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originally posted by: ketsuko
What I posted is a piece that simply outlines the massive complexity of market economies and why it's folly to think too much control works well.
But the main point of it is to educate on the sheer complexity of the whole and who interconnected it all is. Most people who argue for massive government intrusion and control mechanisms do not see the whole web and all the pitfalls and interactions.
Interfere too much, and it all unravels.
The '08 crisis was a study in interference.
1) The economy is run from the centre by the
government itself. Central planning replaces
‘the anarchy of the market’. Where the private
sector remains, massive and intrusive regulations
constrain its operation at every turn.
2) Finance and national savings are allocated by
the government into the sectors of the economy
it believes are the most productive. Little, if
anything, is left for the market to determine.
3) Prices are administered by the government, with
the prices of the most important consumer goods
such as for food, housing and energy strictly
4) Production is ‘for need and not for profit’. Guiding
an economy according to profitability is sharply
restricted, if not actually eliminated.
5) Planning of the entire economy replaces the
adjustment processes of the market. The
government does not just watch over the
economy, it runs the economy. Where private firms
are allowed to exist, a high level of regulation
accompanied by high taxation becomes the rule
Property rights are abolished, or at the minimum
strictly curtailed. ‘The resources of the nation
belong to the people’ becomes the principle
underlying the laws relating to property. Only
the ownership of one’s personal belongings is
permitted. Every major enterprise either belongs
to the state, or if nominally still owned by private
entrepreneurs, has all its decisions overseen by
government bureaucracies and subject to