ABSTRACT
The main point to be made is that planning has succeeded in avoiding the main inconsistency in unplanned economies of the pre-1914 type, namely, the underutilizing of productive capacity as a consequence of business cycles and of structural disequilibria. Individual freedom, social diversity, and creative change were the goals of all the John Lockes, Adam Smiths, Thomas Jeffersons, and their successors, so they rightly opposed the medieval forms of thought involved in state centralized planning. Planning, even at the individual level and even when done by the most knowledgeable and rational human being, is an extremely inefficient way to achieve goals in any situation other than one that is new that involves significant uncertainties for the actor. The general point is to internalize losses and profits into the smallest idea-creation and product-manufacturing team possible—bring the market incentive to each individual as directly and immediately as possible, while at the same time optimizing all the powerful motivating forces of teamwork.
