The point of central planning

Essentially central planning is not about the efficient allocation of economic resources, it is about control.

Central planning maximizes the extent of control that the state, and the people running the state, exercise. The desire to control others is a constant in history and is part and parcel of the construction of states. If the state can grab all the land and resources and control who and on what terms people get access to them, then this maximizes control, even if it sacrifices economic efficiency.

Quite.

Which is what gives us Kip\’s Law.

Kip’s Law: Every advocate of central planning always — always — envisions himself as the central planner.

For it is indeed about control *by me* of all those resources and people.

13 thoughts on “The point of central planning”

  1. Kip’s Law is false. I advocate a degree of central planning and I do not envision myself as the central planner.

    There’s no inherent virtue in unplanned development, either in theory or in practice – try visiting Los Angeles. On the other hand, there’s no certainty that planners will do better; it would be more useful to explore the circumstances in which planning does and doesn’t work well than to make up trivially untrue laws about it.

  2. Doesn’t the planning debate become a bit sterile if we don’t define terms? I hope we all believe that some things have to be planned, so how the necessary planning differ from ‘planning’?

    Even settling what we mean by ‘planning’ leaves us with questions. As one great exponent of central planning queried, ‘Who, whom?’ but here we have an added dimension: PaulB defends central planning because cities need planning. But this raises the meaning of ‘central’ in the phrase ‘central planning’. Cities aren’t normally planned by the central government, but by a local government. It’s planning, but is it central? And would it be planning (and would it be central) if LA was a leasehold city, managed by a private corporation? Or a residents’ association?

    So we need to work out what we mean by ‘central’ ‘planning’. And then we’re still left with Lenin’s question, perhaps better framed as ‘Who, what, how?’

  3. Come to think of it, would the Town Planners of postwar Britain be a good example to represent all central planners everywhere?

  4. Thanks for the link, Tim. Perhaps you should read them yourself.
    Central planning clearly “worked” for Bronze Age Greeks and for the Inca. (A bummer for the peasants, I’ll admit.) If your guage of success is durability de-centralised capitalism has a few hundred years to go before we can be assess it.

  5. Philip is right. Any argument over planning needs to define its terms.

    Businesses plan all the time. Sometimes it even works.

    What is wrong, now (as always), is that the wish-fulfillment idea that planning is a substitute for pricing. Planning cannot replace prices as a method of allocating resources. The fairy tale nature of this belief system permeates the left.

    There are indeed alternatives to capitalism – purely as a means to financing enterprise or trade which can/could/might work – but not to pricing or markets.

  6. Surely the point about control refers to all planning – central or otherwise, and including that by corporations.

    And there is nothing inherently wrong with central planning in a democracy – it depends on the extent to which the relevant information can be processed and the way in which individual choices are translated into policy. Blanket rejection is as idiotic as blanket advocacy.

  7. No the point does not apply equally to all planning. Planning how to deploy one’s own resources is qualitatively different with planning how to deploy other people’s resources.

  8. Bif
    ‘Central planning clearly “worked” for Bronze Age Greeks and for the Inca’
    All the BA Greeks ended up as a (from memory) 60 cm burn layer. And the Incas were done in by 168 blokes.
    Other than that, the point is accurate.

  9. *cough*

    Point Of Order, Mr Chairman.

    Has Dearime ended the debate (and lost- curses!) by the application of Godwin’s Law to comment #3?

  10. Kip’s Law sounds a bit of an innacurate instrument. It would be more accurate to say that advocates of central planning rarely envisage themselves as a victims of central planning.

    The planning illusion goes hand-in-hand with the innovation illusion so beloved of catastrophists everywhere (see Malthus, Club of Rome, CAGW advocates). Both illusions envisage accurate prediction of future. Both are based on a psychological flaw in human thinking:

    History shows this is not possible. Innovation prediction is rubbish. Yet innovation creates and destroys entire industries and market sectors.

    The point of innovation is that you don’t see it coming.

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