Tuesday, June 28, 2011

Calculation Debate

Markets on a (Computer) Chip? New Perspectives on Economic Calculation

Mark Jablonowski, Science & Society, July 2011, Pages 400-418

Abstract: Is it possible to implement an efficient economic alternative to market capitalism using economic planning? The debate, which has blown both hot and cold over the last 80 years, has turned on the feasibility of calculating solutions to what amounts to a vast quantity of economic equations. More recently, issues of respecting the uncertainty and preserving the information content inherent in "real world" economic transactions have surfaced. The question may ultimately be decided not on how much computing power is needed to solve complex economic problems, but rather on how well new solutions are articulated. New developments in computer "chip level" computation, including the rebirth of electronic analogs and the incor-poration of the fuzzy set formalism for computing in complex systems, may impart a greater feasibility to the idea of deliberate public planning that integrates the benefits of the market process for the achievement of social objectives. These developments have implications for establishing workable alternatives to capitalism.

(Nod to Kevin Lewis)


John said...

Still a public choice problem. Who watches the coders?

Chris S said...

I see Hayek's "The Use of Knowledge in Society" isn't referenced in the article - seems like a telling omission to me.

Richard Stands said...

The U.S. already has over 300 million "computers" working on the task, each with several magnitudes more capacity than the best any current hardware company has to offer. And this network (or "market" if you will) is variably allowed to interact with nearly seven billion other computers worldwide.

In a market populated by humans, hardware and software will never create "an efficient economic alternative to market capitalism" which would be superior to wetware. Never.

Anonymous said...

I've always thought that it was just a matter of time before some socialist came up with a computer based scheme like this. It's still Central Planning.

Tom said...

Whose "social objectives" are we going to achieve? If I get to pick, I will guarantee that no method of central planing is going to come close. If I don't get to pick, why would I co-operate?

Before we search to hard for "alternatives to capitalism", can we give pure capitalism a trial... just once?

/my capcha is suour

Big Al said...

I agree that economic liberty creates a society in which all actors play their parts in the economic problem-solving process. As for the central planner's dream of using computers, we are already there! One of the most important benefits of computers is that they have *already* had a huge impact on the overall process of economic problem-solving, from mainframes that allow for more efficient inventory management, to smartphone apps that allow willing customers to find the nearest coffee shop. Computers have profoundly enhanced the effectiveness of decentralized economic action.

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sehr guter Beitrag