What’s wrong with having a plan? We all plan. We plan our day – what we’ll wear, how we get to work, when and what we’ll have for lunch and dinner. We plan our future. We decide what college or university to possibly attend, what career to try to follow, which job to take that may be available.
We plan going out on a Saturday night; we plan a vacation destination; we plan buying a house or a car, and plan putting the money aside for the down payment for when we are ready to buy them.
We make plans with others. We arrange a time and a place to meet with one or more others. We plan with someone to get married, and we plan the wedding date and where to hold the ceremony and who to invite.
We plan whether to start up or invest in a business, and we plan what to produce and how, based on what we think consumers might be interested in buying.
A robber plans how to rob a bank and make a successful getaway. The murderer plans how to kill someone, and get away with the crime. And the police detective plans out a strategy to catch the suspected guilty party.
You plan to look at this website and decide whether to read this article if the title or subject matter seems interesting.
Personal Planning is Part of Human Life
Planning is inseparable from being a conscious, thinking human being. So if we all do it, what’s wrong with people proposing and governments implementing political plans attempting to impact upon, influence or direct outcomes in society?
A fundamental difference between the plans each of us make as individuals and those made by government is that of voluntary choice versus political compulsion. As private individuals we each freely decide on our own plans and the courses of action we choose to undertake based on them. Think of the examples given earlier. The individual decides for himself in all such matters – what and when to eat, what to wear, how to spend his time or our money.
In the interactions with others, they, too, depend upon mutual and voluntary agreement as to when to have a meeting or whether to get married, and if so, including when and where. We also all choose and make our personal trade-offs. There might be a job offer that pays, say, 20 percent more than another available employment. But you may pass up the financially better-paying position if the lower paid job is in a location you’d rather live in, or is closer to family and friends you’d rather not be too far away from, or involves more interesting and challenging work.
Also, in many, though not all instances, we can frequently change our minds about our plans and decide to do something different. The fact that yesterday I had ham and eggs for breakfast does not bind me to not having hot or cold cereal today. I can decide to sell my car and get around on a bicycle, instead, if I want to exercise more and psychologically satisfy an urge to be doing something to “save the planet” with a smaller carbon footprint.
The Marketplace is Where Individual Plans Come Together
If our plans are to mesh with that of others so their actions can be more in coordinated balance with our own, so our own goals will be more likely to be achieved based on what they decide to plan and do, we must reach mutually agreeable terms. In the marketplace this involves in various direct and indirect ways in our producing goods and services others want to reciprocally receive in exchange from us so we can get from them those things that they have or can do for us that will improve our own circumstances, as we desire it.
In the private arena of personal and economic and social interactive freedom, we or they can decide that the terms offered does not satisfy or justify better adjusting their own plans to fit our own. In other words, as a buyer I can turn down the offer of a pair of shoes because I don’t like the style, fit or price asked. And the gardener offering to mow my lawn and trim the bushes around my house can refuse the job if the price I’m willing to pay does not equal or exceed what he could earn by applying his skills tending someone else’s property.
This incentivizes each individual in the arena of market exchange to design part of his plans to devise ways to apply his knowledge, abilities and resources (which includes his own labor) in a manner that focuses on the planned ends and purposes of others, precisely to be able to offer to them goods and services they would be willing to accept in trade for what the first individual wishes to acquire in exchange for the attainment of his own goals.
Individual Planning Incorporates Each Person’s Special Knowledge
This brings out another distinct and important element to the private plans of each individual, one that the Austrian economist, Friedrich A. Hayek, in particular, emphasized. That being that each individual, in designing and carrying out his own plans can take advantage of and utilize the knowledge of his own circumstances in the social setting in which he lives and works.
Each of us experiences things, knows things, have learned things that many others have not, and about which they likely have no knowledge or appreciation. A social setting in which each individual is at liberty to use his own knowledge of the unique and changing circumstances of his own surroundings means that he cannot only better serve his own immediate and direct ends and goals; he can also utilize that knowledge in directions that also place it at the disposal of others in the form of the goods and services made available to the others through the competitive processes of market exchange.
Thus, all benefit and are potentially made better off precisely due to a social system that both allows and encourages each to freely use his knowledge as he sees fit in making and implementing plans for improving his own circumstances by furthering the improvement of others.
Finally, the social order in which each advances his own ends by implementing plans that also interactively enhances the circumstances of all, is an over arching human institutional system that itself has no planned purpose or goal – other than facilitating and fostering an environment in which the individual plans of multitudes generate outcomes greater than any of the individual plans by themselves.
Think of the “rules of the road.” Each driver is expected to abide by the speeding limit, stop at intersections when the traffic light is red and to proceed when it is green; to pull over when an ambulance or fire truck has its lights and sirens blasting, and wait until it has passed before going on.
But these rules of the road are not meant to bring about any particular outcome or end-result into existence. Instead, they are procedural, in that they are concerned with facilitating the process by which and through which each individual can more smoothly and effectively go about their own individual traveling plans to reach certain destinations to complete specific tasks and purposes that the respective individuals have in mind that has brought them on to the road and behind the steering wheel of their cars.
Political Plans Coercively Co-opt the Multitudes of Individual Plans
Now contrast all this with political plans, that is, those designed and implemented by government, as frequently done today. The nature of a government plan concerning, say, national health care, or imposed minimum wage laws, or taxing and spending activities to “guide” or “direct” the society on to a certain economy-wide growth path is precisely that they partly or totally preempt the multitudes of individual plans by the citizens of that country.
The plans of one or some who have use of or influence over government power are imposed on all the members of that society. The essential element in government planning is the threat or use of force to make all the others in society conform to political planner’s purposes and intentions.
The government can compel people to pay for and accept the services of a national health care system they do not want. The government can force people under the threat of fine and/or imprisonment to engage in employment relationships at wages or work conditions that one or both parties to the transaction would have turned down or negotiated to accept under different terms if the individual actors had been left free to haggle over the conditions of employment more agreeable to both. And some potentially mutually bettering employment transactions may never be entered into.
Government planning and its imposed policies supersede and abrogate the private, peaceful and voluntary planning of everyone and replaces those multitude of interactive plans with one plan dictated and coercively put in place.
The Issue Is Whose Plan – Yours or the Government’s?
The proponents of such government planning have often tried to argue that either government plans or there is no planning, implying chaos or disorder. But as advocates of freedom have frequently responded, the real issue is not a government plan versus no plan; instead, it is, whose plan? The single or handful of plans of those in political power, or the individuals plans of all the members of society brought into balance and coordination with each other through the competitive market process and the prices that have emerged out of the voluntary exchanges of hundreds of millions, now billions of people around the globe?
Also, when government plans are imposed over the actions of all the members of society, what knowledge and information is captured and included in those political plans is dependent on the limited and incomplete knowledge possessed and obtainable by the government planners. Thus, the possibilities and potentials for all in society are confined within the finite capabilities of a small handful of mortal and imperfect human beings.
There are now over seven billion people in the world. Each one has his own knowledge, experience, understanding and insight concerning the circumstances and opportunities around them. Each has his own judgment and value scale concerning what is more or less important, what trade off might be worth making to get or do more of one thing at the price of less of something else. Each sees or discovers chances to interact and associate with others in ways that will make them and the potential trading partners better off.
The government plan co-opts many, if not in some cases all, of these distinct and individual chances and opportunities. The individual is confined with in and made to conform to what the government planner has decided as existing and acceptable opportunities and ways of doing things. Thus, the minds of multitudes of individual private planners are straightjacketed within what the handful of planners’ mind can know, understand, and master
Government Planning Directs Everyone to Political Goals
Finally, government planning replaces the procedural rules of social and market interaction – those social “rules of the road” – so each can more harmoniously pursue their own plans in collaborative and voluntary association with others, with distinct political plans that command each individual to act in ways that attain the outcomes wanted by the political planner.
Thus, political planning is not at all like the private plans of ordinary people in society. Government planning undermines and ultimately destroys the capability of individuals to plan and direct their own lives. Political planning means the end to planning in society, because the members of that society are denied the right and opportunity to fully plan their own lives.
So, in a free society, government, if it is to exist, has no plan that guides its actions in and over society? The Austrian economist, Ludwig von Mises gave an answer to this question in his small book, Planned Chaos (1947). Mises said that in the heyday of classical liberalism and free market capitalism in the nineteenth century, the British government most certainly had a “plan” that guided its policy decisions. He said:
The British government in the liberal age had a definite plan. Its plan was private ownership of the means of production, free initiative and market economy. Great Britain was very prosperous indeed under this plan . . .
The only successful government plans consistent with the liberty of individual planning and voluntary association in market and other social settings is the enforcement of those classical liberal principles and “rules of the road” that limit government to the recognition of and respect for each person’s right to his own life, liberty and honestly acquired property as means to pursue human happiness.
Anything beyond this replaces compulsory political Planning, with a capital “P,” with the proper and necessary planning of each free, peaceful and self-directing individual. There is really no compromise between the two.
Latest posts by Richard M. Ebeling (see all)
- Primitivism Versus Prosperity - 2018.12.08
- Pro-Capitalist Ideas Can Reverse Out-of-Control Government Spending and Taxing - 2018.10.27
- The Bad Economics of Short-Run Policies - 2018.10.05