<h3>Music, or rather the structure of musical groups, can illustrate economic principles for people who find economics confusing. I take this approach with kids all the time to illustrate how centralized and decentralized economies behave. While a centralized market resembles an orchestra with a strict, gray-haired conductor, a decentralized economy – like the one here on Steemit - is more like an improvisational jam session.</h3>

[ Last year I posted a version of this essay on a much smaller Steemit. Back then, it received four views, no comments, and earned a total of 16 cents. Many Steemians (myself included) believe it's acceptable to revisit an old post, especially if it failed to find an audience, as long as proper disclosure is made. So consider this my disclosure! ]

<h2>Centralized Economies</h2>

<div class="pull-right">http://geke.us/wp-content/uploads/2017/10/conductor.jpg</div>

“The whole duty of a conductor,” wrote Wagner, a 17th century German composer, “is comprised in his ability to indicate the right tempo.” Which isn’t entirely true; conductors also have an editorial role. They interpret the feel of a musical essay, emphasizing passages, drawing volume out or stuffing it down, and they can <i>change</i> the tempo, as well as maintain it.

But conductors are ultimately time-keepers, aiding a large group of musicians who are all just slightly offset from the music’s exact rhythm. Sound is slow, relatively speaking, and a note scraped from the string of a violin won’t reach the viola and the timpani at precisely the same nannosecond. This tiny discrepancy is augmented by the chaotic tumult of notes bouncing off auditorium walls at different angles, frequencies, and trajectories.

The solution – a dictatorship – is provided in the form of a well-dressed man or woman, a slim baton, and a raised platform. The baton’s movement can be seen simultaneously by every musician, as the speed of light transmitting its beat is faster than sound.

Despite its creative essence, an orchestra is not egalitarian and decentralized. It’s hierarchical, with seating arrangements based on ability, and someone in charge. An orchestra is strictly regulated, both for the ease of the musicians and the benefit of the audience. For an orchestra's purposes, central regulation works quite well.

A command economy is regulated in much the same way. Its central directing mechanism, the government, attempts to coordinate economic performance by tapping out the rhythm of production, price, distribution, and demand in order to avoid clinkers like unemployment or shortages.
This approach can be attractive to people. A friend once told me she didn’t trust free-market capitalism because, like Mother Nature, it showed an amazing tolerance for catastrophe. That’s true, I suppose, but command economies, for all their planning and tinkering, also exhibit an amazing tolerance for catastrophe. Soviet communism tolerated staggering levels of inefficiency, waste, and bureaucracy, as well as the more serious problems of poverty, hunger, high infant mortality, and declining life expectancies.

The larger the scale, the harder it is to control an economy. Remember, an orchestra is a tiny group of people to manage. A nation is a different animal, entirely. Like ecosystems, large economies are based on the flexible foundation of decentralized diversity, and their diverse elements don’t scurry around in lockstep. They’re too busy interacting, cooperating, complementing, and competing. This is why command economies can be problematic.

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<center><h4>If the economic tempo is regulated,
it will fall to the pace of its slowest performers</h4></center>

It’s because they’re inherently competitive that economic units don’t perform “in concert.” Whether small businesses, corporations, or individuals, these units don’t achieve their goals simultaneously, nor do they always work toward the <i>same</i> goals. If the economic tempo is centrally regulated, that tempo will fall to the pace of its slowest performers. Imagine, for a moment, the normally allegretto small-town interior decorators on flute and piccolo, while the car manufacturing industry stands in the back on bass. Now tell me: What conductor could orchestrate an economy in which damask draperies kept pace with turbo diesels?

Still and all, if an orchestra (whose individual units must always cooperate) performs well under central regulation, why can’t an economy? Progressivism as a movement has always denied the need for competition and has stressed, instead, economic cooperation. So why wouldn't the tenets of progressive, orchestral cooperation function well in an economy? There are at least three reasons:

<b>An orchestra is tiny; economies are gigantic.</b> What works in the microcosm doesn’t always translate to the macrocosm. An economy is scale-dependent. A small socialist-structured family doesn't scale up to the size of a national economy and continue to work in the same way.

<b>An orchestra is ordered; economies are chaotic.</b> You can’t substitute a yin for a yang. An order will emerge from decentralized chaos, but not through manipulation.

<b>An orchestra’s performance is finite; economic performance is ongoing.</b> Even the best disciplined orchestra would fail trying to achieve lockstep over weeks or decades.

Markets, industries, even employees perform at different tempos: rubato, a musical term meaning “rhythmic flexibility within a phrase or measure; a relaxation of strict time.” Economies are rubato-paced entities, just like nest-building termites, traffic patterns, even some other types of musical ensembles.

<h4>Everyone the leader and no one the leader</h4>

“Consider a rock-and-roll band during a leaderless jam,” writes <i>Metapatterns</i> author Tyler Volk, a biology professor in N.Y. University’s Earth Systems Group. “The song’s initial rhythm and melody are submerged, and the minute-to-minute sinuous themes vary as leadership is tossed around. One musician and then another picks up on expressive tidbits, which seem to emerge, grow, and then recede, to be replaced, as if by magic – everyone the leader and no one the leader.”

There’s cooperation, there’s complement, and there’s even competition in improvisational music that moves fast, then slows, booms loud, and then softens. That's a decentralized free-market economy.

You can witness the same type of environment here on Steemit. First, there's competition between accounts. We all post hoping to earn upvotes and we know that an upvote for us is one less upvote for another. That's because voting power is a limited resource. After 10 or so upvotes, your voting power is diminished.

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But in our decentralized economy we also find that cooperation improves our ability to compete for upvotes. We've created subcommunities and formed relationships and this aids in the overall economy's level of exchange. As community develops, the economy grows, bringing in fresh voting power and new relationship / exchange possibilities. It's all voluntary, and nobody's in charge. We each do our own thing, and our individual contributions <i>combine</i>.

Welcome to the decentralized blockchain and our leaderless Steemit jam.

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