"Really fascinating piece by +John Robb (via +Glyn Moody (@glynmoody)) outlining the idea that concentration of wealth in the US has led to what is, in essence, a centrally planned economy, with all the ills that entails. This is one of those eye-opening connect-the-dots pieces that everyone should read.
Robb writes:
"Of course, the misallocation due to centralized decision making wasn't supposed to be a vulnerability of the West. To allocate resources in our economy, we had a conceptually more efficient mechanism: markets. Markets are supposed to be a mechanism that allows massively parallel decision making.
"Those assumptions are proving false. The succession of market bubbles, the global financial collpse of 2008, and the recent US debt problem is prima facie evidence that gross misallocation has occurred for decades. The wealth of the West, particularly the US, is being spent on the wrong things year after year, decade after decade. We are now as fragile as the Soviet Union in the late 80's.
"What happened?
"Central planning took over the decision making process in the US, both through the growth of government and through an unparalleled concentration of wealth...
"The parallels between the rapid growth of US government bureaucracy and the Soviet bureaucracy is straight forward. As more and more of US economy was controlled by a narrow group of decision makers allocating government resources, the more sluggish the entire economy became (most of this was due to massive growth and mis-allocation in entitlements and defense). Further, the ability of government bureaucracies to extend their decision making to remaining majority of the economy through regulatory action, is also a form of centralization. However, even with all of this government growth, it's is still not enough to account for the level of misallocation we are seeing.
More @ bit.ly/pnFTXa
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