Government planning has drawbacks

A significant swath of people believe that central planning by a government body is necessary for at least some economic activity.

They can point to the rapid, massive buildup of the American war machines for both world wars and their successful prosecution to the seemingly-successful management of consumer price inflation over the last few decades by the central banks, or the ongoing usefulness of mega-projects like the Tennessee Valley Authority, the Hoover Dam, or the Panama Canal. All of those were massive coordination efforts using coercive force of government and taxes to bring about.

Any major effort takes a lot of planning, something that every corporation of significant size can vouch for. Every business has managers or executive officers to make strategic decisions and to husband resources to achieve the goal. That is what all of these endeavors, public and private, have in common. Each is focused toward a particular goal and real people, individuals, are charged with making them successful.

In each case, the efforts of many people are directed at the accomplishment of something real and significant. Every participant or employee forfeits his or her own goals for the period of time over which they are engaged or employed. The employer, in effect, buys the cooperation of the employee and his or her allegiance to the objective. The differences between the different types of projects are who owns them and whether or not participation if voluntary or coerced.

In World Wars I and II, the great masses of people cooperated toward a goal, even though coercion was involved. In those cases, most people saw such a threat to their well-being and future freedom that they were willing to sacrifice a great deal to win the wars, even though their lives were seriously disrupted.

People are willing to put their lives on hold for a short period of time if they feel that the benefits of doing so outweigh the costs. In the case of regular employment, employees work toward the employer’s goals rather than their own for eight or ten hours per day as long as they are paid an adequate wage. When they get done with work, they resume the pursuit of their own goals, using what they gained from employment to aid in their achievement.

For total war against an assumed existential threat, they may be willing to tolerate a few years of sacrifice and great inconvenience, forfeiting their own goals to help defeat the enemy. They will not do so indefinitely, however. There is a limit, and war fatigue sets in sooner or later.

Countries that engage in central economic planning require that their citizens forfeit their own goals and sacrifice their rights and property to the state forever. There is no end in sight. That is the ultimate reason that such economies must eventually fail. The Soviet Union lasted for seventy years, but only because their planned economy was a sieve. The black market accounted for up to sixty-five percent of economic activity, and the authorities knew they couldn’t shut it down.

Whether it is health care, total war, or a whole economy, central planning of economic activity by government necessarily involves coercion and the denial of voluntary commerce. It can work to achieve some specific goals, but the overarching questions are who gets to set the goals, how successful were they in reality, and what alternative uses of resources, human and otherwise, might have had better results.

In every instance, political goals require that individuals forfeit their own goals. That can happen for a while, but eventually people rebel when their rights are constantly violated and when they realize that central planners don’t have their best interests at heart.

Dan McLaughlin, a Randolph resident, is the author of “Compassion and Truth-Why Good Intentions Don’t Equal Good Results.” Follow him at