Dwarkesh Patel: evaluation

Transcript context

…Well, the market’s not solving for a general equilibrium. It’s just solving for something that gets us into the next day. And that’s a big part of the triumph, just living to fight another day, wealth not going down, not everyone quitting. And if you can do that, things will get better. And that’s what we’re pretty good at doing, is just building a sustainable structure. And a lot of it isn’t sustainable, like the fools who start these new small businesses. But they do pretty quickly disappear, and that’s part of the market as well. So, if you view the whole thing in terms of computing a general equilibrium, I think one of Hayek’s great insights is that’s just the wrong way to think about the whole problem. So, lack of computational ability to do that doesn’t worry me for either the market or planning, because to the extent planning does work, it doesn’t work by succeeding at that. Like Singaporean public hospitals don’t work because they solve some computational problem. They seem to work because the people running them care about doing a good job. And enough of the workers go along with that. Yeah. So, related to that, I think in the meaning of competition, he makes the point that the most interesting part of markets is when they go from one equilibrium to another, because that’s where they’re trying to figure out what to produce and how to produce it better and so on, and not the equilibriums themselves. And it seemed related to the Peter Thiel point in zero to one. That monopoly is when you have interesting things happen because when there’s just competitive equilibrium, there’s no profits to invest in R&D or to do cool new things. Do those seem like related points? Am I reading? Absolutely. And Hayek’s essay competition as a discovery process or procedure makes that point very explicitly. And that’s one of his handful of greatest essays, one of the greatest essays in all of economics.…

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