Knowledge and Decisions by Thomas Sowell

Author:Thomas Sowell [Sowell, Thomas]
Language: eng
Format: epub, pdf
Tags: Epistemology, Decision-Making & Problem Solving, Philosophy, Social Science, Jurisprudence, Economics, Law, General, Sociology, Political Science, Politics, Education, Business & Economics
ISBN: 9780465037384
Google: QMaFblSgJLsC
Amazon: 1470808811
Publisher: Basic Books
Published: 1980-12-14T23:00:00+00:00

ECONOMIC "PLANNING"

Economic "planning" is one of many politically misleading expressions. Every economic activity under every conceivable form of society has been planned. What differs are the decision making units that do the planningwhich range from children saving their allowances to buy toys to multinational corporations exploring for oil to the central planning commission of a communist state. What is politically defined as economic "planning" is the forcible superseding of other people's plans by government officials. The merits and demerits of this mode of economic decision making can be discussed in general or in particular, but the issue is not between literal planning on the one hand versus letting things happen randomly, on the other. This obvious point needs to be emphasized and insisted upon, not only because of the general tendentiousness of the word "planning," but also because of specific laments about how "accident," "chance," or "uncoordinated" institutions" lead to "helplessness" as the economy "drifts.""

We have already examined particular examples of the government's superseding of other people's plans, as in various forms of price control, control of particular markets, or direct or indirect transfers of resources. What remains to be examined is comprehensive economic "planning"-the subordination of nongovernmental economic decisions in general to a design imposed on the whole economy. This can take place while retaining private ownership of physical or financial assets (capitalism), as happened under fascist regimes, or government ownership of the means of production (socialism) may accompany comprehensive "planning," or such government ownership may coexist with market pricing mechanisms instead of "planning," as in so-called "market socialism" (Yugoslavia being an example). There are also welfare states (such as in Sweden) which may call themselves "socialist" but which operate largely through tax transfers of income earned in a private economy, rather than through comprehensive government control of production decisions. The focus of the analysis here will be comprehensive economic "planning" in general, rather than its particular political or ideological accompaniments. That is, the analysis will be in terms of institutional characteristics rather than hoped-for results.

Comprehensive economic "planning" faces many of the same problems already noted in particular kinds of governmental direction of economic activities-essentially, problems of knowledge, articulation, and motivation.

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