A market optimizes for whatever the participant wants, profit is simply a mechanism by which the overall market performs price discovery. You always have a choice to not optimize for profit, I make trades all the time where profit is not my goal.
Just choosing a job and being kindly allowed a small local marketplace is not agency.
Hayek's point would obviously violate the church-turing hypothesis (unless there's some hitherto unknown quantum-esque computation process going on in the human brain which I doubt, or you're mischaracterizing his point, I'm reading his book as we speak) but I believe that a sufficiently advanced machine capable of outperforming the market given equatable conditions (same information availability and processing) would probably perform those functions with less resource efficiency, not to mention the resources to build a redundant machine we don't need. If you build one that is better by using more energy and resources to scale its capabilities up, well now you're not optimizing resources on the whole because you're dedicating some for this machine to exist and operate, the resources to build the machine and maintain operation are then distributed suboptimally.
If a machine that uses the same net resources for this task and with equal capabilities could outperform the marketplace at efficiently distributing resources, and there are NP hard problems in personal finance, wouldn't that mean P=NP?
I don't assume that planning an economy would require solving NP-hard problems to outperform the market because I am certain that the market itself cannot solve them efficiently.
As for resources, us as a society already dedicate trillions of dollars a year to market planning - its called profits and capital gains, as well as the entire finance and real estate industry. As long as the planning system requires less than a trillion dollars a year to run even without being more efficient than the market at whichever cost function we choose it will be more efficient overall.
That sounds to me like an ideological position, which is fine of course.
But the question arises, if solving distribution problems requires a participant to solve NP hard problems as you've said (I'd appreciate a link to that paper whenever you can get around to it, I seriously do want to read it and am not just shouting "source", same goes for the distributed planning in anarchist planned economies we were discussing in another thread) then how would that not be true for a machine? Either the problem is NP hard or it isn't, regardless of what entity is trying to solve it.
NP-hard problems can be approximated. You get the machine to approximate a solution that is better than what the market could do or thereabouts.
The fact that it has to aproximate at all however completely invalidates Hayek's argument, which is why it is worthless - his assumptions beg the question.
That being said, given the ability of incredibly rudimentary paper-and-pen, low tech planning systems where planning is basically a very difficult computer science problem to get within a third to a half of what markets can do, I think there is a solid shot that planning can outperform markets in the majority of industries, though perhaps for smaller industries a flexible hybrid will be more useful.
I did enjoy this conversation though. And again, I'd love to read what you have on decentralized planning in anarchist planned economies and NP hard problems humans have to solve in markets. If you can show me a paper that demonstrates that markets require participants to solve NP hard problems I'll be done with markets.
I personally don't care for the purely theoretical arguments that Hayek makes, and yes the arguments are full of apriorisms and assumptions but that's the Austrian school for you and that's what you need to prove that markets must be better than planning.
The actual argument I'd make why planning can outperform markets in many industries and cases is pretty straightforward - markets require duplication of labour, they cause intrinsic crashes, they hurt knowledge transfer because they require intellectual property, they require infinite growth, and more.
Meanwhile actual implementations of planning have been plagued by incredibly slow iteration times (in the order of 5-4 years), access to data so horrible that CIA data was sought by planners, excessive centralization due to the impossibility of getting popular input, very low transparency, limitations in processing as data was collected and processed by hand, allocation of resources by hand, etc...
Planning is fundamentally a computer science problem at every level, and every single major defect can be fixed or palliated using techniques developped from computer science.
Because of this and the relative competitiveness, on the order of 1/3, of planning despite horribly deficient implementations, I think that there's a solid shot that planning can be a better solution than markets in most cases, though not all.
Finally, central planning doesn't actually mean eliminating markets - they are still useful for gaging the relative value and demand in consumer goods. Rather, the goal is to replace capital markets.
There, that's my case for why it is very probable that planning can be a better alternative to capitalist markets in most cases.
From the linked paper (which is very interesting):
> Financially, the "economic calculation problem" of von Mises (1920) and Hayek (1935) suggests, among other things, that even if a free market is not perfectly efficient, it will certainly be more efficient than a regulatory or government alternatives. In other words, even if mispricings occasionally occur, most of the time they are smaller than any other alternative system.
> Both of those arguments are similar in their domains but neither applies to the results of this paper. Whether markets are efficient or not, and whether P=NP or not, there is no doubt that there will be markets that can allocate resources very close to efficiently and there will be algorithms that can solve problems very close to efficiently. The results of this paper should not be interpreted as support for government intervention into the market; the fact that market efficiency and computational efficiency are linked suggests that government should no more intervene in the market or regulate market participants than it should intervene in computations or regulate computer algorithms.
So basically the author does not argue that markets are suboptimal at distributing resources and even goes on to state that a government should not intervene. The paper basically demonstrates that if P!=NP then no system can achieve true efficiency, and argues that markets achieve at least as much efficiency as any other system through approximation.
You list the arguments you'd make defending the idea that planning can outperform markets, but you don't actually make the arguments. So I'll ask.
Where is the duplication of labor in markets? What is your argument that markets cause intrinsic crashes based on? why do markets necessitate intellectual property? I don't believe they do. People traded for centuries before the concept of intellectual property was invented. What is it you mean by "infinite growth"? There is ambiguity there that is often misunderstood, there is creation of wealth which is things like inventing the wheel, inventing the airplane, things that are real growth (and I'd add, preclude intellectual property) that are deeply connected to free markets, and then there is the concept of infinite growth of an economy in scale, something that is not necessary in a market. The two are often conflated.
Also is it possible, even probable, that the problems that plague implementations of planning are symptoms of my argument, and will structurally plague all implementations due to the limitations inherent in central planning systems I've laid out in this thread?
The market does not optimize for resource distribution, it optimizes for profit. It is tyrannical in that it removes your agency, as a member of the market you have no other choice but to optimize for profit in many important situations.
This is already dysfunctional enough to completely destroy a society, so we have to implement fictions like IP and regulations to tame the beast.
As far as central planning goes it's certainly possible to plan an economy while allowing people to choose their jobs and start small companies.
A sufficiently advanced AI would inevitably be more efficient, simply releasing all IP restrictions, all binning that is not necessary, ending all unproductive landlordism, and the compound growth from the lack of crises would do it.
Now you could be opposed to it from an ideological point of view, but no matter what you're misstating Hayek's point, as he contends that it is not, actually, possible to perform the economic calculation outside of markets, due to computing brain magic of humans only when they act that way.
Also, the mere principle that a market can run the economic calculations more efficiently than another computer is a violation of the Church-Turing hypothesis. There is no machine that we know of that can do any computation with better complexity than a Turing machine, save for quantum computing.