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Quotation of the Day…

… is from pages 39-40 of F.A. Hayek’s April 1964 Rikkyo University lecture, “Kinds of Rationalism,” as this lecture is reprinted in the 2014 collection The Market and Other Orders (Bruce Caldwell, ed.) – a collection of some of Hayek’s essays on spontaneous-ordering forces:

All economic activity, in particular, is planning decisions about the use of resources for all the competing ends.  It would, therefore, seem particularly absurd for an economist to oppose ‘planning’ in this most general sense of the word.

But in the 1920’s and 1930’s this good word had come to be used in a narrower and more specific sense.  It had become the accepted slogan for the demand, not that each of us should intelligently plan his economic activities, but that the economic activities of all should be centrally directed according to a single plan laid down by a central authority.  ‘Planning’ thus meant central collectivist planning, and the discussion whether to plan or not to plan referred exclusively to this issue.

DBx: It’s a straightforward but too-often-missed truth: the more Jones intrudes himself into Smith’s life in order to plan Smith’s affairs, the less able is Smith to plan for herself.  Likewise, the more Jones and Williams jointly intrude themselves into Smith’s life in order to plan Smith’s affairs, the less able is Smith to plan for herself.  This reality holds regardless of Jones’s and Williams’s individual intentions or their collective intention (if there is such a thing).  And importantly, if Jones and Williams coalesce together to impose on Smith and themselves a single plan according to which all three persons – Jones, Williams, and Smith – must act, there is less, not more, planning among these three individuals.  One plan displaces three plans.

Some politicians, pundits, preachers, and (especially these days) professors nevertheless think feel this outcome to be the preferred one.  In part they celebrate the displacement of many individually formed plans by a single, unitary plan because they simply do not understand economics: they do not understand how private property and other market institutions – above all, the price system – weave countless individual plans together into a flexible and (hence) robust complex pattern of vast and productive social cooperation that could not possibly be produced consciously by the largest team of the most dedicated and brilliant economic central planners.

And yet I sense that for many who applaud the displacement of decentralized planning at the individual (and household, and firm) level by more-centralized, imposed government planning, there is also a dislike of freedom (and in many cases a fetish for raw power).  It’s a sad fact that even in relatively free societies there is an abundance of people who cannot abide leaving their fellow human beings to go about their lives as each chooses.  If other people aren’t being herded, prodded, ‘nudged,’ and – inevitably – coerced into behaving as the politician, pundit, preacher, or professor fancies, the politician, pundit, preacher, or professor is unhappy.  This unhappiness then leads the politician, pundit, preacher, or professor to conclude – illogically and arrogantly – that the world is not as it should be and that he or she is therefore entitled to put it right by summoning the use of force.