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Thread: Can, or should, nation-states perform economic calculation.

  1. #1

    Can, or should, nation-states perform economic calculation.

    Within a single state it falls to Entrepreneurs to make bets on their economic calculation skills. However there are nearly 200 nation states in the world.

    If they are considered to be economically competitive with each other, with significant influence over optimizing their national economies, how should states act to position themselves?

    Can states effectively perform economic calculation? do they get sufficient market feedback? What should they optimize for?

    Can States provide their entrepreneurs with better data for economic calculations than other states provide theirs?

    If it helps you get over moral objections imagine instead of a state, a host super corporation, where everyone who leases or rents space within it is there voluntarily and pays a percentage of their income in membership fees.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

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  3. #2
    Studies are fine as long as the government doesn't try to act on them, action should be left to the market. (unless the action is to reduce government)
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  4. #3
    Economic calculation requires the exchange of private property at voluntarily determined prices. States can't own property, and nothing they do is voluntary. It is impossible.

    Similarly, some Austrian economists argue that in a free market, the size of corporations would be limited for this reason. As they get too large, the lack of those incentives leads to inefficiency that allows competitors to take market share.

  5. #4
    Theoretically, if a number of small government actors could emulate the larger economy, then they could hypothetically "plan" the economy. Of course, the question arises, if they're really "planning" the economy then, since their actions are based on an emulation of the market itself. Likewise, it could be pointed out that doing so is dead-weight loss, too. Why bother emulating the entire economy, having a bureaucracy put that plan into action, then having to pay them to do it, when you could just say "welp, the simulation is accurate and is what is happening in the real world; time to close shop", for the simple reason that, it's silly to have an emulation/simulation of something to put into practice what would happen anyway. It would be like using a simulation to fly a plane from London to New York (for the sake of it) so you can have a flight from London to New York.

    The second problem of course, is the more accurate reality we live in---assuming the above is even possible (a lot would question this), you have the problem of political economy. It would be very very lucrative to have bureaucrats in said institution make tweaks and alterations to bias the model to favor one sector of the economy over the other--so really, you've just shifted the political favors that are indirectly impacting the economy (via legislation) to ones that are more direct...which defeats the purpose of using such a simulation/emulation to begin with.

    So, can states do economic calculation? In theory? maybe. In practice? Probably not.

    If you're not talking far flung futuristic woo-woo tech though? Current time frame? I'd say solidly no. Governments don't rely on profit and loss motive for how good/bad a plan is; as a number of economists repeatedly point out: when a place like Blockbuster goes bust, it goes under and isn't really seen again or is absorbed into a larger company and overhauled to be more efficient and serve the consumer better. If a government agency were to run something like Blockbuster and it was to go under, the cry would be that they weren't given enough money, and that they clearly needed more money to fulfill the functions of their department.

    Coercion really does change the scope of the behavior of an organization and how it functions, on a fundamental level.

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