483 sats \ 2 replies \ @Undisciplined OP 29 Nov 2023 \ parent \ on: Meta Econ Takeover Day 43 (I think) meta
Accidental double zap. At least it's a good comment.
The only quibble I have is about the incentive point. In the standard sense, central planning introduces the incentive problem that workers don't get paid more in proportion to how productive they are. There are enormous incentives to do whatever it takes to not get punished, but that isn't the same as being more productive necessarily.
The Soviet joke "We pretend to work and they pretend to pay us." comes to mind.
Mises' great insight was that the fundamental problem of central planning is the knowledge problem. In a way the incentive problem is just one example of the knowledge problem. It's a type of principal-agent problem that central planners can't solve because they aren't able to measure productivity accurately.
I sent half of the zaps back to your reply plus my usual zap amount in an attempt to fix the accidental double zap.
I agree with you that under dictatorial central planning, there is a huge incentive problem, as people don't truly want to be productive and, like you said, "are pretending to work".
I think when Safedean said that there is not an incentive problem, he might simply be trying to emphasize the economic calculation problem. Maybe downplay the incentive problem a bit to put focus on the economic calculation problem. I think he believes that the economic calculation problem is the true root cause and also the biggest problem causing central planning to fail everytime. Just my speculation though, not trying to put words in his mouth.
reply
I'm sure that is Safedean's view, because he's a devotee of the Austrian School of Economics and that's one of their most famous contributions to economic thought.
reply