As we all know there are plenty of people out there who think that we should do away with this chaos and disorder of markets and properly plan things. This scientific socialism idea, that clever people acting altruistically will be able to determine what we should all be doing. It’s not so much that such people don’t grasp the point of markets, it’s that they’re not doing very well in understanding science.

From The Science of Discworld IV:

There is a common misconception of the scientific method, in which it is argued that there is no such thing because specific scientists stuck to their guns despite apparent contrary evidence. So science is just another belief system, right?

Not entirely. The mistake is to focus on the conservatism and arrogance of individuals. who often fail to confiorm to the scientific ideal. When they turn out to have been right all along we hail them as maverick geniuses; when they don’t, we forget their views and move on. And that’s how the real scientific method works. All the other scientists keep the individuals in check.

The beauty of this set up is that is would work even if no individual operated according to the ideal model of dispassionate science. Each scientist could have personal biases- indeed, it seems likely they do- and the scientific process would still follow a universe-centered trajectory. When a scientist proposes a new theory, a new idea, other scientists seldom rush to congratulate him or her for such a wonderful thought. Instead, they try very hard to shoot it down. Usually, the scientists proposing the idea has already done the same thing. It’s much better to catch the flaw yourself, before publication, than to risk public humiliation when someone else notices it.

In short, you can be objective about what everyone else is doing even if you are subjective about your own work. So it is not the actions of particular individuals that produce something close to the textbook scientific method. It is the overall activity of the community of scientists, where the emphasis is on spotting mistakes and trying to find something better. It only takes one bright scientist to notice a mistaken assumption. A PhD student can prove a Nobel prize-winner wrong.

It occurs to me that you’d only have to tweak that a little to make it a description of markets. The “market” is the community in which things are tried, we use profit (as a synonym for satisfying consumer desires) instead of reputation but other than that it’s remarkable how similar the two structures are. Given which we can thus see why that centralised planning doesn’t work. For to gain either useful science or a useful economy we need to use that try it and test it method of working out what does actually work.

As an example, Lysenko was just as damaging to Soviet biology as GOSPLAN was to the Soviet economy.