They suck at escaping local minima, for one.

Your "if" is doing a ton of work there, and this paper is quite abstract market theory. The "practical use" is to better contextualize the efficient market hypothesis.

They don't escape local minimum at all. And that means they suck for society at large compared to what? Random guessing? A corrupt government price system? An omniscient one that can solve NP hard problems? The "if" motivates answering the question.

Anyway markets have a lot more going on than a simple greedy algorithm. For injecting noise into the optimization to get out of local minima. Markets clearly have a lot of this.

> And that means they suck for society at large compared to what? Random guessing? A corrupt government price system? An omniscient one that can solve NP hard problems?

There's an intriguing recent book (that, admittedly, I haven't read) called "The People's Republic of Walmart" https://www.penguinrandomhouse.com/books/564287/the-peoples-...

If large corporations are the shining beacons of capitalism, how come they are run internally as top-down planned economies? And to the extent they prove than planning can work at scale, could planning work society-wide? Not saying I agree or disagree (again, I haven't actually read it), but dusting off the ye olde calculation debate and updating it for today seems like an interesting idea.

The worst part of centrally planned economies is that they are prescriptive and essentially authoritarian in nature. If they make mistakes then nothing prevents them from repeating the same mistake. There is no threat of the central planner being replaced.

If all Walmart does is make mistakes then they go out of business. Central planning won't work but federated planning with 20 super corporations that are in competition with each other might actually be good enough. The only problem is that we both need and want the underdogs(startups) and this would undermine them.

> There is no threat of the central planner being replaced

You are conflating an economic model with a political one. In fact, the central planner doesn't even need to be a person, but a set of assumptions and strategies that can be measured against the benefit they provide and be continually adjusted.

You touch an important point, however. The people most affected by Walmart's central planning, their employees, have no say in what strategies and assumptions the central planner uses and that removes any incentive to provide benefit to them.

The EMH is also conflating an economic model with a political belief system.

The notion that these huge corporate bureaucracies are somehow "efficient" at anything except trashing the environment and homogenising and controlling - if not ultimately economically cannibalising - their own workers and customer base is clearly counterfactual.

> The worst part of centrally planned economies is that they are prescriptive and essentially authoritarian in nature. If they make mistakes then nothing prevents them from repeating the same mistake. There is no threat of the central planner being replaced.

From reading the book synopsis (again, I haven't read the book itself), it seems the authors are proposing some kind of democratic socialism rather than USSR-style authoritarianism. Is it workable? I have no idea. To me it seems that USSR-style authoritarianism and current Western neoliberal capitalism are but two small dots on the political economy spectrum. There are other ways of organizing society as well; certainly worth thought experiments to see what kind of other options there might be and what we might learn from them.

I'd say startups are a much better example. But I didn't come here to argue politics, just asked for someone to describe their superior optimization process (math being my actual interest, so still waiting to hear it). I wouldn't describe "do what walmart did" as a particularly useful optimization strategy.

> But I didn't come here to argue politics, just asked for someone to describe their superior optimization process

Look. I don't believe that P=NP. I can't describe a superior optimization process, and if I did, I would claim the Clay Math prize. I'm also not an economist.

My takeaway is that any simple strategy is almost certainly bad in the long term. You can optimize your own personal take, but in doing so, "the invisible hand" isn't going to somehow flip that into a benefit for all.

The fact that large corporations are certainly top-down, planned, and successful in a meaningful sense is certainly a rhetorical blow to anyone who believes in a simplistic way that "markets" and "decentralization" are literally the only way to be large and successful.

But if large corporations prove the efficacy of planning at scale, then they surely prove the drawbacks as well. What are the society-wide central planning equivalents of layoffs and maximizing shareholder value? Does a centrally planned corporation outsourcing their supply chain or HR department represent a fundamental failure of central planning?

It seems quite obvious that 'competition' between the various 'planned economies' and choice between them by consumers is generally a good thing. One that would not work for a fully centrally planned economy.

That said, it is indeed quite interesting to figure out at what size such central planning starts to become non viable. And for that the observations: "It is viable for wallmart, but not for all of the USA" give some interesting bounds.

I’ve always seen this debate as kind of moot. The thing with optimizing, is that you always optimize with a target.

Large corporations rule top-down because goals are set at the top. That’s very different from a society problem.

Greedy algorithms can be arbitrarily bad on large NP-hard problems. But if we're using terms metaphorically, we could also say each greedy company is just a Monte Carlo sample of the whole economy. Some fail or stagnate in local optima; others succeed for longer. But the economy is too complex to expect anyone to ever find a global optimum, so continuous exploration of the landscape is important for overall growth. Thus we can aim for and admire success but should be vigilant against anticompetitive behaviors that stifle the sampling.