Please stop trying to plan our lives.
This appeal goes out to everyone who believes he or she — or a group of experts — can plan our economy, our society, our futures.
It can’t be done.
Human motives and actions are way too complex to organize and plan on a mass scale. Economic growth happens naturally when people are free to make their own decisions, their own mistakes, their own profits.
Central planning of an economy can be overt, such as existed in the former Soviet Union or other totalitarian states.
Or it can be more subtle, such as when U.S. government authorities believe they can use monetary policy or government spending to “stimulate” the economy, restore employment and foster growth.
None of this works in the long run.
There is only one tried and true formula for bringing about lasting economic growth and prosperity: economic freedom in the context of respect for private property.
In other words, you have to allow people to create their own wealth if there is to be any wealth to “spread around.”
Nothing seems to grate at some people more than the idea of economic freedom. After all, people may choose to sell or purchase things that others deem unworthy. Or they may refuse to sell their property for some grand plan designed to promote the “greater good.”
Economic freedom also irritates organizations benefiting from restrictions on competition, such as public schools.
It also irritates domestic industries and labor unions, who argue that foreigners are ruining our economy with cheap goods or cheap labor.
All this must be stopped, again, for the “greater good.”
But you can’t successfully plan or manage an economy. There are too many variables, too much information a planner cannot possibly know.
I recently went shopping for a new desk lamp. It’s amazing how many there are on the market and how many different kinds. How do manufacturers know what sort to make or how many to make? The same resources used to make lamps, after all, could be used to make an almost infinite number of other things. How do they know to make lamps, or clocks, or electric fans, or space heaters or whatever?
Entrepreneurs “know” what to make and how many to make thanks to market signals, such as prices, profits and losses. Those things are really just information, and any government intervention in the market necessarily blocks the free flow of such information and wastes valuable resources.
I recently read a memoir by Nazi Germany’s main building designer, Albert Speer. He was commissioned by Adolf Hitler to design a new Berlin, complete with government buildings, giant monuments, private shops and theaters in selected locations.
After spending 20 years in prison for his part in using slave labor in the Nazi war effort, Speer wrote:
“Whenever, nowadays, I look through the plans and the photos of the models [for Berlin], even these varied parts of the avenue strike me as lifeless and regimented. … The entire conception was stamped by a monumental rigidity that would have counteracted all our efforts to introduce urban life into this avenue.”
The Nazi plan for Berlin seemed lifeless, I believe, because it was a “plan” and not the spontaneous growth witnessed in a truly free economy and society.
Speer’s father, also an architect, summed up the situation nicely when his son showed him the plans for Berlin. Looking at the vast models and drawings for a new German capital, Speer’s father stated simply:
“You’ve all gone completely crazy.”
Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@
tribstar.com.
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