The thing is, you don’t have to centralize the entire economy in order to be positioned to solve for the difficult problems facing us. But I think having a robust long-term looking economic planning in the sectors everything else rests upon, like energy, natural resources, transportation, logistics, education, care, housing, banking, finance, basic research, defense, food, electronics components, chips etc. itself produces small firms that can do new things much easier due to the availability of materials, equipment, capital and labour at low costs. This doesn’t mean that for example every chip made would have to be planned by someone in the capital. Nothing of the short. It means that the planner says, we need to have the designs and ability to mass produce low cost, high performance RISC-V cores for PCB integration by 2025. Then Huawei and SMIC get their shit together and assemble teams to do this. If they need more capital they get it. If there’s someone who wants to start working on a design with a new team, there’s going to be capital available for a startup. Once the core is in production, that core becomes an input for other large and small firms, or individuals who want to do something with a low cost processor in it that now have a viable path to form new firms. This is why there are a shit ton of small Chinese firms making innovative consumer items. This is why US firms keep explaining how they can’t possibly make this or that product in the US in the context of tariffs. When everyone downstream from them is profit maximizing, their inputs become prohibitively expensive. Someone was talking about how much it would cost to source a small neodymium magnet motor for a consumer pump made in the states and said it’s so expensive that it’s only viable for defense, aerospace and such. And then the neodymium still comes from China.
The consumer parts of the economy where you have smaller firms with interesting products often sits at the tip of the existing supply chains and infrastructure. Perhaps use them differently. That’s also true for local breweries as they rarely grow their hops, wheat or build their own equipment from bare metal, or mine the metal.
But even in the consumer sector here (Canada), most of the aisles in our grocery stores are filled by the products of a handful of companies. PepsiCo, Coca-Cola, Unilever, Colgate-Palmolive, Kraft, Nestle, Kellogg’s, Danone, Mars, Mondelez and the store brand. Then you have Big Ag product filling the produce and meat section from the usual suspects. Outside of who provides these firms with direction and who collects their profits, they’re what state-owned enterprises look like.
It means that the planner says, we need to have the designs and ability to mass produce low cost, high performance RISC-V cores for PCB integration by 2025.
But this is the hard part. Who is qualified to say that RISC-V is the way to go instead of x86? An elected politician? Experts? If experts, how do you select them? Who checks they really are experts? Who holds them accountable?
If there’s someone who wants to start working on a design with a new team, there’s going to be capital available for a startup.
Who and how decides if a startup is worthy of funding? How do you prevent ideas being rejected for personal reasons, e.g. religious objection? How do you prevent fraudulent startups?
If they need more capital they get it.
Who and how decides when it is no longer worth it? How do you avoid fraud, wastefulness, etc.?
The same way decisions are made in large public (state owned*) or private firms as well as public service institutions in our systems. People get hired and do these kinds of decisions across such institutions all the time. All of these issues are tackled and there are imperfect solutions that with all the pitfalls and mistakes work alright.
* Actually I’m not sure if the US does state corporations but we do in Canada. For example in rail, air travel, nuclear power (design and implementation), telecom, housing, etc. Of course we’ve privatized many of them with not so great results for the public, just like the UK did. They’ve made a lot of money for their private shareholders though.
Yeah, my parents work for a public utility. The level of waste, inefficiency and corruption there is comical. It may still be fine for core infrastructure like utilities to be that inefficient in order to be reliable, but certainly not for normal industries.
Or maybe my country is particularly bad at running them.
My anecdote is that I’ve worked for 3 major Canadian private corporations (10000-100000 employees). Currently working in a major American corporation. My wife works for a Canadian public institution. I know a few others who work at large Canadian corporations. The waste and inefficiency at the corporations (banking, telecom, food) is staggering and similar between them despite the different sectors they operate in.
The one I’m currently at (a well-known name) just canceled a 4-year old program that 75% of the software engineering teams worked on, because the leadership finally figured out that we can’t deliver it fast enough with sufficient quality to support hardware going in production. That has been obvious to a lot of us in engineering for at least 2 years and we’ve kept raising the alarm. The new hardware is now going to ship with the old software stack, some people would get reassigned, others laid off *, no one outside would ever hear about what happened. The profit figures are going to go up due to the decreased labour cost and there would be no new costs down the line since the program was mostly pointless to begin with. Our current software stack is more than good enough to last us at least another decade. The initlal program was sold to us by a third party corpo as something that could reduce cost over time. It was a lie that worked because of massive undercount of labour. Things like this happen all the time in large private corporations. I’ve seen it more than once myself.
In contrast, my wife’s public institution is way more careful with how money is spent, how and who they hire, and they pay less for most positions. They’re constantly understaffed and overworked.
And yet all of the above deliver decent products and services to people. The corporations I’ve worked for make significant profits. They keep their prices as high as they can be and their product design and marketing is such that they sell as much as they could, trying to increase every quarter.
Given my experience and what I’ve read so far in my life I’ve come to the realization that inefficiency isn’t dictated so much by the type of institution or even the market pressures it faces. Rather the primary driver is complexity. I think all large enough organizations develop similar structures and problems as they’re inherent to any social activity with imperfect information.
* Actually the cost of that mismanagement doesn’t end at the layoffs. Layoffs externalize a part of the cost of the mistake to the rest of society - workers families, social programs, healthcare, political stability, etc. I.e. the cost is socialized.
Big doubt on the size being the main factor, though it contributes. IMO the main factor is scarcity. An underfunded large organization will find way to operate efficiently. See NASA or some large charities.
A small startup with nearly unlimited Venture Capital will most of the time find a way to squander that money and get results that shouldn’t take tenth of the money.
The difference being that there are natural mechanism to correct waste in private companies, if it becomes significant compared to its scale. A public company often won’t have the same. E.g. which politician is going to go order layoffs? Hope he does not plan to get elected again. I think there is a good chance, if your company was public, the sw engineers would still be wasting time and resources. Perhaps on a different pointless project.
And that is before even addressing outright corruption and embezzlement.
The thing is, you don’t have to centralize the entire economy in order to be positioned to solve for the difficult problems facing us. But I think having a robust long-term looking economic planning in the sectors everything else rests upon, like energy, natural resources, transportation, logistics, education, care, housing, banking, finance, basic research, defense, food, electronics components, chips etc. itself produces small firms that can do new things much easier due to the availability of materials, equipment, capital and labour at low costs. This doesn’t mean that for example every chip made would have to be planned by someone in the capital. Nothing of the short. It means that the planner says, we need to have the designs and ability to mass produce low cost, high performance RISC-V cores for PCB integration by 2025. Then Huawei and SMIC get their shit together and assemble teams to do this. If they need more capital they get it. If there’s someone who wants to start working on a design with a new team, there’s going to be capital available for a startup. Once the core is in production, that core becomes an input for other large and small firms, or individuals who want to do something with a low cost processor in it that now have a viable path to form new firms. This is why there are a shit ton of small Chinese firms making innovative consumer items. This is why US firms keep explaining how they can’t possibly make this or that product in the US in the context of tariffs. When everyone downstream from them is profit maximizing, their inputs become prohibitively expensive. Someone was talking about how much it would cost to source a small neodymium magnet motor for a consumer pump made in the states and said it’s so expensive that it’s only viable for defense, aerospace and such. And then the neodymium still comes from China.
The consumer parts of the economy where you have smaller firms with interesting products often sits at the tip of the existing supply chains and infrastructure. Perhaps use them differently. That’s also true for local breweries as they rarely grow their hops, wheat or build their own equipment from bare metal, or mine the metal.
But even in the consumer sector here (Canada), most of the aisles in our grocery stores are filled by the products of a handful of companies. PepsiCo, Coca-Cola, Unilever, Colgate-Palmolive, Kraft, Nestle, Kellogg’s, Danone, Mars, Mondelez and the store brand. Then you have Big Ag product filling the produce and meat section from the usual suspects. Outside of who provides these firms with direction and who collects their profits, they’re what state-owned enterprises look like.
But this is the hard part. Who is qualified to say that RISC-V is the way to go instead of x86? An elected politician? Experts? If experts, how do you select them? Who checks they really are experts? Who holds them accountable?
Who and how decides if a startup is worthy of funding? How do you prevent ideas being rejected for personal reasons, e.g. religious objection? How do you prevent fraudulent startups?
Who and how decides when it is no longer worth it? How do you avoid fraud, wastefulness, etc.?
The same way decisions are made in large public (state owned*) or private firms as well as public service institutions in our systems. People get hired and do these kinds of decisions across such institutions all the time. All of these issues are tackled and there are imperfect solutions that with all the pitfalls and mistakes work alright.
* Actually I’m not sure if the US does state corporations but we do in Canada. For example in rail, air travel, nuclear power (design and implementation), telecom, housing, etc. Of course we’ve privatized many of them with not so great results for the public, just like the UK did. They’ve made a lot of money for their private shareholders though.
Yeah, my parents work for a public utility. The level of waste, inefficiency and corruption there is comical. It may still be fine for core infrastructure like utilities to be that inefficient in order to be reliable, but certainly not for normal industries.
Or maybe my country is particularly bad at running them.
I don’t doubt your parents’ anecdote.
My anecdote is that I’ve worked for 3 major Canadian private corporations (10000-100000 employees). Currently working in a major American corporation. My wife works for a Canadian public institution. I know a few others who work at large Canadian corporations. The waste and inefficiency at the corporations (banking, telecom, food) is staggering and similar between them despite the different sectors they operate in.
The one I’m currently at (a well-known name) just canceled a 4-year old program that 75% of the software engineering teams worked on, because the leadership finally figured out that we can’t deliver it fast enough with sufficient quality to support hardware going in production. That has been obvious to a lot of us in engineering for at least 2 years and we’ve kept raising the alarm. The new hardware is now going to ship with the old software stack, some people would get reassigned, others laid off *, no one outside would ever hear about what happened. The profit figures are going to go up due to the decreased labour cost and there would be no new costs down the line since the program was mostly pointless to begin with. Our current software stack is more than good enough to last us at least another decade. The initlal program was sold to us by a third party corpo as something that could reduce cost over time. It was a lie that worked because of massive undercount of labour. Things like this happen all the time in large private corporations. I’ve seen it more than once myself.
In contrast, my wife’s public institution is way more careful with how money is spent, how and who they hire, and they pay less for most positions. They’re constantly understaffed and overworked.
And yet all of the above deliver decent products and services to people. The corporations I’ve worked for make significant profits. They keep their prices as high as they can be and their product design and marketing is such that they sell as much as they could, trying to increase every quarter.
Given my experience and what I’ve read so far in my life I’ve come to the realization that inefficiency isn’t dictated so much by the type of institution or even the market pressures it faces. Rather the primary driver is complexity. I think all large enough organizations develop similar structures and problems as they’re inherent to any social activity with imperfect information.
* Actually the cost of that mismanagement doesn’t end at the layoffs. Layoffs externalize a part of the cost of the mistake to the rest of society - workers families, social programs, healthcare, political stability, etc. I.e. the cost is socialized.
Big doubt on the size being the main factor, though it contributes. IMO the main factor is scarcity. An underfunded large organization will find way to operate efficiently. See NASA or some large charities.
A small startup with nearly unlimited Venture Capital will most of the time find a way to squander that money and get results that shouldn’t take tenth of the money.
The difference being that there are natural mechanism to correct waste in private companies, if it becomes significant compared to its scale. A public company often won’t have the same. E.g. which politician is going to go order layoffs? Hope he does not plan to get elected again. I think there is a good chance, if your company was public, the sw engineers would still be wasting time and resources. Perhaps on a different pointless project.
And that is before even addressing outright corruption and embezzlement.