The Absurdity of Central Planning By Bill Bonner | November 11, 2010
That’s the great beauty of a real economy! It rarely
takes you where you want to go…especially if you’re
an activist central planner or an interventionist finance
minister. But no matter how much you struggle with it…no
matter how badly you manipulate it…no matter how much
you try to stitch it up with rules and regulations…
…it ALWAYS takes you where you deserve to go.
Look at what happened back in ’71. Nixon’s
move to take the US entirely off the gold standard was hardly
noticed. Because he announced something even stupider that
day. He told the world that henceforth prices and wages
would be controlled by the feds. No kidding. His wage-price
controls were designed to put a brake on inflation.
Did they work?
Ha…ha…do you have to ask? If you could control
inflation by executive decree…well, it would be a
lot different world than the one we live in. You can’t
do that. And when you try to do that, you don’t get
a world of stable prices, growth and prosperity. What you
get is what they got in the Soviet Union, when they controlled
the price of everything. They got a lot of nothing…nothing
on the shelves…and nothing worth buying.
We remember visiting Poland in 1977. It was a delightful
place for a driving holiday because there were no cars on
the roads. People didn’t have cars. And the trucks
were usually off the roads too. They were broken down…usually
alongside the road with their hoods up.
There were no hotels either. And no restaurants worthy
of the name. You just had to make do.
You’d go into a shop. It was drab. Empty. There were
usually two or three dozy clerks…but nothing to sell.
Just a few cans. What was in the cans? It was hard to tell.
But since that was all there was, you bought it and ate
whatever dreadful thing was inside.
Later, in the ’80s, we took a trip to the Soviet
Union. On the plane with us, on a flight from Moscow to
Minsk was a woman with a toilet seat in her lap. It turned
out that she had been raised in Tennessee and had a twang
to her English.
“What are you doing with a toilet seat,” we
wanted to know.
“Oh… I just bought it in Moscow,” she
explained. “There aren’t any toilet seats for
sale in Minsk.”
“But isn’t that an expensive way to get a toilet
seat? I mean, this is a three-hour flight.”
“No… The flight is priced in rubles. And the
ruble isn’t worth anything. It actually cost me more
to buy the toilet seat than the roundtrip ticket.”
See what central planning produces? Absurdities. Monstrosities.
Imbecilities. Coming soon…to your neighborhood.