Monday, November 11, 2013

Central Problem of Central Planning

I can't stand this indecision
Married with a lack of vision
Everybody wants to rule the world
--Tears for Fears

GMU Prof Walter Williams identifies the central problem of Obamacare or any centrally planned program for that matter. Effectively allocating resources to satisfy consumers requires more information processing capacity than any bureaucracy, no matter how intelligent its members, possesses.

In unhampered markets, producers must monitor prices, changes in consumer taste preferences, innovations, and hundreds of other variables. They must then process that information and nimbly respond to meet the needs of the market. Consumers, not producers, hold the keys to market success. It is the producer's job to listen, learn, and adapt to market dynamics.

It is impossible for a remotely located planning board to approach the effectiveness of thousands of spontaneous, complex, and creative actions made by local actors in pursuit of satisfying consumer needs.

Prof Williams wonders whether DC planners are too arrogant to grasp that fact, or whether they simply don't care because they have the power to coerce.

Either way, the outcome is the same: lower standard of living.


dgeorge12358 said...

Contrary to the claims of some of my critics and some of the editorial pages, I am an ardent believer in the free market.
~Barack Obama

dgeorge12358 said...

I think President Obama is the most radical president this nation's ever seen. And in particular, I think he is a true believer in government control of the economy and of our everyday lives. In my judgment, we are facing what I consider to be the epic battle of our generation, quite literally the battle over whether we remain a free market nation.
~Ted Cruz