The Public Policy

...But those second and third purposes of the Plan can obviously not be achieved in our present institutional framework: Planning would work much more "rationally" if decisions were made by the planning board itself, and perhaps the intention of its proponents is to establish the foothold for a Board which would gradually assume greater responsibility as the electorate grew more accustomed to the idea of "planning...

...Of course not: a moment's reflection would have convinced him otherwise...

...On the other hand, they are exercises in utopian wishful thinking: the economy is in sorry shape, and so people like Mr...

...Furthermore, the difficulty would only have begun...

...These, for example, are the words of Robert V. Roosa, Wall Street investment banker and member of the Initiative Committee: "How long ago...

...rather it was the attitude, espoused by many proponents of planning, that we didn't have to worry about deficits...

...Why should we have "affirmative action" policies that explicitly violate the civil rights legislation under which they are authorized...

...For the utmost in vagueness, however, one must turn to the legislation itself...

...and under the same basic constraint that limits present policy, i.e...

...It is quite another to plan for an extraordinarily complex economy, where many measurable objectives—e.g., full employment and price stability—are often at odds with each other, and where many other objectives—e...

...where necessary, Congress must pass specific enabling legislation...

...A much more appropriate model might be the complete failure of the Federal Energy Administration to fashion a coherent energy policy out of the contradictory and nebulous goals that dominate our thinking about the subject...

...And nearly everyone points out that corporations are forever planning their future...

...He showed that "national economic planning," American-style, will not be a completely planned economy like the Soviet Union's, in which central planning boards dictate everything from the price of bread to the supply of buttons...

...One example of this evidence is the transparent silliness of so many arguments for planning...

...But that is not the way a democratic and pluralistic polity works...

...After describing how well a market economy responds to consumer preferences, he pointed out, quite rightly, some of the defects of the marketplace—e.g., its tendency to ignore external costs like pollution...

...This is the important question, and in helping us answer it the present legislation is akin to the explanation that morphine causes sleep on account of its dormative faculty...

...By this I do not mean that they should exercise greater foresight in anticipating the consequences of their legislative and administrative acts...

...and an Initiative Cornmitteelor National Economic Planning—made up of prominent academics, businessmen, and labor leaders, and headed by Wassily Leontief, the Nobel Prize-winning economist, and Leonard Woodcock, president of the United Auto Workers—helped him draft it...

...6) The departments and agencies must follow instructions from Congress and the President...

...Remember the second and third purposes of the Plan: to "identify the resources required for achieving the economic objectives of the plan" and "to recommend legislative and administrative actions necessary or desirable to achieve [them...

...Schlesinger: I have dwelt on his remarks because I think they typify so many arguments for planning...

...I mean that they should pay closer attention to the results of their policies, and when those results are not what was intended, that they should revise the policies...

...But aside from a detailed explanation of the structural framework for planning, Mr...

...Even last year, when the danger of natural gas controls had become obvious to almost all responsible economists—and presumably to everyone who would staff an Economic Planning Board—it is interesting to note than Sen...

...by our elected leaders and representatives and their appointed bureaucrats...

...He said that planning will be necessary to save American capitalism, although, forever the pessimist, he did not think it will be a panacea...

...Heilbroner wrote a generally sensible article for the New York Times Magazine ( January 25, 1976) on how America is drifting into planning...

...Schlesinger declare—on the basis of no evidence—that things would be much better if only we had planning...

...g., "balanced" economic growth—are not even measurable...

...Not long ago, Mr...

...Another reason I think that proponents of planning have merely not thought through their subject is that their arguments are sometimes not just silly, but completely empty...

...One wonders whysuch a trifling impact would inspire the proponents of planning to such enthusiastic panegyrics...

...Finally, there are some perfectly straightforward reasons for some of the problems Mr...

...He acknowledged the difficulties of long-term projections, but he pointed out that American planning would be flexible...

...The proposed legislation stirred up an enormous debate—as automobile companies, unions, contractors, and environmental groups all lobbied extensively—and it is doubtful that Congress, under national economic planning, could legislate many such proposals...

...But the clearest illustration of how the proponents of planning have not really thought through their proposal, is that as their bill now reads, national economic planning would really bring about little change in the character of government policy-making...

...The world economy, say the bill's proponents, is becoming so complicated, and the decisions facing the coming generation are going to be so tough, that we had better begin planning for the future, and discussing long-term goals rationally...

...But, by the same token, it is nonsense to blame America's present troubles on a "refusal to plan...

...Now when intelligent men devote considerable energy to espousing such a vague proposal, one is entitled to be suspicious...

...To judge how little difference planning will make, one need only consider the (simplified) sequence of planning decisions that the current legislation envisages...

...Finally, bureaucracies, as everyone is pointing out these days, have their own momentum, and there is little reason to suppose they would follow Presidential or Congressional orders...

...Before we let anybody draw up the blueprint for our national economy, let us make sure at least that he knows how to draw up a bill...

...These are the words of Hubert Humphrey, at hearings before the Joint Economic Committee of the Congress, when he was asked what he meant by "planning" in introducing the "Balanced Growth and Economic Planning Act of 1975...

...After all this, it may come as a surprise that I favor planning...

...rather it was our tendency to elect irresponsible mayors like John V. Lindsay and Frank Rizzo who committed their cities to spend more money than they could possibly raise...

...rather than sticking to outdated forecasts of economictrends, the plan would be revised every two years...

...Let us stay with energy a moment, because another of the silly arguments often put forth is that if only we had had planning, many of our decisions about questions like energy would have been wiser...

...Now does Mr...

...I believe—and I hope—that the proponents of planning are merely engaged in wishful thinking and putting on dramatic poses...

...Congress must then pass all the specific legislation necessary to implement the Plan's recommendations, and constituent and lobbying pressures are usually greater in debates about specific legislation than in discussions of general principles...

...1) The Economic Planning Board draws up a Plan, in consultation withstate, local, and regional planning agencies...

...At best (or at worst), planning would modestly centralize some decision-making, and would lead to a little more regulation of our already overregulated economy...

...The proponents of planning have the notion that we can make our decisions in a systematic, rational way—first by deciding what our objectives are, and then by figuring out what the appropriate policies are for achieving them...

...In that case, the planning bill does have coercive implications—for those second and third purposes are so vague as to leave open the possibility of a planning board making all major decisions about how the economy should allocate its resources...

...in the case of NASA, to land on the moon...

...if the radar had been in place and were capably manned, would an alert planning staff have signalled the dangerous inconsistency between the Federal Power Commission's consumer-oriented preference for low natural gas prices and the resulting shrinkage of new domestic production...

...the near-impossibility of eliminating any program that appeals to any vested interest group...

...New York Times, February 8, 1976...

...Certainly everyone wants to have balanced economic growth, but many people will disagree about the desirable balance, and some will even disagree about what the word "balance" means...

...Many alert economists pointed out this "dangerous inconsistency" 22 years ago when natural gas prices were first controlled...

...we will come down to a much more clear and precise understanding of exactly what we are talking about and what we mean...

...Schlesinger actually believe what he has written...

...Or they have something up their sleeves, and, like the totalitarians Orwell described so well in "Politics and the English Language," they deliberately use unclear words to obscure their real intentions...

...4) This resolution must pass both Houses of Congress...

...He predicted that the scope and direction of planning will vary according to unforeseen circumstances...

...Humphrey's bill (May-June 1975), he too tried to allay some widespread apprehensions...

...Humphrey and five of the seven co-sponsors of his planning bill voted not to decontrol gas prices...

...One need only ponder the statistic that our real per capita income is higher today than it has been in all but "The Alternative...

...5) The President must implement the Plan as approved by Congress to make sure that departments and agencies in the executive branch act so as to further the objectives of the Plan...

...The Alternative: An American Spectator May 1976 23...

...On the one hand, they are dramatic rhetorical poses by which he and his fellows can distinguish themselves from those benighted souls who fear planning...

...In a recent editorial describing a draft of Sen...

...These second and third purposes, as we shall see later, could mean just about anything, but for the moment let us consider the goals that the bill directs the Economic Planning Board to focus on in establishing the nation's economic objectives: "full employment, price stability, balanced economic growth, an equitable distribution of income, the efficient utilization of both private and public resources, balanced re2 0 The Alternative: An American Spectator May 1976 gional and urban development, stable international relations, and meeting essential needs in transportation, energy, agriculture, raw materials, housing, education, public services, and research and development...

...By the time the Plan got through the higgling and bargaining of Congress—if it ever got through—it would look quite different from what the Economic Planning Board proposed, and there is no reason why it should be at all "rational" or systematic...

...But as Herbert Stein suggests in his excellent little study, Economic Planning and the Improvement of Economic Policy (American Enterprise Institute, 1975), it is a little "odd that the advocates of rationality and foresight should be unable to give a clear picture of 'exactly what we are talking about and what we mean.' " Consider the case of Robert Heilbroner, economist, and member of the Initiative National Economic Planning Piffle Committee...

...Senator Humphrey, who may be President next year, has said he considers the bill "to be the single most important piece of legislation in my twenty-five years of service...

...by the same people who make them now, i.e...

...Humphrey's bill would set up an Economic Planning Board in the Executive Office of the President and empower it to prepare a "long-term balanced economic growth plan": this plan would (1) "establish [national] economic objectives...

...Can you imagine a more meaningless list of objectives...

...Japan indeed is suffering from the worst recession in decades as well as 25% inflation...

...It would be entirely inappropriate, of course, to blame the French and Japanese troubles on planning—the fault lies more with such things as the OPEC cartel and problems in the international money supply...

...But aside from offering some wise remarks on what planning will not be, he shed almost no light on what it will be...

...And this brings me to the other suspicion...

...The President must make sure the bureaucracy implements the Plan, and he will naturally be lax in emphasizing those parts of the Plan with which he disagrees...

...How is the Economic Planning Board going to determine what is balanced economic growth, or what are national needs in housing...

...Now it is obvious that at each of these six stages, the proposed Plan will be subjected to a furious debate, every pressure group and constituency putting in its two bits about the issues that concern it most...

...But the federal government is running increasingly out of control, and it is becoming increasingly clear that Congress and the executive branch have got to put their own houses in order: they have got to begin some serious planning...

...Why should we continue to require exacting tests for drugs when it has been convincingly shown that the delays in bringing drugs to market have caused more harm than any unsafe drugs that may have slipped through...

...First of all, while our economy is admittedly in a mess, it is not at all hard to imagine a worse one...

...The Baltimore Sun THE ALTERNATIVE, Post Office Box 877, Bloomington, Indiana 47401 Enclosed is $ Please enter a ^ new ^ renewal subscription to The Alternative for: ^ One year $8...

...The proponents of planning, however, frequently point out that Americans must be gently coaxed out of their fear of "planning...

...Three years $20...

...He pointed out that American planning would not be based on French and Japanese models, which, he admitted, have not worked particularly well (even though these are the world's two most successful planning systems...

...But enough of Mr...

...Second, insofar as our economy is now in a mess, it is a worldwide phenomenon, and the two economies with the most celebrated planning systems—France and Japan—are in worse shape than we are...

...Either they have not thought things through...

...Please print) Name Address City State Zip The Alternative: An American Spectator May 1976 21 two or three years, and therefore, that, with some very few exceptions, the average American is still better off materially than any average man has ever been in the history of the world...

...It was not a "refusal to plan" that was responsible for the largest peacetime budget deficits ever...

...But in so doing, they have guaranteed that all decisions coming out of the planning process would be subject to the same electoral, interest-group, and bureaucratic pressures as present decisions...

...Two years $15...

...The closest Congress has come to following such purposes has been its feeble efforts to estimate energy needs and to propose certain automobile and construction taxes designed to conserve fuel...

...But suppose they do have something up their sleeves...

...2) "identify the resources required for achieving the economic objectives of the plan by forecasting the levels of production and investment by [major sectors of the national and international economies...

...One simply cannot infer anything about the prospects of national economic planning from the success of war, space, or corporate planning...

...This is an essential part of any real planning, and it is the refusal to engage in this, rather than any failure to consider objectives rationally and sys22 The Alternative: An American Spectator May 1976 tematically, that constitutes our government's greatest "refusal to plan...

...One need only think of England, or India, or Argentina...

...consequences will always be unpredictable, and human judgments will always be fallible...

...It is one thing, however, to plan when you have an overriding concrete objective—in the case of war planning, to defeat the Axis...

...The present planning bill, needless to say, envisions no such planning...

...and (3) "recommend legislative and administrative actions necessary or desirable to achieve the objectives of the plan...

...They want to prove that planning can operate in America without subverting democratic processes or liberties...

...Decisions under planning would be made much as they are now, that is to say in a hodgepodge and piecemeal manner...

...I therefore do not fear the coercive implications of planning as much as some other critics...

...Or consider the case of Myron E. Sharpe, another member of the Initiative Committee, and editor of Challenge, a magazine at the forefront of the planning vanguard...

...In that case the vagueness of the present bill becomes frightening...

...The problem with this question, however, is that you don't need planning to give such signals...

...I wouldn't call it "national economic planning" and I see no need to set up some highfalutin "Economic Planning Board...

...So as not to impede passage, the drafters of the bill have been careful to put their proposed planning system squarely in the existing framework of democratic and bureaucratic institutions...

...Woodcock points to the success of the war planning office in mobilizing American industry and resources for World War II...

...2) The Plan must be approved by a Council consisting of all cabinet members and the heads of the Federal Reserve Board, the Office of Management and Budget, the Federal Energy Administration, and the Council of Economic Advisers...

...Why should we have a Secretary of HEW who cannot even control his own department, because, as Karl O'Lessker recently described it in these pages (quoting Richard Nathan), -unstructured and unmonitored spending for social services was closing out virtually all [his] opportunities for new initiatives in the social-program area" ? It is time that government began structuring and monitoring its spending and its policies...

...Fortunately, there is plenty of evidence to suggest that the proponents of planning are guilty only of the former...

...in the case of corporations, to maximize profits...

...Schlesinger mentions...

...Consider the way, for instance, in which proponents often point to previous planning efforts in trying to demonstrate the usefulness of national planning...

...3) The President submits the Plan to Congress and, after lengthy hearings, the Joint Economic Committee introduces a resolution recommending adoption, rejection, or modification of the Plan...

...is one of the liveliest, best written, best edited journals of ideas and politics we know...

...Sharpe could offer no greater inkling of what the process would involve than the tautological observation that planning would give us "a chance to consider goals in a systematic way" and "force us to think about the long run...

...Humphrey points to the success of NASA planning in landing a man on the moon...

...He observed that American planning, while it might be coercive, will not be totalitarian, for the planning board will remain subservient to our elected leaders and democratic institutions...

...It is rather an exercise in vagueness which will probably have little impact, but which, if it does have an impact, will expand government power without making government any more effective...

...Consider, for example, the following statement which appeared as the rhetorical climax in an article by Arthur Schlesinger, Jr., historian, and member of the Initiative Committee: "...it is hard to imagine a greater mess than the refusal to plan has got us into already: the worst inflation in a generation, the highest unemployment in 35 years, the worst decline in real output in nearly 40 years, the worst deficit in the balance of payments ever, the worst peacetime budgetary deficits ever, the worst energy shortages ever, the worst crises in municipal finance ever" (Wall Street Journal, July 30, 1975...

...And secondly, even if a planning board gave such signals, there is no reason in a free society why anyone should listen to them...

...Nor was it a "refusal to plan" that led to our municipal fiscal crises...

...And as for the simultaneous occurrence of high inflation and high unemployment, it is interesting to note that monetary and fiscal policy has in many ways been "planned" for at least thirty years...