Not knowing current reality makes planning very difficult

Hayek - of course - pointed out that the centre just never can know the economy in the level of detail required to be able to plan it. The collection of the necessary data, its processing, just isn’t possible. That’s before we get to how said centre isn’t going to be able to predict the future with any certainty.

Ah, but what if we devolve it all to the experts? That’ll work, right? Except that doesn’t either, as any one plan suffers from the same failures. What’s required is that multiplicity of plans which then offers options under changing circumstances.

Also, it has to be said that some acclaimed experts are not, in fact, such. As here:

I worked for BP for 30 years – the energy sector has become incompetent and greedy

Nick Butler

Strong claim. More expertise claimed:

Nick Butler is a visiting professor at King’s College London, and a former group vice-president for strategy and policy development at BP, and an adviser to Gordon Brown

Well, pass on that planning job then, we are saved!

Except, except:

The third challenge beyond the freeze is to secure adequate physical supplies of gas. This is a matter for close cooperation between the government and the energy sector. Other European countries, led by Germany, have been actively seeking resources on the world market to replace the supplies no longer coming from Russia. The EU has created a single-buyer mechanism and individual countries are pursuing new deals with producers around the world, from Qatar and Algeria to the US. Spare resources are scarce because investment levels have been low and new supplies typically take three to five years to come onstream. The result is that a physical shortage of gas across the EU is highly likely this winter.

Yes, a great deal of truth in that.

Germany and others are preparing for that risk with serious plans for rationing consumption. The UK, apparently considering itself immune to Europe’s problems, has done nothing and is not even matching the current voluntary measures being adopted across the EU to reduce consumption. Ministers seem not to realise that if countries such as France and Norway limit supplies to the UK this winter in order to meet their own needs, the shortages could be real and substantial. The urgent need is to secure a buffer of additional supplies and develop the long-neglected gas storage facilities that other countries take for granted. Securing and maintaining adequate supplies requires a public-private partnership with the common, overriding aim of maintaining energy security.

And that’s grossly ill-informed, even ignorant. Which is not a good look in a would-be planner.

Those supplies from Qatar, Algeria and the US? They’ll be liquefied natural gas. Which requires a very specific - and expensive - port facility to be able to land. An LNG decompression plant being something that Germany has none of - not a one. In fact the gas pipelines to the Continent are now stuffed full of LNG derived natural gas which is landed in the UK - from Qatar, Algeria, the US etc - decompressed in UK LNG landing plants and sent off to our confreres.

Far from having done nothing the UK has done the one thing that would alleviate those gas shortages - built the infrastructure to allow the world’s LNG supplies to be landed in Europe. Through, err, private companies and without a national plan to boot.

As we’ve remarked before there are problems with national planning as an economic structure. Hayek’s knowledge problem being one of them - that knowledge that would be planners don’t seem to have.

Not knowing current reality makes planning very difficult.