Economics: The debate over capitalism vs. socialism—decentralized market vs. central planning—was indeed won in the 1920s by the capitalist side, plus Pigou: the market solved the twin problems of information transfer and utilization and incentivization in a way that central-planning simply could not. Thus rather than central-plan everything, you only needed to impose Pigovian taxes and subsidies to correct for externalities, maintain competition, ensure proper aggregate demand, and tweak the distribution of income, and all would be for the best in the best of all possible worlds. Central planning could be relegated to wartime and rapid-development cases in which the overwhelming need was for immediate resource mobilization. But even if the mercenary market institution is—if it can be properly tweaked—better than central command or bureaucracy, is it good enough? We economists should be thinking much more about building alternative institutions with, as Dan Davies says, “higher bandwidth”:

Dan Davies: The Lawson Doctrine <backofmind.substack.com…>: ‘Where did it all go wrong? Lots of places, of course, in different ways and at different times. But the British economy, in the period from about 1986 to 1992 is on my mind…. The “Lawson Doctrine”… that current account deficits… are only a problem if they are accompanied by public sector budget deficits. If they aren’t, then they must have arisen as a result of private sector firms’ and households’ investment and spending decisions, and consequently they are likely to be, to use the phrase of the time “benign and self-correcting”…. If the market worked, the Lawson Doctrine would have worked. The point of the Hayekian economy as information processor is that whenever a private sector transaction happens, information is transmitted through the supply and demand mechanism, and then incorporated into the price mechanism…. The Lawson Doctrine failed because the globalised trade and capital markets of the 1980s were not able to transmit enough information at a fast enough rate. Using the word in its strictest sense—the one which your internet service provider uses in its advertisements—it didn’t have enough bandwidth…