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You can't plan this
On 2020 oil prices, Ike's horse sense, and the hubris required to dream of a "planned" socialist economy
The sentiment that everyone is entitled to have an opinion, but not to make up a unique set of facts, is one to which most sensible people subscribe. But what about those opinions so relentlessly contravened by the facts that they simply cannot survive any kind of real scrutiny?
■ A state senator from New York has taken to a public platform to loudly declare, "Having a plan is better than not having one. Socialism = planned economy[,] Capitalism = unplanned ("free" market)". An opinion, yes. But what of his facts?
■ The only way to reach his conclusion is to willfully reject every relevant lesson of history and adopt a fertile imagination about the omniscience of planners. The originating assumption of the entire claim is that plans themselves are good. But anyone with even the mildest experience in planning recognizes the grain of truth in the words of Dwight Eisenhower: "Plans are worthless, but planning is everything."
■ Thus, "Having a plan" is no panacea, particularly if it is finalized, rigid, and codified. And that is exactly what people mean when they call for a "planned" economy. A market economy is "planned", too, but not in the ledgers of government. A market is "planned" through the actions and choices of all its many participants. Their plans, though, are not fixed: Sensible people learn to adapt and change as circumstances change.
■ As people make their own choices, their plans get converted into actions, which then send signals to other people (via prices) that spill over and affect their plans, too. Planning still takes place, but it takes place on individual and firm-level scales, and it takes place flexibly.
■ There is an unimaginable hubris to the notion that any merry band of omniscient geniuses could effectively plan the course of an economy, when not one of us has sufficient information to predict perfectly the circumstances of our own individual lives a year from now.
■ No planner could have predicted negative oil prices a year in advance of April 2020, and that is merely one among literally billions of unpredictable economic events. The faith some people have in government planners may be an opinion to which they are entitled, but it is a faith so profoundly contradicted by the facts that no one should take its adherents seriously.