We got to the point of thinking that if all that was needed to solve a pressing problem was more computing power, then we could consider it solved; not today, perhaps, but certainly tomorrow.

There are at least three things wrong with this. The first is that many of humankind’s most pressing problems cannot be solved by computing. This is news to Silicon Valley, but it happens to be true.

It’s also news to all those who would plan the economy. Allende was one of those who fell prey to this delusion - computers were going to run that Socialist Chilean economy. But it’s been a phantasm all the way back to those first stirrings of scientific socialism. If only we could calculate then we’d be able to plan!

No, actually, we can’t. We do not have, cannot have, the information required to feed into the starting point of however much computing power we have available.

While Hayek was right here, an excellent outlining of the problem in detail is this. The most important part of which - after the intractability of the actual computing problem - is what is it that we’re trying to plan?

We want to optimise some form of social utility function. OK, so what is that? The sum and aggregation of all of the individual utility functions, obviously. So, what are they? Well, we don’t know. Because utility functions are something we back calculate. We observe what people do given what’s available then write that down. But if we have to observe behaviour in order to work out what people want then we cannot plan what will be made available as we don’t know what will maximise utility in that new situation created by the plan. We can’t just ask people because that’s expressed preferences and we know that doesn’t define utility - revealed preferences do.

Naughton is quite right, not all problems are amenable to more computing power. The direction and planning of the economy among them.