Wig,
On your second comment, I think it's pretty much the same reason that capitalism works. In the long run, a weighted summation of behavior will benefit more people than the individual decision-making of any one of them. The same with bees. It's thought some bees dance more excitedly to reflect a better site for a new hive (or more nectar) than other bees. Bees that return to the hive without finding anything of note don't dance. Bees that find a field of flowers return very excitedly. More bees then leave to check out the various sites. The excited bees elicit more responses than the non-excited beeds. It's an accumulating effect.
It's sort of a logical solving machine. The buzz phrase is "emergent behavior".
Such systems are not perfect and they are conditional. Capitalism cannot force urbanization or education at nearly the rate that a Mao Zedong or Joseph Stalin can. This explains why poor small-economy socialist states can often grow faster than their capitalist counterparts. In the end though,
such economies have always bogged down under the weight of planning. They tend to be very poor, as we all of course know, at adjusting to new markets and preferences. Soviet slowness in adapting the microchip for military purposes is an excellent example.
One might wonder if the problems such states always eventually reach could be eliminated by computerized planning and pricing. Could a computer program set prices in a way more rational than the free market? I think that doesn't make sense. Since half of the equation is what humans are willing to pay for products, market participants would have to be polled in some way. This is exactly what a capitalist market already does.
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