| There are those who believe they can make the right decision more right... or the poet more poetic. And although many of these snake-oil salesmen content themselves with a quick buck and the next train out of town, some of them go for the long con. These are the central planners.
The illusions, mistakes and misconceptions of central planners take their toll in a great variety of ways - mostly as costly nuisances. Occasionally, when they are particularly ambitious, they make the history books.
Napoleon's march on Moscow. Mao's great famine. The Soviet Union's 70-year economic experiment. These fiascos are caused by well-meaning, smart public officials. They are the hell to which the road paved with good intentions leads.
The Fatal Conceit
Sometimes, a mistaken public policy can be reversed or abandoned before it has done serious harm. Mostly, however, a combination of special circumstances makes correction impossible. The disastrous policies are reinforced until they finally reckon themselves out in a catastrophic way.
Large-scale planners fail because they believe three things that aren't true.
First, that they know the exact and entire present state of the community they are planning for (wants, desires, hopes, capabilities, resources); second, that they know where the community ought to go (what future would be best); and third, that they are capable of creating the future they want.
None of those things is more than an illusion. Together, they constitute what F.A. Hayek called "the fatal conceit... that man is able to shape the world around him according to his wishes."
Each man always does his level best to shape his world in a way that pleases him. One wants a fat wife. One wants a fortune. One wants to spend his time playing golf. Each will try to get what he wants depending upon the circumstances. And the future will happen. The pretension of the central planner is he knows a better future - one that he can design and bring about.
The godlike vanity of this assertion is staggering. No one knows what future is best for humankind. People only know what they want.
The Future Has to Wait
We presume the best future is the one in which people get what they want... or at the very least what they deserve.
A man burning in hell may want ice cream; it doesn't mean he will get it. But the central planner presumes to know not only what he wants, but also what he should have. (It is scarcely worth mentioning that the central planner's hands are as empty as his head. He has no ice cream to give anyone.)
Where individual plans and evolution will take us collectively, no one knows. Fate will have the final say. But the central planner will have his say first, disrupting the plans of millions of people in the process. He certainly has no amor fati. It would put him out of business.
Instead, he steps in to impose his version of the future. And as soon as the smallest bit of time and resources are shanghaied for his ends rather than those of individual planners, the rate of natural, evolutionary progress slows.
The millions of private trials that would have otherwise taken place are postponed or canceled. The errors that might have been revealed and corrected are not discovered. The future has to wait.
Even when they are applied with ruthless thoroughness, central plans inevitably and eventually become FUBAR. No "workers' paradise" ever happens. The war on drugs (or poverty... or crime... or terror... or cancer) ends in a defeat, not a victory. Unemployment does not go down. The "war to end war" doesn't end war. The domino theory falls; the dominoes don't.
And if any one of these grand programs "succeeds," it does so by undoing previous plans often at a cost that is far out of balance with the reward. World War II is an example of central planning that seemed to work. But the Allies were merely nullifying the efforts of more ambitious central planners in Germany and Japan.
A Not-So-Rational Life
Generally, life on Earth is not so "rational" that it lends itself to simple-minded, heavy-handed intervention by the naïve social engineer.
Sure, we can design bridges. Houses too. And particle accelerators. But we cannot design economies. No more than we can invent real languages. Societies. Customs. Markets. Love. Marriages. Children. Or any of the other important things in life.
Not to overstate the case, however, it is also true that humans can design and achieve a certain kind of future. If the planners at the Pentagon, for example, decided that a nuclear war would be a good thing, they could bring it about. The effects would be huge. And hugely effective.
This extreme example reveals the only kind of alternative future that the planners are capable of delivering. Large-scale central planning can be effective, but only by pulverizing the delicate fabric of evolved civilized life.
It is a future that practically no one wants, because it means destroying the many different futures already in the works - marriages, businesses, babies, baptisms, hunting trips, shopping, investments and all the other activities of normal life.
Not all central planning produces calamities on that scale, of course. But all, to the extent that they are effective, are repulsive. The more they achieve the planners' goals, the more they interfere with private goals, and the more they retard or destroy the progress of the human race.
Cheers,
Bill Bonner
for Free Market Café
A Note From Eric: Today's column comes to us courtesy of Diary of a Rogue Economist. You can check it out here. |
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