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The Central Planning Myth

Summary:
Friedrich Hayek pointed out that a central planner, even a smart benevolent one, can’t possibly know what he would need to know to plan an economy. The needed information exists in the minds of hundreds of millions of people. Hayek’s was a sophisticated argument. But all over the place we can see examples of government messing up because one government entity doesn’t know, or maybe doesn’t care, what another government entity is doing. Here are three examples, from the relatively trivial to the more serious. Canadian Election Speeches On Monday, October 21, C-SPAN patched in the feed of the Canadian Broadcasting Corporation (CBC). I watched a few hours of election results and then got tired and went to bed. I turned on the TV in the bedroom because I wanted to see

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The Central Planning Myth

Friedrich Hayek pointed out that a central planner, even a smart benevolent one, can’t possibly know what he would need to know to plan an economy. The needed information exists in the minds of hundreds of millions of people.

Hayek’s was a sophisticated argument. But all over the place we can see examples of government messing up because one government entity doesn’t know, or maybe doesn’t care, what another government entity is doing.

Here are three examples, from the relatively trivial to the more serious.

Canadian Election Speeches

On Monday, October 21, C-SPAN patched in the feed of the Canadian Broadcasting Corporation (CBC). I watched a few hours of election results and then got tired and went to bed. I turned on the TV in the bedroom because I wanted to see what the two major players, Justin Trudeau and Andrew Scheer, would say in their speeches to supporters. I gave up after a third player, Jagmeet Singh, head of the socialist-leaning New Democratic Party, gave a speech that went on and on. What did he think this was: the Academy Awards?

My fellow Canadian Matt Bufton, executive director of the Ottawa-based Institute for Liberal Studies, told me later that he watched it also. He pointed out that they all spoke at the same time. He commented, “Three men who can’t manage not to speak at the same time have strong opinions on how the lives of 37 million people should be structured.” Well said.

Firefighting in California

Here is Eric Boehm of Reason’s Hit and Run blog writing about California fires last November:

About 200 inmates are among the thousands of firefighters still doing battle with the massive wildfire that has destroyed the town of Paradise, California, and killed at least 31 people.

Once they are released from prison, however, most of them will be prohibited from joining the fire crews that they currently work alongside. It’s a cruel irony that demonstrates just how difficult life can be for the formerly incarcerated—even those with needed, practical skills—who continue to be punished long after they have paid their debt to society, and bad policy that effectively prevents the state from calling upon well-trained, experienced firefighters when wildfires erupt.

So it’s alright to pay them almost bupkis to fight a fire while they’re prisoners but heaven help us if someone contemplates hiring them as firefighters once they’ve served their sentences.

Many people think of government as a fine tuned central planner. It’s not. It’s different people with different plans that are often contradictory.

U.S. vs. U.S.

Syrian militias armed by different parts of the U.S. war machine have begun to fight each other on the plains between the besieged city of Aleppo and the Turkish border, highlighting how little control U.S. intelligence officers and military planners have over the groups they have financed and trained in the bitter five-year-old civil war.

The fighting has intensified over the last two months, as CIA-armed units and Pentagon-armed ones have repeatedly shot at each other while maneuvering through contested territory on the northern outskirts of Aleppo, U.S. officials and rebel leaders have confirmed.

In mid-February, a CIA-armed militia called Fursan al Haq, or Knights of Righteousness, was run out of the town of Marea, about 20 miles north of Aleppo, by Pentagon-backed Syrian Democratic Forces moving in from Kurdish-controlled areas to the east.

This is from Nabih Bulos, W.J. Hennigan, and Brian Bennett, “In Syria, militias armed by the Pentagon fight those armed by the CIA,” Los Angeles Times, March 27, 2016.

And more recently:

Footage showing members of Turkey’s mercenary “national army” executing Kurdish captives as they led the Turkish invasion of northern Syria touched off a national outrage, provoking US government officials, pundits and major politicians to rage against their brutality.

In the Washington Post, a US official condemned the militias as a “crazy and unreliable.” Another official called them “thugs and bandits and pirates that should be wiped off the face of the earth.” Meanwhile, former Secretary of State Hillary Clinton described the scene as a “sickening horror,” blaming President Donald Trump exclusively for the atrocities.

But the fighters involved in the atrocities in northern Syria were not just random tribesmen assembled into an ad hoc army. In fact, many were former members of the Free Syrian Army, the force once armed by the CIA and Pentagon and branded as “moderate rebels.” This disturbing context was conveniently omitted from the breathless denunciations of US officials and Western pundits.

According to a research paper published this October by the pro-government Turkish think tank SETA, “Out of the 28 factions [in the Turkish mercenary force], 21 were previously supported by the United States, three of them via the Pentagon’s program to combat DAESH. Eighteen of these factions were supplied by the CIA via the MOM Operations Room in Turkey, a joint intelligence operation room of the ‘Friends of Syria’ to support the armed opposition. Fourteen factions of the 28 were also recipients of the U.S.-supplied TOW anti-tank guided missiles.” (A graph by SETA naming the various militias and the type of US support they received is at the end of this article).

This is from Max Blumenthal, “The US has backed 21 of the 28 ‘crazy’ militias leading Turkey’s brutal invasion of northern Syria,” The Gray Zone, October 16, 2019.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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