Maximizing Economic Output With Linear Programming...and Communism (medium.com)

Slashdot reader mkwan writes: Economies are just a collection of processes that convert raw materials and labour into useful goods and services. By representing these processes as a series of equations and solving a humongous linear programming problem, it should be possible to maximize an economy's GDP. The catch? The economy needs to go communist.
"[P]oorest members would receive a basic income that gradually increases as the economy becomes more efficient, plateauing at a level where they can afford everything they want to consume," argues the article, while "The middle classes wouldn't see much change. They would continue to work in a regular job for a regular -- but steadily increasing -- wage... Without the ability to own real-estate, companies, or intellectual property, it would be almost impossible to become rich, especially since the only legal source of income would be from a government job."

Comments

Consider a Spherical Cow

[goombah99]

Ecomonies are not a collection of processes all known. They are a collection of agents, mostly unknown with hidden internal states. Another way of saying this is that gathering information for centralization cost money. Economies process that information at many local and global levels and don't share it past the point of economic efficiency. That's in an idealized system. In an non-indeal system there's even wrong ideas.

A classic example of this is the maxim that the bad apples drive out the good apples. Meaning if you can't tell the difference between a good tasting apple and a bad tasting apple from the look (without tasting it) and if it costs less to produce a bad apple then the good apples won't sell as they are indistinguishable. In order to sell those apples you need to incur some cost. Do something that actually raises the price or lowers the profit like constitute an apple certification board, and set up a set of agents to test apples regularly for different farms, and persuade the consume your certification is valuable by giving away free taste demos. Otherwise there isn't information available to make a decision other than price. A similar thing occurs in how bad (debased) money drives the good (full gold) money out.

You can create systems to optimally manage agent based systems. Interesting there is work now that shows how denying information to consumers can increase econmoic efficiencies as well. This should come as no surprise to people familiar with Braes paradox in traffic control.

One of the core faults of communism is that while it can achieve some good results from linear programming notions of optimality is that it ignores that capitalist economies actually are information gathering systems that are very efficient).