librehab

Communism can be drastically more efficient than capitalism on these fronts. There are still technical debates about socialist planning, but essentially your critique can become a communist critique just by replacing government with multi-national corporation. Large corporations are essentially doing planning since they don't allocate resources within them by internal markets (Sears tried that and it was disastrous) and in real life, corporations try to induce demand with marketing and a lot of the assumptions to make markets and marginalism make sense don't actually function in a real business (e.g. despite "deminishing marginal returns and increasing marginal costs" it costs less not more to build your 1,000,001st car rather than your first). Even in your example of food allocation, a small number of corporations (e.g. Cargill and Kroger), rather than "locals" decide those things. They might not be able to get away with only selling gruel and meal worm paste, but this is a highly consolidated sector (and markets would always lead to that) and the US and "the west" have extreme amounts of food waste. Additionally, local people don't have more control and input in capitalism even in the abstract. There are certain sectors where the capitalist ideology of "voting with your wallet" can approximate local input, but usually that is not the case.

The religious belief that capitalism is efficient and voting with your wallet gives local input comes from the hyper simplistic thought experiments about markets in the abstract or Alice and Bob deciding to trade a widget. The most important and foundational assumption, but is not stated, about efficiency of markets is that everyone has an infinite amount of money, but finite and equal value of a dollar, so willingness to pay only amounts to how much you want/need something. So, we can say that markets allocated resources efficiently, because if this guy didn't buy necessary, life-saving medicine, it must be because he valued $3000 more than his life rather than not having a way to get that sum of money. And then using markets to advocate for Capitalism use neoliberal dodges about making Capitalism about markets, rather than who owns capital and how much control over society and resources they get from owning capital. Additionally, there is Hayek's understanding of the price mechanism as aggregating and computing resource allocation. But this only works as the most crude form of feedback (there is a shortage of this, use less. There is an overabundance of this, so consume more even to the point of wasting it). To say that markets are efficient means that "externalities" don't matter. e.g. "The environment doesn't matter and shouldn't be considered since markets don't naturally price it in, so use more fossil fuels and dump toxic byproducts into the drinking water." Or "well, now that we have been privatizing and have sub-contracting in universities to be more capitalist, there are more middle-men and bureaucrats. So there should be less education, and anyone that gets educated should be in debt for the rest of their lives. this is efficiency"

local officials exist and are elected from local populations in a communist society. Unlike Amazon and other corps who ship in fresh mangement with no links to the community. This seems pretty straight forward.

Through responsiveness between local and national (or global) concerns, something that the market system is not as good at as Neo-classical economists want us to believe. It is a bit myopic to think that capitalist firms today don't engage in decision making about resources 100km away either. Large firms already engage in significant economic planning internally, markets are not a resource efficient mechanism as much as they are a profit mechanism. I still have not seen a convincing argument as to where the breaking point is between a large firm engaging in internal planning and a planned national economy. Even capitalist economies engaged in widespread planning and non-market mechanisms of resource allocation during the second world war, and they did it without the widespread computing we now have.

If you want a short but detailed book to read which also dives into the mathematics of how to compute this, Economic Planning in an Age of Climate Crisis is good as it deals with optimal uses of resources and consumer demand. Two of the authors also wrote Towards a New Socialism which also deals with similar issues. We've had the mathematical concepts to do this for a hundred years, there is a reason Kantorovich won a nobel prize in economics. Linear programming is still taught today as a way to calculate efficient uses of resources, not to mention the advances capitalist firms have created since then in figuring out efficient ways to produce and move good internally without a market mechanism.

There are a few other authors who have long books engaging with how to do this as well which I can recommend to you if you want more.

If you want to bring up the criticism that soviet planners failed to respond to local conditions, just remember they used abacuses almost right up to the end to compute things, and information traveled slowly. Its amazing they were able to accomplish what they did tbh.

When a central government is planning, what signals do you think they use?

I don't think there's many "local companies" managing factory farms, or importing food from overseas neocolonies. Also 100s of km away.

I'd say just look at the levels of food waste occurring and food insecure billions, within markets today, to know something's fucked. There's certainly a better way of centrally managing production and distribution, especially with the levels of technology available today.

Nobody has given a good answer yet (including me, mine was lazy), so let's get into this.

• What is "efficiency"? This is often left undefined in discussions (not always). Can we say resources are allocated efficiently or inefficiently without defining what we mean and how to measure it?

• Let's clear up the misconception that communism is always very pro-centralisation. A state will have to design its economy intelligently, which includes an appropriate use of decentralisation. To take your example of local government having budgetary discretion; it's not part of communist ideology to smack that down and say "No! Every decision is made in the capital!"

• Paper: 'Can neoclassical economics underpin the reform of centrally planned economies?*' by Peter Murrell PDF. A classic paper from 1991, highly cited. Two relevant quotes from it –

Inefficiency from planning: "With plausible values for the elasticity of substitution, he found that the efficiency loss could be as low as 1.5 percent. Desai and Martin (1983) generalized the methodology and provided time-series estimates of efficiency losses. Their estimate of the efficiency loss for 1960 was consistent with that of Thornton, but they also found such losses rising to 10 percent by 1975. When these estimates were presented, they were interpreted as a serious indictment of central planning."

Toda (1976, p. 263) examined statistical significance, and summarized his results with the same sense of paradox evinced in earlier quotations: "The Soviet institutional setting, where the industries are under various governmental regulations in acquiring the factors of production and where the price of finished goods and intermediate products are arbitrarily set, makes one suspect that the use of primary factors must be in disequilibrium. In large part, however, empirical results [examining the statistical significance of differences between factor price ratios and marginal rates of technical substitution] fail to verify our expectations."

• To bang home my second bullet point a bit more, not only can socialist economies have decentralised decisions, this can mean market-based decentralised decisions. Most successful AES countries use market-based decentralised planning (Hungary, Vietnam, China, the NEP). My very short notes on a very simple system might be illustrative, but there is a lot to say about Market Socialism: https://hexbear.net/post/282048?scrollToComments=false – This is what I meant when I said "what signals does the central government use to plan?" It's a misconception that a bureaucrat in the capital guesses what demand for fur coats will be in the provinces; they use demand as an input to the plan same as capitalism does. Even medium-sized companies in capitalism make projections of next year's demand. So just because the inputs feed into a plan, doesn't mean there are not decentralised inputs, like supply-demand figures.

• Capitalism tends towards centralisation in monopolies and oligopolies. This is intuitive because look around you. https://www.weforum.org/agenda/2016/05/joseph-stiglitz-are-markets-efficient-or-do-they-tend-towards-monopoly-the-verdict-is-in/

Capitalism isn't efficient at allocating resources. There's a massive amount of waste in everything from food (insert Grapes of Wrath oranges excerpt) to overproduced clothes that are destroyed because they're ”last season” (see Abercombie & Fitch or Burberry).

Have you seen capitalist resource allocation? The bar to beat isn't very high.

I strongly believe that a local person/company knows better how to allocate resources efficiently than a central government 100s km away.

Do you consider this an efficient allocation of resources (skilled labour)? Thousands of engineers working in competing companies to come up with a product that is practically identical? And then thousands of other support staff and marketers and more working on shilling that product against one another?

You're looking at the question of the distribution of resources in an incredibly simple way, and not considering what taking tens of thousands of skilled workers away from these wasted projects and putting them towards progress can achieve. You're not looking at capitalism critically and asking yourself what parts of it are inefficient and wasteful.

The USSR went from feudal backwater to #2 world power in 30 years, and then first into space. It did so because it is vastly more efficient and this kind of allocation of resources.