Central Planning

Lack of central planning isn’t the same as lack of planning.  I thought I had this original thought recently.  Then I opened Sowell’s Intellectuals and Society to the pages I had marked for quoting on this blog and this was the first one I came to (p. 53):

Despite the often expressed dichotomy between chaos and planning, what is called “planning” is the forcible suppression of millions of people’s plans by a government-imposed plan.  What is considered to be chaos are systemic interactions whose nature, logic and consequences are seldom examined by those who simply assume that “planning” by surrogate decision-makers must be better.

It turns out, I had read it some weeks back and it must have just registered in my long-term memory.

Sowell’s point works well with this insight from Steven Landsburg, that believers in central planning have been led astray by visions of smaller-scale versions of  planning like planning a birthday party, because we cannot comprehend bigger, non-centrally planned things like a free market made up of billions of individuals.

I’m not sure that the whole problem is that we can’t imagine a big system.  I think another part of a problem is imagining a big system that doesn’t have a central goal.  A birthday party or sending a man to the moon has a goal.  It’s much harder to define such a clear and achievable goal for the economy.  Things like “reducing poverty” or “achieving X% growth in GDP” or “X millions of jobs created or saved” are not clear and achievable, mainly because they are immeasurable making them difficult to determine if they were achieved.

We can’t imagine that a birthday party or getting a man to the moon would happen if somebody didn’t set the goal and go about planning to make it happen.  We don’t believe the faceless market would achieve such goals spontaneously.  And it doesn’t.  Markets don’t make things happen, people do.   The market is just people interacting with each other.

The birthday planning that Landsburg’s writes about is one of the millions of people’s plans that Sowell writes about.

Each of us plan every day.  How much food do we need for the next week?  How much should we set aside for retirement and education?  How much TV should we watch and how much exercise should we get?  Do I need gas for the mower?  Which road am I going to take to get there?

What emerges is a market.  Farmers in Kansas don’t make plans on planting each year based on some dictate from Washington DC that each person gets X amount of bread each day.  Farmers respond to the plans each of us makes and the resulting actions for the products we buy that contain wheat through prices.

And that works rather well most of the time.

When it appears to not work well, we find people unwilling to consider sources of problems other than greed and the abstract free market seeking to infuse their wisdom and will through the force of government.

2 thoughts on “Central Planning

  1. Speaking of Sowell, if you have a twitter you can send Uncommon Knowledge questions to ask him for an upcoming episode.

    I think most of it has to do with man’s innate need for control. People need to have some control over something, anything or they stress themselves out, it’s hard wired into our brains. Central Planning gives people that control.

    What I find interesting is how religion plays into it as well. If you think about it, the people that give control over to a higher power have a much easier time accepting the chaotic free market, then those that don’t accept a higher power. I’m weird, in that I don’t believe in a higher power and believe in the powers of the market, wisdom of the masses, and the Hayekian notion of spontaneous order.

    Spontaneous order is real interesting because, those that believe solely in evolution. You know, those liberals that are “so scientific” (Sarcasm implied), they cannot accept the idea of spontaneous order in the market. But they do (I doubt they really do, I think they are just trying to be scientific because it’s the hip thing to do) accept some spontaneous order if they want to keep their belief in evolution. You ever notice that?

  2. Good tip on Twitter. I’ll have to set that up. I’m not on it that much. I’m a late adopter.

    I have noticed that paradox in thinking. That’s a excellent idea for a blog post and discussion.

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