Comment by 1718627440 8 hours ago
> This is confused. Here is how classical economists would frame it: a firm chooses how much to produce based on its cost structure and market prices, expanding production until marginal cost equals marginal revenue. This is price guided production optimization, not central planning.
That's the case in a healthy competitive market. Once you have a monopoly or an oligopoly, you get into central planning territory.
I agree, that this discussion isn't based on proper economic terms, but on laymen understanding.
The claim isn't that it is exactly like central planning like a state, but very similar through the view on the whole society. You have a powerful caucus, no longer bound by reality (competition), making decisions, that they think are good, which effectively set the pace for the whole economy field. Whether this caucus formed through rigged elections or by inheritance of companies isn't all that relevant. It would be quite a different story, if the state would enforce its monopoly on (political) power and governing, but it refuses to do so now-a-days.
> The relevant questions for oligopolies (strategic behavior, barriers to entry, tacit collusion) are completely different from central planning questions (calculation problems, information aggregation, incentive alignment).
The observation on these oligopolies, that are now larger than some states is, that they seem to lack in their strategic reasoning and are more built on vibes of their leader, which is subject to blindness due to sycophants, much like in an authoritarian regime. Also they tend to treat the whole market as their internal planning problem.
> but here in the case of economics, we don’t need to bend words when other fitting concepts are readily available and battle-tested.
I think a majority of commenters on HN are not as well-versed in Economics as you, so would value elaboration on modern monopolies. I think they differ a bit from classical monopolies in their amount of ties to the government and interference into elections. Not that lobbying isn't typical for monopolies, but modern monopolies seem to not need to lobby anymore, but simply do and dictate.
Ok, but recall the context (see above): I’m saying one can understand how firms operate without making a connection to central planning (setting production targets and investment decisions from the top-down without prices).
Economists have concepts and models for monopolies and oligopolies — and the way they operate are quite different from the practice of central planning.
I’m talking from within the frame of economic concepts, and I’m striving to use words as understood in the field. At times I value metaphorical thinking, but here in the case of economics, we don’t need to bend words when other fitting concepts are readily available and battle-tested.
An example: If someone calls corporate consolidation “central planning,” they’ve lost the ability to analyze it properly. The relevant questions for oligopolies (strategic behavior, barriers to entry, tacit collusion) are completely different from central planning questions (calculation problems, information aggregation, incentive alignment).
When technical fields have already solved a conceptual problem through careful definition and model building, importing loose metaphorical language degrades analytical clarity.
If you want to point to or propose a different model than the usual economic dogma, I’m all ears, by the way.