Wednesday, June 23, 2010

Wartime Planning...Easy (Part II)

In Part I, I asked what economic planners should plan for. But answering this question requires the reader to understand the role of an economic planner. To paint as clear of a picture as possible, I will constrain our considerations to what we observe in the real world. In any case I can imagine throughout history, the role of economic planner was held by those who retained political power in their country.

The nature of politics is such that the ruling class, or the political party holding power at a given moment, will likely pursue policies or directives that perpetuate their control. They want to retain power. Assigning the responsibility of economic planning to the political class in control has lead, in the past, to economic planning designed to increase that control. I am unaware of any ruling regimes that have used economic planning to decrease their political power. Indeed, given the desire to maintain rule or control, failing to use the powerful tool of economic planning to further that desire would be irrational. It is generally safe to assume that people are rational in the weak sense that they generally do not do things that directly contradict what they see as in their self-interest.

Thus, let us return to the question of what economic planners should plan for with the following information in mind. First, economic planners are those who hold political power. Second, these individuals do not want to relinquish political power. So, what do you think economic planners (in the real world) should plan for?

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