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Quotation of the Day…

… is from page 3 of Lionel Robbins’s excellent and still-relevant 1937 book, Economic Planning and International Order:

“Planning” is the grand panacea of our age. But unfortunately its meaning is highly ambiguous. In popular discussion it stands for almost any policy which it is wished to present as desirable. Indeed there can be no doubt that it is this very ambiguity which lends it attractive force. Men do not cherish vague emotions about precise concepts. When the average citizen, be he Nazi or Communist or Summer School Liberal, warms to the statement that “What the world needs is planning”, what he really feels is that the world needs that which is satisfactory. It is in fact almost certain that the more of a plan he is actually confronted with, the less general will be his emotion, the less likely his agreement with the other members of the crowd.

DBx: A common move by proponents of government planning of the economy – whether it be extensive planning of the sort desired by socialists or the more isolated planning championed by enthusiasts for industrial policy – is to present their schemes as if the promised benefits will either be costless or come at costs so low that no reasonable person would reckon these costs as significant. Of course, if government planning of all or parts of the economy is destined to produce benefits without any attendant costs – or if the assumption is indisputably correct that the benefits of such planning are greater than their costs – there can be no legitimate disagreement about the merits of such planning. Plan (or industrial-policy) away!

Yet in reality, as Robbins points out, often what one person regards as a worthwhile benefit another person regards as not worthwhile. In fact, often it’s the case that an outcome that Jones regards to be a benefit is regarded by Smith to be a cost. Advocates of deploying the government to override market-determined patterns of resource allocation content themselves with assuming – without any basis – that the outcomes that they wish to engineer not only can be engineered by government as advertised, but also are outcomes about which there is widespread agreement among the countless individuals whose lives and livelihoods are thereby affected.

The hubris of socialists and of industrial-policy advocates is intense.

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