From the point o f view o f econom ic organisation, Robinson Crusoe must have been fairly happy on his desert island. H is world was a simple agricultural one and was therefore, to a large extent, under the control o f the elements and divine providence. Further­ more, at least until the arrival o f Friday, he had only him self to please. Compare this situation with that o f present-day industrial soci­

ety. First, whilst Crusoe’s economy was restricted to the output o f corn and goats, modern econom ies are Capable o f producing an enormous variety of consumption and production goods and ser­ vices. Secondly , with the establishment o f legal system s and methods o f econom ic policy, extensive facilities for the control of the econom ic system came into existence, independently of Crusoe’s more natural controls. Thirdly — and possib ly o f the greatest significance — societies now comprise, not one (or two) members, but many millions o f individuals, each with their own particular view s regarding the appropriate allocation o f resources, distribution o f rewards and so forth. The fundamental econom ic problem o f relating commodity demands to supplies is therefore immeasurably more complex; in that the system is more compli­ cated, it is also presumably more prone to chaos. With the development of large-scale industrial societies, man­

kind has employed a number o f organisational forms and econom ic techniques in an effort to ensure that order is maintained. In this book, we shall be concerned with just one particular method — macroeconom ic p lanning-which we feel is o f great relevance to the provision o f a solution to the econom ic problems of the con­ temporary world. Starting from first principles, let us establish a few definitions. We take the term ‘planning’ to refer to a purposive, m ean s - ends process and we may define it as the deliberate manipulation o f the parameters o f a system in order to bring about a desired and

specified alteration in the operation o f the sy stem .1 The implica­ tions o f this definition may be demonstrated by a simple, if slightly facetious, example. Consider a mechanic on the forecourt o f his garage; in front o f

him stands a motor-car (a mechanical system ) with its engine running. Let us now persuade our mechanic to plan som e action to influence the functioning o f this system and fo llow his line o f reasoning. In the first p lace, to borrow some sociological term inology, the

mechanic will ‘define the situation’; that is , he will observe the system as it currently functions. In our case , he will presumably say: ‘I observe a car with its engine running.’ The m echanic’s second step is to compare his observations o f the prevailing situa­ tion with the way in which he would like to see it develop . Let us suppose that he now says: ‘I want the engine to s to p ,’ and we now have a state o f affairs in which the operation o f the system conflicts with the w ishes of the mechanic. At this stage, our hero might well retire from the forecourt to engage in a spot o f thinking. ‘What strategies could I pursue’, he might ask, ‘to influence the system according to my w ishes? As an initial option, I could ignore the engine and hope it stops by itself, although experience suggests that this is unlikely to happen. A lternatively, I could drive the car into a brick wall. All things considered, I believe that the best approach, in terms o f the highest probability o f su ccess , would be to throw a spanner into the w ork s.’ Thus convinced , our mechanic returns to the car, w ields his spanner and, lo and behold , the engine stops. Let us summarise the main points o f the m echanic’s approach.