···
–
BP: "One person negotiating agreements with
another: that’s society.
You and me, talking and working together."
JRK: It’s hard to imagine that the writer of those
words also wrote
a few days ago in favour of central
planning. Ah, but it will all
be done on PCT principles, with validated models
of how society
works! Then central planning will finally
work!
Bill, just who is it who will get to make these
plans? Are they
going to tell people that they have objective
responsibilities to do
as the planners tell them? Are people to be
merely nodes in a
societal PCT hierarchy, their reference levels set
for them by their
superiors? How many people will have to be
executed before the
proles learn to stay in line and do as they’re
told?
BP: Perhaps I can regain your shattered trust in me.
When I say “central planning,” I don’t mean
what you and others seem
to mean. I don’t mean telling people what to buy or
not buy, what to
produce or not produce (or what prices to set), what
work to do or
how to do it, or in general how to live. One person
can’t prescribe
such things for another person without creating
violence (at least
that’s what I take PCT to predict), which I assume the
majority of us
don’t enjoy. I’m not talking about a coercive (or
benign)
totalitarian regime, which I also assume isn’t
generally wanted.
My concept of a central plan is a model that all can
agree predicts
accurately. The model tells us what will happen to
some variables if
others are changed in certain ways. We validate the
model using
historical data, pretending to predict events at and
after a certain
past date using only information from prior to that
date. When the
model has been refined enough for all those
pseudo-predictions to
succeed with sufficient accuracy, we can begin to make
real
predictions of things that haven’t happened yet. When
those real
predictions have proven reliable for long enough to
satisfy us, we
can begin relying on them in our attempts to control
what will happen to us.
The model will tell us things such as "If the
consensus is that
having another Great Depression is what everyone
wants, keep doing
all the things you are doing right now. To get a
different outcome,
it will be necessary to change some parameters
in the system, such
as p,q, and r, or x, y, and z. You may now enter
changes in those or
other parameters to obtain predictions of what the
result will be."
Of course the model will be incapable of sarcasm.
That is my central planning. The planners are those
who want to know
the most probable consequences of their actions,
particularly actions
based on policies that may be adopted by many people.
The plan is
central in that it is based on a model accepted by all
as correct,
and all have equal access to its use. Furthermore, the
model is
developed by competent people using publicly available
resources,
whose reasoning is open to inspection and debate in
the normal manner
of any scientific development. Where special knowledge
or skill is
required, such as knowledge of mathematics, skill at
developing and
debugging large programs, or a facility for gathering
data from
diverse sources, those who provide it are adequately
compensated in
return for making their resources available to all.
For example, I think a good model might tell us that
if one American
company outsources its manufacturing, it will prosper,
but if this
becomes a general policy and a majority outsources,
the American
people will not make enough money to be able to buy
all that can be
manufactured elsewhere, that foreign prices will rise,
and the net
result will be that in America everyone’s standard of
living will go
down. That might be argued to be a good thing; perhaps
the world will
be better off with less disparity of incomes and
standards of living.
The model does not offer a judgment in that regard.
But the model
does not decide whether any outcome is to be preferred
over any
other; it simply shows what the outcomes will most
probably be. It’s
still up to us to decide whether any given outcome is
wanted or not wanted.
I don’t know if that example is realistic, since we
don’t have any
competent economic model based on a realistic
understanding of human
behavior. I reveal my concealed (?) prejudices by
guessing what a
good model will predict. The example is meant only to
show how the
model would be used in a non-coercive way. No sane
person, even a
criminal, will adopt a course which can be predicted
reliably to
thwart the very goals which it was supposed to
achieve. We all want
to know if our longer-term efforts to make our life
experiences come
closer to what we want them to be are most likely to
fail or to
succeed. Finding out the hard way is not generally a
good idea.
Bernie Madoff, if he had been able to forsee with some
confidence the
outcome of his actions, would have behaved differently
if his most
important goals could not be achieved while in prison.
I encounter so much resistance to the idea of
developing this model
that I can’t help wondering what’s behind it. What is
disturbed by
the idea of actually knowing how the economy works
well enough to
control how it behaves? Is it just that most ideas now
being offered
will prove to be wrong? Is it that certain objectives
now being
sought will become public knowledge? Is it that access
to full
information will make the acquisition of power over
others more
difficult? Or is it simply the belief that no really
workable model
is possible? Is that it? Simple fear of failure?
Actually, Richard, your reaction suggests to me that
one important
reason is that the objective of my proposal is
misunderstood as being
a concentration of power instead of the acquisition of
knowledge.
Perhaps that point is clearer now.
Best,
Bill P.