Show The Voice of Business Central Centra economic planning dont don't plan on it if Uy By Richard L. L usher Lesher President of or the Chamber of Com Commerce merce of the United States Stales Fed up with the armchair quarterbacking of other economists Federal Reserve Board Chairman Arthur Burr dryly explained to a Sena Senat Senate I Committee I know a little about the past and I know next to nothing about the future In contrast with some other members of my profession Indeed many economists will admit to having been caught with their parameters down by bythe bythe the recent behavior of our economy And therein lies one of the most telling objections to the recurrently fashionable concept of national economic planning We just arent aren't good goodenough goodenough goodenough enough to avoid botching the job NEVERTHELESS emboldened emboldened em em- by the success of 74 1971 wage-price wage controls and our present 1973 fuel allocation farce a diehard band of economic liberals is trying to drag us all one giant step backward into the future The vehicle for this bad trip is The Balanced Growth and Economic Planning Act of 1975 a bill to create a federal Economic Planning Board The Board would draw up a national economic master plan with the object of attaining full employment employment employment em price stability balanced economic growth an equitable distribution of income income income in in- come the efficient utilization of both private and public resources balanced regional and development stable International relations etc elc etc Could the Board attain Its ambitious goals I dont don't think so The reasons are many but butH butt H t me present three of the best FIRST central economic planning is incompatible with our political system Economic planning is not scientific It is highly political Questions of income distribution or the tradeoffs between jobs and ir inflation lation or between inflation and environmental protection for example are not susceptible to scientific solution Science can clarify the choices but each individual citizen will make those choices based on his own values Identifying the changing consensus of such values and altering public policy accordingly is the of democratic politics In other words in a democracy people must retain the right to change their minds And its it's a pretty safe bet that they will exercise that right But a planning agency that cannot make its plans stick would not represent any gain over our present methods of doing business It can be and is argued that such an agency would be only advisory However we already have a multitude of economic policy advisory groups groups and and the fact that they seldom agree is one of the best reasons in the world for not elevating one above the others SECO SECOND JD central economic planning would inhibit economic progress Many of sciences science's greatest discoveries such as penicillin and vulcanized rubber were the result of fortuitous accidents not a planned search And so it itis itis itis is with the operation of the free market The market constantly identifies and brings forth the means to serve needs that tha t have ven been re recognized at the national policy level The market also responds to what people really want rather than to what they feel obligated to say they want When official government policy ignores that important distinction black markets develop even in totalitarian states THIRD when an individual company makes a mistake the effects of that mistake are relatively limited But when the national government makes a mistake it is universal in scope Therefore it is entirely possible even likely Id I'd say that a central economic planning agency would magnify the swings in the business cycle rather than moderate them Congress would be well advised advised ad ad- to wait to evaluate its own experience with the new-born new Congressional Budget Office creation of which was supported supported supported sup sup- ported by the National Chamber before venturing into deeper economic control water watery waters in an overloaded boat Ironically it was a sponsor co of the planning act act Senator Hubert Humphrey D D- D Minn who cautioned an economic policy conference held early this year about the fal fallibility of government Congress he said cant even run the Senate restaurant |