The problem with government planning things

There are problems with planning. There’s that uncertainty about the future which gangs aft agley the ability to make it arrive on time and in line as upon rails. There’s the quality of the people doing the planning of course, a talent for kissing babies not being notably efficient as a method of selecting those who should decide upon, say, what the energy production mix should be. There’s that problem with planning for everyone rather than just for the self-interested who bother to engage with the planning process.

But the really big one is that no one has a clue about the present:

But you don’t need to have spent those ten minutes on hold — or to have read MPs’ rather more critical report on the early months of the pandemic, published last week — to have doubts. The kind of doubts I get when I read that the government has authorised visas for 800 butchers, or 5,000 HGV drivers, or 5,500 poultry workers, to tackle the supply chain crisis.

In the very precision of those figures is a built-in assumption that the state has a perfect understanding of the employment market, just as it has a perfect understanding of infection rates. And yet as Dominic Cummings — remember him? — pointed out last week, this is the state that experienced large waves of immigration from the EU for 20 years but “was so useless at handling this, it could not even estimate its size to the nearest million”.

GIGO is not just some computing term, garbage in, garbage out is a truism of any system of calculation. It’s why philosophy spends so much time in defining terms before even attempting logical deduction - which is why the subject is still chewing over whether truth is actually beauty these millennia after folks started writing stuff down. And let’s not get started on the complications of thinking our way through “What is truth?”

If we don’t know the present then we cannot possibly plan our way to a preferred future. Simply because not knowing the starting point makes the navigation impossible.

Of course, this has been pointed out before. Hayek’s Nobel Lecture is on this very point. But it’s worth insisting, once again, that we need to pay more attention to it. Every attempt at central planning does indeed leave us where we don’t want to be. For the simple reason that we never do have much more than a vague clue as to our starting point.