Why Central Planning Inevitably Fails

Why Central Planning Inevitably Fails
  1. Central Planners (CPs) don’t have the integrity

No person, or group of persons, is bias or interest free, therefore, any CPs will always have interests which sway their judgement away from the “common good” and towards the good of themselves or their own sphere. Mother Theresa is not going to be our CP.

2. CPs don’t have the information or knowledge

As laid out by Friedrich Hayek in “The Road to Serfdom,” no person or group of persons can have or process the knowledge necessary to make decisions “for the good of the whole.” There are too many details, too much flux, and too many conflicting interests for such judgements to be centralized. Individuals making their own decisions on a daily basis create a better outcome.

3. Errors, instead of being isolated learning opportunities, are system wide and never admitted to.

The Great Famine in China was the result of many poor decisions, imposed universally. One example was the decision to kill off swallows, nationwide, under the theory that they were eating rice and reducing the harvest. Killing off the swallows resulted in the devastation of the harvest by insects, and the famine that resulted killed an estimated thirty to fifty million people.

CPs are always loath to admit their mistakes – after all, if the “experts” are not infallible, then why should the people listen to them instead of their own judgement? Admitting errors undermines the authority and purpose of the whole Central Planning exercise.

4. Freedom and Central Planning are mutually exclusive.

This seems self-evident. If people are making decisions and imposing them on you “for the good of the whole,” then you are not free to make them yourself.

5. Power corrupts.

Even if we got a CP who had the integrity, disinterestedness, and morality of Mother Theresa, more intelligence than any living being, and hands on access to all information known to man, this principle would still apply. Call it the will-to-power, or in religious terms, the evil impulse. No person or group of persons can be trusted with this amount of power.

6. They don’t have the authority

Seriously though – who died and left them boss? Neither the Creator nor natural law, if you prefer, has given them the authority to decide what is best for humanity. The people have not, (and cannot) bestow that authority upon them. Our Constitution specifically precludes them from making these types of claims. No one decided that they were boss except themselves. It is a reversion back to the “divine right of kings.” It was false then, and it is false now.

Freedom is messy, boisterous, fluctuating and discordant – but it still works better than any other system.

So the question is: Central Planning – yay or nay?