02 May 2011

Planners: the Few, the Many

Keynes on planning, coda — Marginal Revolution: Russ Roberts responds, and from the comments, Lawrence H. White reports:
In his famous letter to Hayek regarding The Road to Serfdom, after asserting that greater central planning would enhance efficiency, Keynes wrote:

“I should therefore conclude your theme rather differently. I should say that what we want is not no planning, or even less planning, indeed I should say that we almost certainly want more. But the planning should take place in a community in which as many people as possible, both leaders and followers wholly share your own moral position. Moderate planning will be safe if those carrying it out are rightly orientated in their own minds and hearts to the moral issue.”
[Emphasis mine.]

This is the heart of my opposition to centralized planning: the planners are not "rightly oriented.  I have no experiential reason to believe planners are so oriented, and indeed I have theoretical framework to suggest we should not expect them to be.  Assuming they are is a flaw right from the foundation.

But even if you call that cynicism (and it certainly is, though in the original sense of doubting others' stated motivations) I have a fall back position. Suppose the planners are generally "rightly oriented." What happens when they are not? What is the failure analysis?  Where is the fall-back position? How is the planners' failure in orthodoxy recognized, diagnosed, and corrected? What is the mechanism for correcting breaches of orthodoxy in those correcting breaches by the planners? And so on...

Relying on morality and altruism from the powerful and privileged, even assuming that it is possible to get such behavior, is an extremely static and brittle position to put yourself in.

~ ~ ~

Side note:  If you want "as many people as possible" involved in the generation of plans, as Keynes claims to, what better way than markets?  I mean that as a serious, non-rhetorical question.  Show me a way to harness the decision making power of so many people and I will certainly take notice.

And not just for philosophical  reasons, either.  A continuing thread in my computer science research is harnessing the power of many, limited, fallible elements to make better overall decisions.

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