Market design can feed the poor

https://worksinprogress.co/issue/how-market-design-can-feed-the-poor/

by ortegaygasset • 7 months ago

40 25 7 months ago

A highly engineered market can improve resource allocation, but obviously there's no market force actually providing the food being allocated.

dgllghr• 7 months ago

It’s a good thing they had central planning to come up with this system and well defined regulations to ensure it worked appropriately.

megaman821• 7 months ago

Are you trying to suggest that this is an example of a planned economy? Maybe you should look at definitions of planned vs market economies. You still have design and regulation in a market economy.

jimnotgym2• 7 months ago

What absolute rubbish this article is from top to bottom.

A stupid system was replaced by a slightly more effective one... and it was 'markets and economists' that did it! Pure propaganda.

Heres a more efficient system. How much does the food box they give out cost? Say $50? Just give the customers $50 and let them spend it. No more admin

Taek• 7 months ago

I have close acquaintances who will take that $50, spend it on drugs, and then starve to death. If you want them to stay alive, you have to give them non-money.

If everyone spent money like a rational, 100 IQ individual with a moderate amount of schooling on basic financial strategies, it'd be a lot easier to manage a population. Unfortunately, less than half of the population is 100 IQ, and in some areas less than 5% of the population understands a single high school course worth of financial management.

And then of course you have fundamentally irrational actors as well, like drug addicts. IQ and education don't help there, addictions are monsters that swallow people of all socio-economic varieties.

So you have to either let those people squalor, or find another solution.

kiba• 7 months ago

Don't let perfect be the enemy of good. It doesn't need to be 100% effective, just need to be effective enough that it reduces the size of the problem to a manageable size.

Then you can manage the special cases with specialists.

MisterTea• 7 months ago

If you want them to stay alive, you have to give them non-money.

Which can be traded for money.

Believe me, I understand first hand how difficult a heavily addicted person can be. Recovery is a huge process that takes more than just giving someone a safe place to live and food.

jimnotgym2• 7 months ago

I have close acquaintances who will take that $50, spend it on drugs, and then starve to death.

I'm sure we can all think of edge cases. I'm sure there are people who will trade the food for drugs some how. They probably need addiction and mental health help, rather than someone who 'knows what is good for them'

darkwizard42• 7 months ago

Your efficiency is having the $$ spent on goods worth the $$ given. However, the goal of food banks is to spend money on FOOD and make sure the FOOD is given out to those in need (with little wasteage). Efficiency is being measured completely differently than what you are hoping it is measured as.

delfinom• 7 months ago

Because Feeding America doesn't receive monetary donations in that kind of volume to hand out money. They also don't have a "food box". You clearly are speaking from a ivory tower position and it's quite disturbing.

It's a food bank network that uses the monetary donations it receives to support the logistics of moving hundreds of millions of pounds of food to food banks. The value of that food exceeds their monetary donations.

btreecat3• 7 months ago

The system operated in ignorance of what food banks needed.

Clearly the root of the problem. Straw Manning "central planning" is a perverted way to characterize the failure.

sparselogic2• 7 months ago

Straw manning? One of the earliest critiques of central planning was its inability to learn and respond to unforeseen complexity in the real world. https://en.wikipedia.org/wiki/Economic_calculation_problem

btreecat3• 7 months ago

The solution proposed was to adopt a plan from some other centralized committee.

The committee being common to both solutions likely wasn't the problem given the increased success of the second solution. It was the ability to take into account the difference in resource need and utility. That could have been done by the first group, and would have likely produced a better result.

Central planning doesn't require you to ignore the needs of the people you're planning for.

dauertewigkeit• 7 months ago

The article really wants to drive home how bad "central planning" is, but the problem, as per the article, originates from the fact that the food banks themselves are operating semi-independently from Feeding America. So actually the whole problem originates because you already have decentralization, which is the opposite of central planning. And this is a common situation with a lot of public services when they do a half-assed approach of providing the service publicly. Healthcare is a good example.

As per the article, the issue was that due to the food banks operating independently, the food banks were not relying information about their locally sourced food donations to Feeding America. Their solution is a fake currency, basically a way of rationing food from Feeding America. But of course they wouldn't put it in those terms, because of the socialist connotation of the word, "rationing". Instead they call it "market design". LOL. But the point is, Walmart which is more centralized than this operation, has no problem. So actually central planning isn't the issue here. The issue here is that you have a decentralized operation that necessitates a market mechanism.

Politics informed by ideological economists creates the problem. Economists informed by political ideologies create the solution to the problem that only exists because of their design.

sparselogic2• 7 months ago

Funny to see “rationing” used to describe bidding, instead of the clear rationing approach used first: each food bank got an allocation of all foods based on population served.

Just because the new approach accomplished the goals of the old one better, that doesn’t mean it took the old approach’s name. ;)

_rpxpx• 7 months ago

Brilliantly put. Also, the very fact that there are millions of underfed people in the richest country in the world, is itself evidence of the economic failure of markets. As Richard Wolff put it: in a milk shortage, markets allocate milk to the people with the most money - i.e. the least need for milk. That's not efficient.

holbrad• 7 months ago

There generally aren't underfed people in the US. This just simply isn't true.

The opposite is a far bigger issue.

bsingerzero• 7 months ago

Overall I thought the article was interesting!

I did find it funny that multiple times it cited the medical resident match making algorithm as a success. Anyone who has gone through this process knows how horrible of a system it is. You essentially open an envelop that tells your job and location for the next 3-6 years. Hospitals + government love the system because they can artificially reduce resident wages, applicants cannot negotiate job offers.

deepfriedchokes• 7 months ago

Perhaps we should adopt a system that doesn’t create, or rely on, poverty?

didibus• 7 months ago

It's an interesting case study, and I'm glad it worked for them. But I feel there would have been many other ways to solve the problem.

In fact, one thing I'm confused about, and that's not very clear to me, it sounds like prior to this new system, each food bank would just receive a random selection of foods of a given weight. But with the new system, they can choose exactly what foods they want to receive.

If so, this is a huge difference that has nothing to do with the bidding. A lot of the inefficiencies were probably due to this alone. You'd be getting things you don't need and not those you do and it created waste.

Now food banks could pick and choose what they needed.

This even justifies the introduction of bidding. Because once you have a proper catalogue and food banks can choose what they want, you have the problem of what if they all want the same limited quantity items?

You can make it first come first served. Now food banks would compete on being the quickest to enter their order. Or you can do other things, they went with bidding.

From that angle, bidding actually can look a lot fairer and "socialist" than "first come first served".

jjk166• 7 months ago

Given how horribly structured the original system was, I'm pretty sure literally any change would be a massive improvement.

I don't suppose anyone took a look at how that original system came into effect, or why it remained in place for decades. Based on what little was presented in the article, it seems the organization, and likely others in the same camp, are unfamiliar with and/or reluctant to employ continuous improvement techniques.

MrSkelter• 7 months ago

This reads like straight propaganda.

An inefficient system is always going to be ineffective. The author tries to posit that anything that isn’t market based is inherently inefficient and that their Chicago School solution is a success because it’s market based.

None of this is supported with evidence outside the new system working better than the old one.

Militaries efficiently allocate nutrition without markets (it’s the most important work they do) as do grocers.

There are a lot of ways you could improve on this, many not requiring the complexity and overhead of market based solutions.

Market design can feed the poor

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