The Fatigue of Central Planning
posted by Beth @ 6:00 AM
I've been reading lately that President Obama is over-worked and tired because of trying to deal with the financial crisis. This fatigue has even been offered as an excuse for his shabby reception of British Prime Minister Gordon Brown. (From the article: "Sources close to the White House say Mr Obama and his staff have been "overwhelmed" by the economic meltdown and have voiced concerns that the new president is not getting enough rest.")
Maybe that's because he is literally trying to do the work of millions.
A market economy is the result of an uncountable number of individual decisions and actions, coordinated through price signals which provide crucial information on the availability of every imaginable resource. Profit and loss calculations provide essential feedback on the relative efficiency with which a multitude of producers use those recourse to meet the needs and desires of an even larger number individual consumers.
Central planning consistently fails because it is impossible for a small number of individuals, let alone one man, to obtain the requisite information, create the necessary plans and subsequently attempt to implement them.
Mr. Obama, meet the Fatal Conceit.
Maybe that's because he is literally trying to do the work of millions.
A market economy is the result of an uncountable number of individual decisions and actions, coordinated through price signals which provide crucial information on the availability of every imaginable resource. Profit and loss calculations provide essential feedback on the relative efficiency with which a multitude of producers use those recourse to meet the needs and desires of an even larger number individual consumers.
Central planning consistently fails because it is impossible for a small number of individuals, let alone one man, to obtain the requisite information, create the necessary plans and subsequently attempt to implement them.
Mr. Obama, meet the Fatal Conceit.
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In 1952, Ludwig von Mises appended his essay "Monetary Reconstruction" to his book, The Theory of Money and Credit.
This three-chapter essay examines one particular instance of central planning and its consequences: the abolition of the gold standard; the substitution of a centrally planned system of money; and the US government's consequent struggle to deal with the results of central planning. Written 60 years ago, the essay applies to our current economic mess. The essay offers a brief history of the gold standard and its demise; a description of what would be needed to restore a gold standard; and a warning about the pitfalls of partial or unprincipled restoration.
The essay thus offers elements of interest to students of history, students of economics, and intellectual activists who want to see an example of an actual strategy for restoring the gold standard.
This summer, Study Groups for Objectivists will examine the three chapters in a three-week study group. The purpose of the brief study group is familiarization.
http://www.studygroupsforobjectivists.com
This three-chapter essay examines one particular instance of central planning and its consequences: the abolition of the gold standard; the substitution of a centrally planned system of money; and the US government's consequent struggle to deal with the results of central planning. Written 60 years ago, the essay applies to our current economic mess. The essay offers a brief history of the gold standard and its demise; a description of what would be needed to restore a gold standard; and a warning about the pitfalls of partial or unprincipled restoration.
The essay thus offers elements of interest to students of history, students of economics, and intellectual activists who want to see an example of an actual strategy for restoring the gold standard.
This summer, Study Groups for Objectivists will examine the three chapters in a three-week study group. The purpose of the brief study group is familiarization.
http://www.studygroupsforobjectivists.com
Interesting, Burgess. I hope either you or someone from your group will post about the essay sometime.
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