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.
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.