Christopher J CoyneNational Economic Planning: What Is Left?

There have been many good defenses of the market over the years, but many of them are somewhat reactionary criticisms of leftist social values (equality, a more egalitarian power division, etc). This book is different in that it's biggest aim is to show that the spontaneous market order may actually help to enhance these "leftist" social values better than economic planning, traditionally valued by "the left." It does so with two Hayekian arguments: planning is generally inept because of the knowledge problem, and planning always succeeds in creating wider power imbalances between rulers (and their friends) and ruled.The first of these problems is gone over in the first three chapters, where Lavoie uses work by Hayek, Mises, Polanyi and others in economics and philosophy of science to explain why planners couldn't possibly possess all the relevant knowledge to control an economy as well as a decentralized market process. It is not simply that humans (even planners) are limited enough not to be able to contain all the knowledge in their heads, but the fact that much of the knowledge that is relevant to economic decisions is not articulable in a way that one person can convey it to another. Entrepreneurs may not be able to explain why they go with one technology of production over another; consumers may not be able to explain all of the unconscious reason why they go with product x over product y; business people may not be able to explain all of the reasons they make the myriad of adjustments they do in response to different market variables. So, not only is it impossible for one head to possibly grasp all the possibly articulable knowledge needed to plan an economy coherently, but there is much knowledge that will be very inarticulable - what Polanyi calls "personal knowledge."From there, Lavoie switches to another argument against many then-recent calls for national (and "democratic" decentralized) planning. All it does, Lavoie notes, is gives more power to elites, who can now decide who to give what to and who to take what from. Even those on the left who advocate for a more local "democratic" planning (where workers would control decisions by voting on them) end up supporting the idea that decisions be carried out by elected - or appointed - representatives of the people. And why trust them? According to Lavoie, this is the question advocates of decentralized planning can't really answer other than appealing ot a faith in democracy (even when so many of them voice disdain for results actually produced under democracy).Lastly, Lavoie's last chapter - the bread and butter, to me - is a historical case that economic planning has served almost always to widen power gaps rather than reduce them, promote militarism rather than peace, corporatism rather than egalitarianism, etc. Drawing on histories like Kolko's  Triumph of Conservatism  and Weinstein's  The Corporate Ideal in the Liberal State, 1900-1918 , economic planning in the early 20th century became a way to solidify the status quo rather than change it: businesses used regulation to protect themselves from competition, the state used it as a way to perpetuate the War State, and unfortunately, the left was somewhat duped into thinking that this planning would bring about social change rather than, as it actually did, increasing stasis.So what does Lavoie advocate? A market system that uses price as a coordinator between actors. If I have one criticism about this book, it is that I am not sure Lavoie spent enough time on this explicit defense, and probably should have followed his final chapter with a chapter going into more detail about how markets are better at working toward egalitarian goals than planning. (Not saying I disagree with his stance, just that I am not sure those on the left - for whom this book is written - will be convinced without a more explicitly made case). Simply put, markets do not allow anyone to coerce; at best, companies attain power by persuading. And while unequal results may emerge from market competition, it will be nowhere close to the power imbalance experienced by vesting one group with sole authority to "plan" who gets what and who gives what.Anyhow, anyone interested in a great use of Austrian economic ideas (particularly those of Mises and Hayek) should read this book. A great work to get a sense of the arguments for (and against) planning in the 1980's. Triumph of ConservatismThe Corporate Ideal in the Liberal State, 1900-1918

The best book I have ever read on the subject. Not always easy reading but follows a clear logic. Should be required reading for everyone who wants to understand what is wrong with the EU :)

Great book. This book is probably among a select few books that take a Hayekian or Austrian approach (knowledge problem based via Hayek rather than calculation problem based via Mises directly) to consider planning and the more recent noncomprehensive planning alternatives (from Lange to Sweden to Welfare States but also fascism and the Reconstruction Finance Corporation & MITI in Japan) and to so so in a fairly relaxed sort of review style.Lavoie considers planning from a theoretical perspective, similar in approach to the old planning debates but not as rigourously and takes on several separate proposed kinds of planning; but he also spends much of the book teaching the layman's introduction to the knowledge problem and in a post-Hayek world, introducing some of information & complexity theory. He spends one chapter and includes an appendix to consider further the knowledge problem (or growth-of-knowledge theory) as it relates to scientists, he also spends one chapter on biological models. He then uses these foundations to consider the problems inherent in a planned economy.If you're still not sure its a worthwhile example of this literature, note that Hayek wrote a blurb for the backcover!A very readable book with several interesting interwoven insights, review of broad areas and particular rebuttals, it will leave you hearing the underlying desire for noncomprehensive planning in every politician's speech for some time.

Thorough, closely reasoned and factual, reflects the best thinking on the failures of the planning dream