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Re:Is growth in the financial sector good for the economy? by TeMPOraL on Monday July 20, 2015 @07:03AM (#9915179)
I think it actually was. Central planning is a Bad Thing because Soviets did it and it went bad, so nowadays its inferiority is treated as an axiom. But back then optimization theory was just starting to develop and was never actually applied in practice, and we didn't have enough computing power, nor instant communication infrastructure. I think we should revisit the concept of central planning with algorithms doing global optimizations based on real-time signals.
Re:Is growth in the financial sector good for the economy? by yummyfajitas on Monday July 20, 2015 @08:56AM (#9915652)
The issue with central planning is that it isn't robust - if the planners mess up, everyone is screwed. If we could inject a method by which a failed plan would take down only the planners (and not consumers), it would help a lot. For example, we could allow large centrally planned organizations to exist, but if they fail to meet consumer needs they get dissolved and consumers can go to a different planning board.

Wait, we already have such central planning boards - Uber, Fedex, Walmart, etc. My mistake.

Re:Is growth in the financial sector good for the economy? by TeMPOraL on Monday July 20, 2015 @09:05AM (#9915713)
On the other hand, such distributed planning is incredibly inefficient - how much resources are wasted by Uber competing with Lyft competing with Taxis, by FedEx competing with UPS competing with post office, etc.? The point is, it's a tradeoff - efficiency with single points of failure vs. resilience at a cost of huge waste.
Re:Is growth in the financial sector good for the economy? by witty_username on Monday July 20, 2015 @09:10AM (#9915745)
What resources are wasted? Perhaps some innovative ideas are being duplicated at worst?
Re:Is growth in the financial sector good for the economy? by TeMPOraL on Monday July 20, 2015 @10:20AM (#9916184)
Goods are produced that no one needs. The market gets randomly stuck at local minimas that lead, for instance, to throwing away tons of food because it's more profitable to do that than to donate to those in need. You get tons and tons of duplication by companies competing with each other over a limited set of customers, which also feeds the advertising industry that wastes resources on zero sum games. In current model, the economy is regulated implicitly, by feedback loops fighting against each other creating a dynamic equilibrium. It's inherently less efficient than regulating explicitly. My point is that while humans are not capable of regulating on such scale and thus have to rely on implicit methods, optimization algorithms run on real-time data feeds may in fact be able to regulate explicitly.
Re:Is growth in the financial sector good for the economy? by yummyfajitas on Monday July 20, 2015 @11:03AM (#9916507)
Getting stuck in local minima happens in centrally planned systems too.

You are correct that things like advertising are (sometimes) zero sum - specifically, advertising based on irrational criteria. (Advertising which transmits useful information, e.g. "taxis suck and Uber exists", is not zero sum.)

But you also gloss over one of the big benefits of a non-centralized system - correctly finding the utility function. In a centrally planned system, your utility function needs to properly identify what tradeoffs people would make if they had the choice. This is not easy, and modern computing doesn't help very much here.

In contrast, consumer choice via price systems handles this nicely.

Re:Is growth in the financial sector good for the economy? by saiya-jin on Monday July 20, 2015 @08:48AM (#9915606)
as a person who lived in yet another centrally planned country, let me tell you this, plain simply - it doesn't work. soviets failed, but so every other nation that went that way. let's call it slow but steady financial rotting that will bring any country down, given enough time. there are plenty of reasons for that, they are always the same, but for me one is most important - they all work with ideal person who wants to help the system, instead of disconnected greedy selfish individuals, that real society consist of.

this is of course valid for humans, who have all kinds of flaws, some more than others. so you propose to give power to software, who by principle always has... flaws. imagine how juicy this thing would be for hackers, who would have billions-big incentives from shady business people to nudge decisions in their favors... silly naive people :)

What I would suggest - let some state of the art simulation run along the humans, and evaluate its decisions after some time passes, to clearly see who made the right one, in long term. after there is some long term perception that computer is clear winner (definitely not below 10-20 year mark of steady performance), we can move that way. and always, always have some sort of semi-neutral commitee to oversee and accept/reject all important stuff (with necessary reasoning, not on whims of current most powerful one). make it as transparent as possible. -- do you think this is real? no way, when looking at how shady today's politics are done, be it US, europe or any other place...

Re:Is growth in the financial sector good for the economy? by pdkl95 on Monday July 20, 2015 @11:09AM (#9916542)
I've never understood why anybody would think that central planning would ever work. The very idea is total hubris - before you even get to the decision making process, you need accurate data to work from. It should be painfully obvious that data about (and especially provided by) humans is at best an approximate representation of reality. Often, it is completely wrong. Real-time noise is still noise.

If you want proof of this, consider why work-to-rule[1] works. While it is obviously intended to be used as a type of strike or similar direct action, the idea is that you are technically doing you job too accurately. The work continues to function thanks to the fact that almost nobody does everything they are technically supposed to do. We speed on the way to work, we overlook minor mistakes, we fix instructions and reinterpret orders. Reports are regularly sent up the chain of command that "yes, project $FOO was finished on time" even though everybody involved knows it wasn't.

The idea that you can take known-bad data, apply it to a fantastically complex model, iterate that model to add unknown amounts of chaotic noise, and get usable results is completely insane. Given the realities of how bureaucracies work, that noise will simply be re-interpreted until it says whatever the people involved want it to say. In the end, it is still a situation where the people making decisions are distanced from the consequences of their decisions.

If you want to fix some of the problems we have, I suggest that we need a lot more of the opposite of central planning: local decision making authority. A control system tends to work better when it can get accurate and immediate feedback, and in human terms that means experiencing - or at least directly seeing - the consequences of any decision. We, as a species, are notoriously terrible at evaluating any decision where the consequences are not felt immediately and personally.

[1] http://libcom.org/organise/work-to-rule

Re:Is growth in the financial sector good for the economy? by jevgeni on Monday July 20, 2015 @09:18AM (#9915793)
Say you're the engineer responsible for maintaining the Central Planning And Optimization Algorithm. What motivates you not to calibrate the algorithm in such a way that your family and your buddies benefit the most?
Re:Is growth in the financial sector good for the economy? by TeMPOraL on Monday July 20, 2015 @10:13AM (#9916131)
Nothing. Of course I'll be tempted to set things up so that those that matter to me have their problems solved. That's unfortunately human nature, that's what happens now (people can game distributed systems too), and I have no idea how to design a system that would be gaming-proof and perfectly egalitarian.

But even assuming that some people will abuse the system (as they do today and we still live with it), it seems plausible to me that the economy would still run better if everything was driven by global optimization algorithm fed with real-time data.

Re:Is growth in the financial sector good for the economy? by rjsw on Monday July 20, 2015 @07:40AM (#9915313)
There has been a partial attempt [1] to do central planning with computers.

[1] https://en.wikipedia.org/wiki/Project_Cybersyn