Friday, 1 February 2013

In Chaos there is Wisdom

The great and terrible myth of the left is planning. 

For Big Staters nothing exists that cannot be improved by some planning & coordination. Enough well qualified bureaucrats & a few politicians will do much better, produce more desirable outcomes across a whole range of human activities,investment, construction, energy provision, than the mere chaos of multiple individual decisions. 

The idea is seductive. Reasoned decisions by experts has a sounds-likely attraction, a cleaner, shinier promise than that of  decisions taken by filthy market forces. Plans made without the pressure of profit, money or entrepreneurial zeal must yield better outcomes for everyone....

Seductive but wrong. "Planning" is, of course, a chimera, a monstrous, mythical beast of an idea.

Vast quantities of knowledge, much of it not even recognised as "knowledge", are used and needed to create economy. That knowledge is so extensive it cannot be held, that is known, by any group  but is distributed throughout the individuals throughout society. 

Mary knows how to make scones but more importantly she knows just which size & flavour scones sell best. Joe knows how to drive Martin's coal truck but also gets enough feedback from customers that he knows what price points the coal & other fuels change places in customer preferences. Multiply that by the millions of people involved in the economy and the  billions of much more complex, continuous interactions and you have some idea of the vast,ever-changing sea of knowledge used. 

Entrepreneurs continuously seek opportunity, using their slice of  knowledge of costs, needs and values to create goods and services market will purchase. Without knowledge, or using data which is not true (NO! I'm not getting into the philosophical discussion of precisely what constitutes knowledge) they will get investments, pricing & products wrong. That means they lose money and either cease trading or adjust to reality. Only by serving our needs & wants can they continue in business

Profit is not an evil but both the reward and signal of successful  service. In a free market prices are a set of signals to buy more, provide more, buy less, make more or less. When the planners decide they will buck that market the result is miss-pricing, miss signalling & disaster. 

If those entrepeneurs are distracted from our needs, forced to answer not to our cents, euros and dollars but to the fiat of politicians & bureaucrats then we are made poorer.

"Planners" have only a tiny piece of that embedded knowledge & still less of the knowledge about their supposed area of expertise. Worse they have no "skin in the game" : planners have no danger of loss from their own decisions, no matter how stupid or destructive. Planners are not neutral, not disinterested divine beings but a group of humans as corruptable, stupid & prone to whim as any small group. Because theit decisions don't particularly affect their own lives (the skin in the game) they are free to pursue whatever is the current whim, fashion, ideology or vendetta they like. 

All planning by government entails a restriction or abrogation of private property rights in the name of the collective good: a dubious proposition at best and, in the case of Government planning, a deeply destructive idea. Taken to it's logical extreme, as in Obama's America, legalised planning leads to an effectively fascist state with the free market almost abandoned, business & property retained nominally in private hands but the Government making all the decisions. 

Planning is thus both the Road to Serfdom of which Hayek so presciencently wrote in the 1940s and a route to poverty. Business take better decisions for themselves & us when free to make decisions, Government replaces the free market at enormous cost to our ability to satisfy our needs or create wealth. 

It is now an article of faith as unquestioned as the the need for human sacrifice in ancient Tenochtitlan that central banks must "plan" the economy. In the face of the destructive boom-busts produced by such "planning" and Government interference in market mechanisms by misspricing money the answer has been the same as that of the High Priests of Tenochtitlan: MORE! More bodies, more blood, more planning more poverty, becuase to admit failure or alternative is to threaten the very belief system that sustains the problem.

The bad results of expertise & planning are nowhere more visible or more insane than in the building regulations. The intimate experience of urban living demands an enforced respect for the physical geography of others. Instead of correctly being a mediation of clearly defined private property rights, planning regulation is now that monstrous, wealth consuming chimera, unaccountable, unexamined, opague & corrupt. The most potent effect of this charade is a vicious tax on the working poor: unable to afford accomodation inside cities they must waste vast portions of their working lives in transit to cheaper destinations. This monstrous time tax is imposed for our own good: truely C. S. Lewis was right when he said the dictatorship of the benevolent was the worst of all.

In Ireland the planning permission system allows a small group at it's apex- the secretive & unexamined Bord Planála- to enforce an entirely insane anti-car policy. In a country that lacks even in it's major city, the population density for a proper mass transit system & has almost nowhere the population density required for profitable public transport, grounds for refusal for major investment projects are regularly the the over dependence on the proposed development on cars. it seems no one has asked that august body of kept idiots how we are to get ourselves from any A to B in Ireland without cars.

Planning regulations impose a huge cost with no benefit. An army of well connected leeches now exists in Ireland to interpret, explain & massage the process. Worse are the delays to investment or the refusal to allow investment to happen at all- from a shop & petrol station in meath to a hlf billion investment in Louth canceled on whim.

Famously, on his first visit to London, Mikail Gorbachov expressed puzzlement as to how London was fed sans Central Planning. His ignorance of the beautiful, functional free market was,perhaps, given his background,understandable. There is no excuse for our current politburos.

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