Wednesday, March 11, 2009

The Fatigue of Central Planning

I've been reading lately that President Obama is over-worked and tired because of trying to deal with the financial crisis. This fatigue has even been offered as an excuse for his shabby reception of British Prime Minister Gordon Brown. (From the article: "Sources close to the White House say Mr Obama and his staff have been "overwhelmed" by the economic meltdown and have voiced concerns that the new president is not getting enough rest.")

Maybe that's because he is literally trying to do the work of millions.

A market economy is the result of an uncountable number of individual decisions and actions, coordinated through price signals which provide crucial information on the availability of every imaginable resource. Profit and loss calculations provide essential feedback on the relative efficiency with which a multitude of producers use those recourse to meet the needs and desires of an even larger number individual consumers.

Central planning consistently fails because it is impossible for a small number of individuals, let alone one man, to obtain the requisite information, create the necessary plans and subsequently attempt to implement them.

Mr. Obama, meet the Fatal Conceit.

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4 comments:

Doug Reich said...

Beth,

That's a great connection. I imagine all Philosopher Kings are tired since they must constantly be conveying the world of perfect forms to us idiots.

Burgess Laughlin said...

One of the reasons fiction writing is so difficult is that the author is creating a whole world, at least implicitly. The hubris of central planning is the attempt to make or remake a world through force.

Fiction writing is creative. Central planning is destructive.

Burgess Laughlin said...

Some of your readers might like to know about an upcoming study group examining the Ludwig von Mises essay, "Monetary Reconstruction," appended (in 1952) to his book The Theory of Money and Credit.

The essay, which applies indirectly to our current economic mess, looks at: what would be needed to restore a gold standard; a brief history of the gold standard and its demise; and the pitfalls of partial or unprincipled restoration.

Study Groups for Objectivists will examine the three chapters in three weeks. The purpose is familiarization.

The essay offers elements of interest to students of history, students of economics, and intellectual activists who want to see an example of an actual strategy for restoring the gold standard.

Michael Labeit said...

Very Hayekian