incentive is there for anyone to produce?

In this scenario, at the very best you get crony capitalism; at the worst, you get communism.

I didn't say it was, what I did say is that you lose no 'sales' information from removing money from the process of transferring goods from the manufacturer to the consumer. In other words, removing money doesn't make managing an economy harder.

> "You need to consider innovation, the creation of the very same information agents in an economy use to decide the actions they take. This is the entrepreneurial function. If production is ruled by coercion of a central planner, you eliminate that, and then what incentive is there for anyone to produce?"

Innovation can happen faster without the overhead of competition. What you want to encourage instead is collaboration. Innovation does not have to be a top down affair if you remove money from the economy.

Whilst it's not a perfect example, consider the development methodology of open source. Whilst there are problems with the open source approach, I'd argue that shortage of innovation is not one of those problems.

You said "One item taken = one sale, so you have the same level of information to manage the economy with." so I think you did.

> what I did say is that you lose no 'sales' information from removing money from the process of transferring goods from the manufacturer to the consumer

Money is a tool, and a useful one. It provides portability, divisibility and allows indirect exchange. How do you propose that manufacturer to be payed? Do you see a return to a barter economy? Or do does the manufacturer only gets whatever goods the central planner allocates to him?

> Innovation can happen faster without the overhead of competition.

Can you give an example of that? I'd be more inclined to say that competition is one of the major drivers of innovation. You have to provide more at a lower cost, or you lose your customers.

> Whilst it's not a perfect example, consider the development methodology of open source.

There is a lot of competition (and money!) in open source.

If you think I said that, let me clarify then.

You said... "Monitoring stock levels is hardly all you need to manage an economy." ... I never claimed it was enough to run an economy, because it takes more than monitoring sales to manage an economy.

However, monitoring stock is enough to track sales, that's my point, tracking sales can be handled without money and without losing the benefits of money in tracking sales. By tracking stock you have all the sales information you need. However sales information is not enough on its own to manage an economy. Hope my point is clearer now.

>"How do you propose that manufacturer to be payed?"

Why would the manufacturer need to be paid when everything is free? I'm proposing a system without money, without a need for trade. There are many options, my personal favourites are variations on the resource-based economy ideas.

>"There is a lot of competition (and money!) in open source."

Competition yes, but largely uninhibited collaboration also.

As for money in open source, open source (or rather the free software movement) existed before the money started rolling in. Furthermore, the main benefit that the money brought was that people could work on open source full-time and enjoy a decent standard of living. If you take away the need to earn money to survive the level of activity around open source is unlikely to be diminished.

> Why would the manufacturer need to be paid when everything is free?

He would have to be payed somehow, otherwise why would he produce anything? If everything is free, what determines how much of each product someone can have?

In the system that you propose, the economic calculus is not possible. How do you determine if allocation of resources is efficient? How do you determine if a new production model can generate more at a smaller cost? How does one save in order to improve his conditions in the future?

Does the central planner decide all this? Even if it were possible, it would reduce people to cattle.

Wrt open source, there was always money involved, even if it was just university grants. And as you said, it allowed people to enjoy good living standards.

Consider the context, I was replying to a comment about how to know how much to produce. The implication is that money is essential for this purpose. If all you're interested in is how much is being produced and consumed, then monitoring stock levels is enough to manage an economy. It's also useful to know when innovation may be welcome in the market, however you can get that information more directly by just getting feedback from people, no money has to change hands. You also need to manage your resources, but again you just do that directly by monitoring resources, no money has to change hands. It's important to note that resource management includes consumption of goods, you want to monitor what someone is consuming, in part to guard against over-consumption.

In short, money can be removed without losing any information needed to run a successful economy.

>"Does the central planner decide all this? Even if it were possible, it would reduce people to cattle."

I've already mentioned collaboration once, why do you believe I'm describing a system with a central planner?

In a resource-based economy the only part you need centralised information on is in monitoring available resources, decision making can be handled a variety of different ways, including democratically by the citizens.

Not really. My post, which you replied to, made no mention of "knowing how much to produce". It's not as simple as that. The problem is knowing what to produce, at which quantities, when to invest in capital goods, when to invest in research, when to save money for the future. And this has to be expanded to every agent in an economy. How will a consumer know how to allocate his resources if the economic is not possible?

What you're describing is a nightmare world. Guard against over-consumption? Who decides what is considered over-consumption and what is "normal" consumption? How many smartphones can a family have? How many trips a year is "over-consumption"? Pray not to have a diarrhea or you might over-consume toilet paper! What if I want to eat caviar every day? Do I get it for free? Have you even considered scarcity?

By the way, who produces those smartphones in such a moneyless economy? On what incentive? Who builds the airplanes?

So the central planner will "just" monitor available resources and then what? Order that more must produced? Whose second/third/etc order goods will be used to produce consumer goods? Do you expect people to invest and innovate in exchange for a rice quota?

It's very easy to just claim "collaboration" and not have to care about how it actually works in practice.

Let's use the toilet paper example, looking at how this can work in a resource-based economy...

'knowing what to produce' - toilet paper

'at which quantities' - at sufficient quantity to meet expected demand, just like in the current system.

'when to invest in capital goods' - when they are needed

'when to invest in research' - continuous and free form, no barriers to scientists and engineers researching how to improve the toilet paper that is produced and the methods used to produce it.

'when to save money for the future' - in a resource-based economy there's no money to save.

'this has to be expanded to every agent in an economy' - everyone who wants toilet paper is invested in seeing production and consumption continue.

'How will a consumer know how to allocate his resources if the economic is not possible?' - which resources will the consumer need to allocate?

'What you're describing is a nightmare world. Guard against over-consumption? Who decides what is considered over-consumption and what is "normal" consumption?' - In general, you want to encourage consumption by aiming for abundance, through processes such as cradle to cradle design, however you do have to set some limits to stop excessive overconsumption. For example, someone deciding to take all of the toilet paper in the world. However, in general you want to make the limits generous.

'Have you even considered scarcity?' - Scarcity is an issue, yes. However, you tackle this managing the world's resources, aiming to maximise how well we can use them without damaging the ecosystems of the Earth.

Would recommend taking a look at this talk on Cradle to Cradle design, gives some practical examples of what is possible when you manage your resources effectively:

https://www.ted.com/talks/william_mcdonough_on_cradle_to_cra...

It's worth mentioning that overpopulation is also a problem. In the case of overpopulation, if the resource limits of the Earth are well understood it's easier to know what is the maximum size of human population that the planet can comfortably sustain. Whilst you hope to never have to encounter this limit, you can use policies such as 'one child per couple' when we need to reign in the size of the population.

> "By the way, who produces those smartphones in such a moneyless economy? On what incentive? Who builds the airplanes?"

The people produce them because they want to have them. If the resources are available then they can request the item to be made or make their own arrangements to make the item, depending on the complexity of the item in question and the skills needed to create it. For example, a carpenter may want to make a wooden chair by hand, but may want a smartphone to be manufactured by others.

> "So the central planner will "just" monitor available resources and then what? Order that more must produced? Whose second/third/etc order goods will be used to produce consumer goods?"

Production will be based on demand.

> "Do you expect people to invest and innovate in exchange for a rice quota?"

Food would be free. All material goods would be free. Innovation would happen because someone wanted to make something better.

> "It's very easy to just claim "collaboration" and not have to care about how it actually works in practice."

I can explain how it works in practice, but I need to set the scene about the general ideas behind a resource-based economy first.

To save some time I'll link you to a video that summarises the basic idea. One point I will make beforehand is that I don't believe in a 'one world government' approach aside from the basic fabric of using and protecting resources, which differs from what some other people have proposed. I'd rather see a diverse group of smaller societies. I also believe in variation in goods produced, which again differs from some approaches. However, we can discuss these details later. Here's an introduction to the general ideas of the resource-based economy:

https://www.youtube.com/watch?v=XDhSgCsD_x8

Let's consider housing, for example. You'll of course say that everything is free so everyone will have a place to live, no worries. But who gets to decide who lives where? What if everyone wants to live in that nice piece of land with a view of the beach? So there you have it, scarcity.

Another example would be electricity, clearly another scarce resource. Where does the energy to fulfill everyone's desires for free stuff come from?

There is an even better example of a resource which will always be scarce, which is time. Given that people's time on earth is limited, we will still need to have our list of desires to be fulfilled according to each person's priorities. If I can travel the world for free, why would I waste my time working in the toilet paper factory?

> Whilst you hope to never have to encounter this limit, you can use policies such as 'one child per couple' when we need to reign in the size of the population.

Talk about nightmare world. I imagine you propose this will be decided by voting. Are you willing to hand off such a personal choice to a vote, or worse to the ruling bureaucrats? What will happen to couples who have more than their quota of children? Are they going to jail? Will they not get their rice quota for the extra child? What about equal opportunity rights? Maybe the parents from previous generations who had "too many" children should kill the excess so that the new generations have the rights to have children too...

> For example, a carpenter may want to make a wooden chair by hand, but may want a smartphone to be manufactured by others.

So just because he wants a smartphone to be manufactured for him, he'll go and ask for it and people will do it? Even if you assume that smartphones will be free (a pretty bold assumption considering that for that to happen, everything in the production chain has to be free too, from the software that runs on it to the work of people digging mines for lithium. How realistic is that?), who will manufacture these phones? Who will sacrifice their time to assemble a phone in exchange for nothing?

> Production will be based on demand.

Well no kidding, but you surely don't expect producers will produce just for the fun of it?

> Food would be free. All material goods would be free.

This does not compute. You said it yourself that resource usage has to be "optimized", because resources are scarce. So there's a price to them, even if you can't see it because there are no prices. You'll have to believe what the enlightened resource planners tell you. You'll have to have people controlling the quotas, and then who controls the quotas of the quota controllers?

I have watched the videos you posted. The first one has nothing to do with a money-less economy. In fact I'm sure that what he accomplished was only possible because money exists. Otherwise one wouldn't know if the work was worth doing.

The second video, frankly, has no grips on reality.

You monitor stock levels.

The same functions that apply to a commercial enterprise would apply to a non-commercial one. You'd still have a 'merchandising department' monitoring stock levels, ensuring enough weeks of cover (based on usage trends), setting when to manufacture and how much, etc...

In addition, by having multiple sources of toilet roll you can temporarily boost the stock in one region if another region has a small surplus.

I'm sorry that you had to live through shortages, it's probably no consolation that the problems were caused by mismanagement, but from what I can see they aren't an intrinsic part of communism.

I acknowledge that inequality is getting smaller between averages of different countries, but is it truly getting smaller between individuals (that's what actually matters)? I don't think we can ascertain that, because I think Piketty would have included the historical data if he had them for developing countries.

> Anyhow, his theory has serious flaws

If I understand the critiquing author's argument correctly - is he saying that facts stated in the Piketty's book contradict his own toy model? Maybe then his model is flawed for whatever reason, but that's not a flaw of Piketty's book.

Yes, I know. I was alluding to the following sentence: "Until this new Asian labour is wholly absorbed and its wages rise to Western levels, U.S. and European unskilled wages will remain depressed and the share of profits in value added will rise." - The author here talks about inequality in the West.