The Impossible Takes a Little Longer: Let me also add that I focused on the obstacles in the way of planning because I was, at least officially, writing about Red Plenty. Had the occasion for the post been the (sadly non-existent) Red, White, and Blue Plenty, it would have been appropriate to say much more about the flaws of capitalism, not just as we endure it but also it in its more idealized forms.
"Shalizi's discovery of Sweden" I took it to be obvious that what I was advocating at the end was a rather old-fashioned social democracy or market socialism — what Robert Heilbronner used to call a "slightly imaginary Sweden". The idea that the positions I like are at all novel would be silly….
For the record, I think it is a horrid mistake to think or act as though the level of inequality is constant, or that current institutional arrangements within capitalism are either unalterable or very good. I also think that spending thirty years deliberately dismantling safe-guards, out of a mixture of ideology and greed, was criminal folly. Red White and Blue Plenty would also have a lot to say about economists' dreams — and their zombies — and the effects of chasing those dreams.
I don't see, though, that it's so obvious how to make things better now. It's pretty clear, I hope, that defined-contribution, 401(k), retirement plans have been a colossal failure… but going back to the sort of defined-benefit plan which presumes long-term employment by a single stable firm is also a non-starter…. Or, again, the inequalities in public education in this country are obscene, and make a mockery of even stated conservative ideals, but even if we swept away obstacles like local and state school boards, funding from local property taxes, etc., is it really clear what a better system, that works under modern American conditions, would be? That we'd get it right the very first time? Or, saving the most important for last, does anyone seriously want to say that coming up with viable institutions to strengthen workers' bargaining power is straightforward?…
Look, I didn't make up "shadow prices"; that's standard terminology, though if you don't like it, feel free to read "objectively-determined valuations", or even "Lagrange multipliers", throughout…. Decentralized planning sounds nice — though it was not what was being discussed in Red Plenty but inevitably those plans are going to have to be coordinated. How? Processes of bilateral or multilateral mutual adjustment are going to have lots of the features of markets — again, I'm not going to insist that this could only be done through markets — but the alternative would seem to be central authority.
Cockshott, and More Equations The most important issue raised, I think, was the claim that Cockshott has shown that central planning is computationally tractable after all. I don't agree…. What is bad is completely assuming away having to chose what to make and having to chose how to make it. Kantorovich was not, after all, led to consider the allocation of production across alternative techniques through idle mathematical whims, but because of real, concrete problems facing industry--and such problems keep coming up, which is why linear programming got re-invented in the West….
Parallelism is very important, and it's what distinguishes what you can do with a (modern) supercomputer as opposed to a (modern) desktop, much more than raw clock speeds. To the best of my knowledge--and I would be very happy to be wrong here, because it would really help with my own work--to get any real speed-up here easily, your constraint matrix C needs to be not just sparse, but also very specially structured, in ways which have no particular plausibility for economic problems…. If your matrix is sparse but unstructured, your best hope is to treat it as the adjacency matrix of a graph, and try to partition the graph into weakly-coupled sub-graphs…. Of course, if we have such a decomposition, each processor becomes its own center of calculation and control, as I alluded to, and we need to worry about coordinating these centers. Which brings us back to where we were before….
Innovation This is obviously hugely important, but I didn't say anything about it because I really don't understand it well enough. There's no question that the economies of the capitalist core have been very good at developing and applying new technologies. It's also obvious that governments have been intimately involved…. Now whether this can only be arranged by giving a slightly-random selection of inventors really huge pools of money after the fact is not at all clear. If they do need to be motivated by rewards, above some level of personal comfort, what more money provides is bragging rights and adulation. Might this not come as well from medals and prizes as from money?…
This brings me to non-market signals. I think it would be a very good thing to have many different ways of getting feedback from consumers to producers about what to make and how, beyond the market mechanism. (If not nothing else, markets as institutions would be healthier for the competition.) So the suggestion by "Nobody" that "every good Web 2.0 site is a non-pricing/market solution to revealing preferences" is quite interesting. But it seems to rest on a number of peculiarities of online informational goods...