Common Error No. 70


70. "A sensibly planned economy is more efficient than random chaos."

But who advocates random chaos?  The market economy is not random disorder; it is a spontaneous and unplanned order. The so-called "planned" society means one which is planned at the centre by one mind or a few. The free society is one in which planning by individuals of their own lives and circumstances cumulatively produces an overall order not planned by a few, but emerging from the actions of the many.

The free economy is more rational than the planned society. First of all, it contains far more information than can be held by one human mind. Secondly, that information is continually being updated by individuals. Thirdly, it is constantly changing and adapting to new circumstances, and modifying itself, learning from errors and improving itself. The planned society has none of these improving characteristics. It makes one giant forecast and attempts to fulfill it, where the spontaneous society makes millions of small-scale forecasts and constantly modifies them.

The planned society responds imperfectly to the priorities of the planners. The spontaneous society responds constantly to the needs and desires of its citizens. Its overall order is at once more efficient and more moral. It converges on consumer satisfaction and directs resources to those who are successful at achieving it. At the same time, it allows individuals to nominate their priorities and freely to pursue them, instead of making them live as the planners decide is appropriate.

So a free society is more organized than random chaos, and cleverer than any centrally-planned alternative. It meets our needs efficiently and continually directs resources to those who are good at doing so. It enables millions of us to pursue different goals at the same time, while inadvertently aiding each other. Central planning forfeits that spontaneity and that problem-solving ability. It substitutes the priorities of the few for the needs and aspirations of the many.