ext_3072 ([identity profile] nancylebov.livejournal.com) wrote in [personal profile] nancylebov 2010-04-04 08:48 am (UTC)

The largest organizations with centralized planning are probably companies. Do you know how much efficiency they gain from it?

If you contemplate what could be done via central planning using modern IT equipment to do near-realtime adjustments of supply requirements to match up against demand

What do you mean by demand? I'm using to it meaning what people are actually willing to pay, as shown by what they do pay.

If the central planners get it wrong (and, afaik, there's no way to get it right-- even people themselves aren't terribly good at knowing what they're going to pay, and I'm willing to be that to the extent they do know, there are preferences they aren't willing to admit to), then you get surpluses and black markets.

The other piece is a measurement problem-- with centralization, it's very tempting to have a goals which are easy to measure, and very easy to get them wrong.

On the market side, you get a couple of examples from GM-- they were measuring number of cars built without caring about the quality, and there was a cargo cult nitwit executive which had the NUMMI (Toyota in the US) factory photographed and duplicated in a GM factory.

Toyota, of course, is an example of a centralized culture (I don't know how much centralized planning they do) which is measuring the right things.


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