Re: Participatory Planning

[Allin Cottrell <cottrell@xxxxxxxxxxxxxxxxx>]

Following up on some earlier comments on evolution and
markets, I am posting a small chunk of a piece that Paul
Cockshott and I have in progress.  Its context is a critique
of Hayek's 1945 AER article, "The Use of Knowledge in
Society"...

If one views the problem of economic optimisation as a
computational question, it hinges on how a multiplicity of facts about
production possibilities in different branches of the economy
interrelate. The interrelation of these facts is, partially, an image in
the field of information of the real interrelation of the branches of the
economy. The outputs of one activity act as inputs for another: this
is the real interdependence. In addition to this real interdependence,
there are potential interactions where different branches of
production function as alternative users of inputs.

It is important to distinguish the two types of interaction. The first
represents real flows of material. The second, the variation in
potential uses for goods, is not a property of the real economy but
of the phase space of possible economies. As such, these are part
of the 'economic problem' insofar as this is considered to be the
search for optimal points within this phase space. In a market
economy, the evolution of the real economy, the real
interdependencies between branches, provides the search
procedure by which these optima are sought. The economy
describes a trajectory through its phase space. This trajectory is the
product of the trajectories of all of the individual economic agents,
with these agents deciding upon their next position on the basis of
the information they get from the price system.

If we consider this search procedure, it obvious that while there
is a great deal of parallelism going on -- lots of people making
decisions at the same time -- nonetheless the whole search
procedure is single-threaded. Taken as a whole, the state space of
the economy is a Cartesian product of the state spaces of its
components, and within this total state space, the economy is
located at a unique point at every moment in time. It can only visit a
small proportion of the possible set of solutions, and for it to
progress towards anything other than a local optimum presupposes
a particular and very simple topology to the space. In this sense, the
development process of an economy differs from the process of
biological evolution. A species evolves towards increasing
adaptation to its environment by a highly parallel process. The state
space in this case consists of the genetic code. But a species is not
in one position in this space at any one time: it is at as many
positions as there are individual members of the species, each with a
unique combination of genes. A species represents a neighbourhood
in gene space. It applies a parallel search procedure: millions of
alternative designs are produced and compared each generation.

Although a market economy can to some extent emulate this in
the area of product development within individual competitive
markets, the economy as a whole acts as a single processor.
Moreover, this processor operates with a very slow cycle time,
since the transmission of information is bounded by the rate of
change of prices.

So a market economy performs a single-threaded seach through
its state space, with a relatively slow set of adjustments to its
position, the speed of adjustments being determined by how fast the
real economy can move. Contrast this now with what can
potentially be done if the relevant facts can be concentrated, not in
one place -- that would be impossible -- but within a small volume
of space -- a few tens or hundreds of cubic meters. If the
information is gathered into one or more computing machines, these
can search the possible state space without any change in the real
economy.

Given the requisite information, one can make many copies of it
and allow genetic algorithms to perform a parallel search through
many different alternative states of the economy. From this point of
view, the model of genetic evolution is much more feasible in a
planned economy than in a market economy.


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Allin Cottrell
Department of Economics
Wake Forest University
cottrell@xxxxxxxxxxxxxxxxx
(910) 759-5762
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