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The Economy Needs More Planning--Central Planning, That Is
by Lawrence W. Reed
Thanksgiving is just one day each year. But because we
have so much to be thankful for, maybe it ought to be every
G. K. Chesterton once said, "I would maintain that thanks are
the highest form of thought; and that gratitude is happiness
doubled by wonder."
Think about that, especially Chesterton's use of the word
"wonder." It means "awe" or "amazement." The least thankful people
tend to be those who are rarely awed or amazed, in spite of the
extraordinary beauty, gifts and achievements that envelope us.
A shortage of "wonder" is a source of considerable error and
unhappiness in the world. What should astound us all, some take for
granted or even expect as entitlements. Of those who believe more
government is the answer to almost everything, some days I think
they don't even notice the endless wonders that result from things
other than the political power they
We're moved by great music, sometimes to tears. We enjoy an
endless stream of labor-saving, life-enriching inventions. We're
surrounded by abundance in markets for everything from food to
shoes to books. We travel in hours to distances that required a
month of discomfort of our recent ancestors.
In America, life expectancy at age 60 is up by about eight years
since 1900, while life expectancy at birth has increased by an
incredible 30 years. The top three causes of death in 1900 were
pneumonia, tuberculosis and diarrhea. Today, we live healthier
lives and long enough to die mainly from illnesses (like heart
disease and cancer) that are degenerative, aging-related
Technology, communications and transportation progressed so much
in the last century that hardly a library in the world could
document the stunning accomplishments. I marvel that I can call a
friend in China from my car or find the nearest coffee shop with an
"app" on my iPhone. I'm amazed every time I take a coast-to-coast
flight, while the unhappy guy next to me complains that the flight
attendant doesn't have any ketchup for his omelet.
None of these things that should inspire wonderment were
inevitable, automatic or guaranteed. Almost all of them come our
way by incentive, self-interest and the profit motive-from people
who gift their creativity to us not because they are ordered to,
but because of the reward and sense of accomplishment they derive
when they do. Some see this and are astonished and grateful, happy
and inspired. Others see it and are envious and unappreciative,
angry and demanding. Still others hardly notice, and busy
themselves trying to micromanage the world according to their own
My senses are always heightened when I'm outdoors, at least in
terms of noticing nature. Trees, animals, the stars-all that
"stuff" fascinates me. I want to know what this plant is called,
where that bird is headed and why, and what the name of that star
is. While walking my dogs recently, one natural wonder after
another accosted me-fragrant honeysuckle in full bloom on a
gorgeous Georgia morning, followed by a stunning spray of roses in
a neighbor's yard, and upon returning to my home, the intricate,
colorful clematis and braided hibiscus I planted just weeks ago. I
am in constant, obsessive awe of a world so far beyond my
comprehension-and so remote from any mortal's
ability to duplicate or centrally plan.
As an economist, I'm inevitably drawn to the economic
implications of these observations. No economist ever said it as
well as F. A. Hayek: "The curious task of economics is to
demonstrate to men how little they really know about what they
imagine they can design." In his memorable Nobel Prize acceptance
speech delivered 40 years ago this fall, Hayek illustrated the
point brilliantly: "If man is not to do more harm than good in his
efforts to improve the social order, he will have to learn that…he
cannot acquire the full knowledge which would make mastery of the
events possible. He will therefore have to use what knowledge he
can achieve, not to shape the results as the craftsman shapes his
handiwork, but rather to cultivate a growth by providing the
appropriate environment, in the manner in which the gardener does
this for his plants."
The central planner would undoubtedly note that like a perfectly
shaped bonsai tree or rose bush, some humans need a good pruning
(and that very same central planner would probably be the first in
line to do it, enjoying every minute of it). You can take a bonsai
tree or a rose bush, cut it back or tie it up with good results.
But try something comparable to your fellow citizens and you just
might find they'll never leaf or bloom again.
Admittedly, the human/natural world analogy is fraught with
limitations. I intend it only to provoke the reader to think, and
take it as far as it holds. In the process, it will be useful to
remember that humans by their very nature are not robots. We're not
so easily planned for as a programmer programs a machine. When
we're children, parents are our central planners but the point of
adulthood is that at some point, parents should leave us alone. We
tend to go further when the environment allows each of us the
freedom to plan for ourselves. Amazing things happen when we
Leonard E. Read, FEE's founder, wrote a classic essay ("I,
Pencil") in 1958 that explains an exquisite fact: No one person in
the world knows how to make a simple pencil, yet pencils and far
more complicated things are produced by the boatload every day.
(You can read it here: http://tinyurl.com/3pgfdys).
That should be a humbling thought if you think you can somehow plan
an economy for millions of people.
The more one allows the world's wonders to witness to him, the
less he'll want to play God with other people's lives or the
economy that their trillions of individual decisions create.
One more point about "planning." The question is never whether
there will be planning but rather, as wise observers of
human society have pointed out, whether the plans of some
individuals with little power are displaced by those who have more
power. "The more the State 'plans," wrote Hayek, "the
more difficult planning becomes for the individual."
The Progressive intellectuals and their followers are in awe of
what they think they might accomplish through the use of government
power. They might benefit if they stopped to smell the roses.
Like the rest of the natural world, what real life in a free
environment actually accomplishes is much more
Lawrence W. Reed
President, Foundation for Economic