Re:Is growth in the financial sector good for the economy?
by danieltillett on Monday July 20, 2015 @09:39PM
(#9920147)
This problem applies to a non-central planned economy too. Someone somewhere has to make a decision of what people want to buy and make it in advance of the item being purchased (hence inventory). This is why most business use central planning. If they get the planning wrong they lose money and potentially go out of business. The question is can this be scaled up now economy wide now that we have much more advanced computational tools to predict and react swiftly to demand changes. I don’t know :)
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Re:Is growth in the financial sector good for the economy?
by sillygeese on Tuesday July 21, 2015 @12:22AM
(#9920552)
However you might want to define "central planning", there's a massive difference. The business people are using their own money, but central planners use everyone else's.
Re:Is growth in the financial sector good for the economy?
by danieltillett on Tuesday July 21, 2015 @12:45AM
(#9920606)
Actually most large businesses are using someone else's money - the shareholders. The same sort of agency problems that exist in centrally planned economies also exist in large public companies.
Re:Is growth in the financial sector good for the economy?
by sillygeese on Tuesday July 21, 2015 @05:54AM
(#9921220)
You got the point though, so it's kind of pointless to keep arguing, right? Whatever money is lost is someone's own money.
Re:Is growth in the financial sector good for the economy?
by danieltillett on Tuesday July 21, 2015 @05:34PM
(#9925983)
I didn’t think we were even arguing, just discussing an interesting idea :)
Our current economic system is remarkably similar to the centrally planned economy the socialist dreamed of creating. Most productive enterprises have no controlling owners - the ownership of most public companies is highly dispersed and much of it in the hands of pension funds, etc. About the only difference between a socialist “paradise" and what we have now is that the indirect ownership of the means of production is not evenly distributed within society.