Comment by wqaatwt
1 hour ago
Well my point was that it might be optimal for the one doing the allocation and maximize their returns. That does not mean its optimal for the economy and society on the whole.
1 hour ago
Well my point was that it might be optimal for the one doing the allocation and maximize their returns. That does not mean its optimal for the economy and society on the whole.
Actually it does mean it is optimal for the economy as opposed to a central planner who somehow has all the information and does planning with precision. These are mainstream views in economics.
Actually markets are always rational, perfectly efficient and there are no speculative bubbles? Of course not.
So its obviously suboptimal, only question if there is a more optimal system.
> central planner who somehow has all the information
Every developed country is balancing that with free markets and its the mainstream view that a balanced system is optimal (the exact ratio is of course something’s that not quite settled).
Yes and going back to the your original question
> Assuming that the allocation of capital is somehow aligned with what’s optimal for the economy/society seems naive
The empirical facts are that the disposable real wages have gone up by more than 50% over the last 20 years. People are way richer now than before and the growth in USA is much higher than any other developed nation other than small edge cases.