National Economic Planning: Must It Be Orwellian?

...We may need better criteria for selecting them, but they are the only ones who can make planning work...

...In this respect, I hardly do justice to the utter tedium of the bill itself...

...The reader may note a slightly tedious aspect to this narrative...

...For the most part, these merely aggregate and endorse the separate planning targets of the various firms...

...People should be free (indeed, encouraged) to start new enterprises, The entrepreneur should come under public control only if his business becomes a giant, with the power to threaten the lives of others...

...The planners must focus on problems which can be easily quantified...

...In what new ways could we use the resources freed by such a reduction...

...Cartels are encouraged, on the assumption that they are more efficient, more stable, and more adept at planning...

...Where there is divergence between the plans of the firms and that of the government, negotiations take place in an attempt to reach a compromise...

...The Board’s draft Plan would be reviewed by a Council of Economic Planning, composed of all Cabinet members and others in the Executive branch with major economic responsibilities, such as the Chairman of the Federal Reserve...

...Titled The Balanced Growth and Economic Planning Act, the Humphrey-Javits bill is the first attempt since the 1930s to give polite legislative discussion to a comprehensive planning scheme...

...The latest, to be implemented this year, is less oriented toward investment than some previous ones, but retains many of the same features...

...In the old days, before Khrushchev and de-Stalinization, the planning process was monolithic and its implementation totalitarian...

...en tial Freedoms As for political freedom, there is absolutely no reason for abridging it in a mature, literate, reasonably cohesive society like ours, with 200 years of success as a democracy...

...Since then, there have been six more French National Plans...

...The system recalls the old Salazarist slogan: “Everything for the state...

...With Senator Jacob Javits, Humphrey has introduced a bill which should sharpen the planning debate considerably...

...Thanks to the planning reforms, the oppressive aspect of life in Budapest (where I found myself last summer) is no longer inefficient services and poor quality products...

...The big change came in 1965, when Premier Alexei Kosygin announced a series of economic reforms which decentralized planning and gave much more latitude to the individual enterprise...

...David Ignatius is an editor of The Washington Monthly...

...The grammatical juxtaposition of basically opposed concepts like “democratic” and “planning” is a useful device...

...What do we consider to be the optimum size of the city...

...then back to Congress again, which would “approve or disapprove, in whole or in part, the revised Plan...

...The Swedish economist Gunnar Myrdal has noted the way in which planning might actually increase our freedom as individuals: “. . . You have government controls of all sorts over your private lives, and still you are proud of having no planning...

...It was an entirely top-down system, unresponsive to consumer sentiment, and the goods often sat on shelves for lack of demand...

...To be fair, the friends of planning seem to have deceived themselves on this point as a pre-condition to deceiving the rest of us...

...In an interview, Humphrey has explained the kinds of questions he hopes “democratic planning” will tackle: “How much urbanization does society really want...

...What is the rate of depletion of key resources and what is the most costeffective use of them...

...Our economy may already be largely planned by a technocratic elite of corporate managers...

...But, because they will have so much power, planners should be quickly and easily dismissable if the electorate, through its congressional representatives, disagrees fundamentally with what they’re doing...

...Where the Hungarian workers still wear drab proletarian costumes and ride the streetcar, the political and managerial elite wear elegant Italian clothes and drive around in fast automobiles...

...But this project reeks of “planning,” so there has been little money for it...

...To opponents, it connotes totalitarian regimentation and inefficiency: the Ministry of Plenty in Orwell’s 1984 babbling nonsensically about pig iron...

...Planners concentrated on allocating resources to those sectors where investment was most needed and would produce the highest return...

...If the planners can show that it is socially inefficient and environmentally dangerous to build another steel mill in Gary, Indiana, then they should have the power to stop it-and if no private firm is willing, the power to charter a public corporation to build a’ plant where it would be safe and efficient...

...To facilitate consensus, corporations (and to a lesser extent, labor unions) are brought into the planning process...

...So too with the phrase “democratic planning...

...If the planners can show that private automobile travel is inefficient and environmentally dangerous, they should have the power to restrict investment in new automobile plants...

...Without this elitist aspect, and the force of coercion, planning makes little sense...

...Efficient public sector planning would have been infinitely preferable, but the buffooneries of our democratic system in action prevented a coherent plan from taking shape...

...I’m not sure they can answer all of Humphrey’s sample questions, which raise issues which are not technical at all, but instead require value judgments about what makes for the good life...

...The largest and best-organized interests gradually develop a symbiotic relationship with the planning elite...

...Surely we can find out...

...incompetent commissars in the Soviet Union producinp...

...Where we can see why society may wish to restrict the corporation president’s range of official action, there is no such justification for limiting an individual or a small group...

...And the “~urplus’o~f a state enterprise measures its efficiency in much the same way that a firm’s profit does in the West...

...They are trying to slip something past us...

...The real trouble with the HumphreyJavits bill is that it is dishonest, or at least disingenuous, on the question of bureaucratic control-the 1984 factor...

...After the Council had approved the entire Plan, the President would submit it to Congress for extensive review...

...Once approved, it would stand as the country’s economic blueprint for the duration of the planning period...

...How much inflation and unemployment are we willing to tolerate...

...The planners, after consulting with the larger corporations, set “indicative” targets for output, employment, investment, product development, imports, exports, and income distribution...

...Stubborn America While the rest of the world happily converges toward the planned corporatist economy, the United States remains something of an anomaly...

...By comparison with other countries, where public sector planning is not so starved of talent and money, our data collection is shockingly bad...

...In his famous essay, “Politics and the English Language,” George Orwell noted that the word “democratic” is especially liable to this sort of manipulation: “It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy...

...As the power of the Eastern European technocrats grows, the inequality of the class system is likely to become even more pronounced...

...But the electorate has thus far refused to allow the final step: full integration of corporate planning and the government...

...Compromise is usually possible, given the basic identity of interests b et we en go vernmen t economic managers and corporate economic managers...

...The bill that finally emerged, after incredible delay, was not really a plan at all, but an index of the relative strengths of various organized interest groups in the United States...

...Humphrey and Javits have taken pains to build an elaborate system of checks and balances into their bill...

...Are we willing to trade rapid economic growth for improved environmental quality...

...What population levels can give us the best in terms of cost-effectiveness programs and living conditions...

...Today, the central planning authorities specify only the volume of final output they want and the total wages bill, leaving the firm to decide on the most efficient production techniques, to contract for its raw materials, and to hire its workers...

...The last time I checked, the Office of Management and Budget had one and one-half full-time staffers working to compile the upcoming edition of Social Indicators...

...What is more important, we have all of the vices of big government and none of the virtues...

...But unless he’s lived in a dozen different-sized cities, he’s unlikely to know much about which size is “best...

...People tend to have rather strong feelings about economic planning...

...Where is technology not being adequately developed by the private market and could a public corporation do a more efficient job...

...More important, the two key features of capitalism-prices and profits-are becoming part of the Soviet system...

...The political issues will be, in every way, more difficult and important than the technical ones: How much equality do we want in income distribution...

...millions of left shoes and noiight shoes because someone at Gosplan misplaced a page of the National Plan...

...In this framework, planners should have the right to abridge certain economic freedoms...

...Six to eight months before the beginning of every plan year, the Planning Commission would prepare a “preliminary balance’’ for the entire economy and send “control figures” on inputs and outputs to each industrial ministry...

...To some, this may sound like a dismal throwback to the early 1960s...

...Behind Winston’s back the voice from the telescreen was still babbling away about pig iron and the overful’llment of the Ninth Three Year Plan...

...I have real doubts about whether the Congress and the public can play a meaningful role-of the sort sketched in the Humphrey-Javits bill-in the process of setting targets and deciding what is the most effective way to achieve them...

...The country managed to get through the last two “Energy Crisis” years only because “planning” was being done outside government, by the oil companies...

...What should the planners focus on...

...But there are questions which the planners can solve...

...This is certainly democratic, but it is also likely to prove utterly paralyzing in a non-parliamentary system like ours...

...The Council’s role would be consultative: the Secretary of Transportation, for example, would examine the Plan to make sure it contained sound targets for transportation policy...

...To supporters, on the other hand, planning is the painless cure-all to every economic problem, so perfectly rational that only parochial politics and stupidity could have prevented it from taking hold in the United States...

...Economic planners could give good answers to these questions...

...These targets were then passed on to the various state-owned enterprises, whose managers were instructed to stick to the “plan,” using the specified materials to produce the specified output...

...The French badly needed economic discipline after the war, and the first French National Plan, from 1946 to 1953 succeeded in mobilizing resources for rapid rebuilding of French industry...

...The process will be, at the same time, centralized and decentralized...

...Congress struggled to protect other well-represented interests...

...Today, both the planners and the corporate managers tend to be drawn from these schools, where they have developed friendships and common goals...

...Where are there supply bottlenecks in the economy and how can they be removed...

...Because one group called “the best and the brightest” clearly failed, the idea has crept into our thinking that we shouldn’t seek the best and the brightest for public service...

...Corporatism’ A look at planning systems around the world clarifies the choices we will face in this country if we ever decide to get serious about planning...

...The final question-what coercive powers should the planners have?-is the most vexing one...

...Any new economic or social programs would have to be justified in terms of their effects on the overall Plan and its targets...

...Three Questions There are three hard questions that we must confront if we decide that we are willing to consider planning in the United States: Who should do the planning...

...Efficiency and order imposed by planners (communist or non-communist) have dangers of their own, and some may find the patchwork, unplanned system that has developed in the United States preferable to a more rationalized system...

...The Ford Administration did its best to protect the energy industry...

...The National Plan, after being deliberated by all members of the Cabinet and approved by the President, is to be sent to Congress for review and modification within 105 days...

...In a planned economy (of a progressive political complexion), a corporation would not be free to use scarce capital resources to produce doggy diapers or foot deodorants for the affluent if there was a shortage of housing for the poor...

...The Plan would include a forecast of production and investment over the period...

...well, free enterprise...

...Planners shouldn’t be dictators, then...

...For the very inefficiency of the system-the sort of absurdities detailed each month in this magazine’s “Tidbits and Outrages” section-acts as a check against totalitarian control...

...Through gratuitous allusions to Alexander Hamilton, Albert Gallatin, Andrew Jackson, and other historical notables as “planners,” and by their repeated use of such simplistic analogies as “every family knows it needs to plan its expenditures,” the Humphrey-Javits forces attempt to make planning sound as American as...

...All large corporations become, in effect, state corporations: encouraged and aided by the state, sharing the state’s priorities, working with the state to thwart foreign competitors...

...Even so, in recent years Soviet planning has moved closer to the Western European type, giving credence to the theory that the world’s economic systems are converging...

...There is, however, one aspect of planning which ought to tantalize conservatives: it might* restrict the freedom of do-gooder liberals to expand the government bureaucracy...

...Briefly, here is what the Humphrey-Javits bill proposes to do to restructure economic policymaking: It would create within the Executive branch a t hree-me mber Planning Board with a staff of 500 and an annual budget of $50 million...

...While one cannot be altogether confident that these issues can be resolved through the political process, the alternative-a value-judging elite to decide them for us-is clearly intolerable...

...The Board’s job would be to formulate a National Economic Plan for the planning period (unspecified in the bill, but usually assumed to be four or six years...

...Shadow prices” attempt to duplicate the market prices of a corporate economy...

...More important are the cultural factors which make the French “indicative” approach work...

...This sort of “consensus” planning tends to work especially well in countries which have had the historical experience of fascism, like France and Japan...

...Clearly, then, the fears of conservatives that planning will restrict individual freedom are not groundless, especially if the individuals involved happen to be corporation presidents or labor leaders...

...Words of this kind are often used in a consciously dishonest way...

...An individual who commands his own labor power is different from a corporation president who commands that of many thousands...

...In recent years, there has been some effort to improve collection and analysis of data, through regular publication of a volume entitled Social Indicators...

...But we pay a price for our refusal to plan...

...The modification of the noun “planning” by the adjective “democratic” is meant to imply that the community will participate at each stage with the planners in formulating and implementing national goals...

...On the first two questions-who should plan and what should they do?-I have to take what will sound like an elitist view...

...How in the world is the citizen supposed to be able to say something useful on “the optimum size of the city...

...Congress and the public must set the overall political context in which the planners do their problemsolving...

...On the simplest level, the problem of mushrooming social spending has been one of data collection...

...One might speak, in a similar way, about “Christian racism,” or “humane torture,” or “earnest mirth” and presumably mean something by it...

...To see why, we need only consider the events of the last two years, as Congress and the Executive tried jointly to work out a rudimentary “plan” for energy consumption and development...

...Which it isn’t...

...The challenges we are likely to face in the future are so difficult, and will require such discipline from society, that an argument can surely be made that, for our own good, we should surrender all power to the planners...

...This meant that even if the government had decided to make a disciplined effort to improve housing in the cities, it would have had no way to measure its progress, or to compare the method chosen to other possible approaches...

...The whole point about planning is that it is supposed to break through this kind of bureaucratic and political logjam...

...But I am not proposing them as a theocratic priesthood which will make all decisions...

...Soviet Planning In communist countries, planning can, of course, be implemented without any semblance of democratic consent...

...Robert Heilbroner has argued the logic of this in his gloomy Inquiry into the Human Prospect...

...But presumably by “we ” Humphrey doesn’t mean the citizen at all, but an elite of technocrats, who can study the problems in a more detached, scientific way...

...As John Sheahan noted in a survey of French planning in Challenge magazine: “If ITT was a French corporation, the Planning Commission would be its natural ally...

...If the planners can show that the number of satisfactory low-income housing units is declining over time, they should have the power to mobilize resources to build new houses...

...This not only sounds sweetly reasonable, it sounds soporific, and that is my quarrel with the advocates of The Balanced Growth and Econornic Planning Act...

...Citizen” groups can also intervene to protest aspects of the Plan which trouble them It then goes back to the President for further modification...

...By comparison with leading European countries, our economy is highly unstable, our unemployment rate very high, our investment low, our growth sluggish, our exploitation of natural resources anarchic...

...From the experience of other countries, we can be sure that planning is no panacea...

...Managers would be rewarded with bonuses if they produced more than the planned targets and demoted (or worse) if they produced less...

...The democratic liberties guaranteed in our bill of rights must remain privileged...

...As one economist predicted in the 193Os, the New Deal brand of limited intervention in the market has led to “an impairment of the efficiency of the competitive system without the compensating benefits of rationalized collective action...

...If you had more planning for the big things in society, then you wouldn’t have to interfere with individuals’ actions...

...and a bst of legislative recommendations necessary to achieve those objectives...

...How far should they be allowed to dictate to the rest of us...

...In addition, the French have no tradition of antitrust...

...Both tend to favor high growth, investment, and exports...

...In what follows, I will offer an unsentimental evaluation of the bill, hoping to show that it is neither as sweetly reasonable and unobtrusive as the advocates imply, nor as monolithic and wasteful as its opponents claim...

...I must admit my doubt that a life in total service to Heilbroner’s supremely rational, species-preserving planning elite would be worth living...

...It is now the same as in New York or London: extreme inequality...

...The planners should be the smartest and most principled public officials in the country...

...In a 1965 study, a researcher named Albert Biderman found that for 44 new “national goals” enunciated by the 1960 President’s Commission on National Goals (such as “increase the number of junior collegesy” ‘“in crease construction of low-income houses and apartments”), there were statistical records of past performance available in only 25 per cent of the cases...

...So too must entrepreneurial freedom...

...But they should have considerable power-enough that they don’t have to run every decision through a bureaucratic and congressional gauntlet, where it would likely be beaten to a pulp by an endless line of interest groups...

...Winston Smith, his chin nuzzled into his breast in an effort to escape the vile wind, slipped quickly through the glass doors of Victory Mansions...

...Consulting,” by the way, is a favorite means for members of the elite, especially professors, to augment their incomes...

...nothing against the state...

...Similarly, labor unions would not be free to bid up the wages of organized workers if that would result in inflation and a worsening of living standards for unorganized workers and people on fixed incomes...

...In an effort to quell the traditional fear that planning would lead to regimentation and loss of freedom, Humphrey and others promoting the bill habitually refer to their scheme as “democratic planning...

...What areas of the economy are starved of investment and what areas are choking from over-development...

...If bureaucracies have to justify to the planners every existing program and job in the federal government, there is some chance that big government could actually be reduced...

...In France, for example, postwar national planning was largely an extension of the economic methods of the Vichy government...

...He can say whether he likes the size of the city he lives in, and if not, why not...

...Since 1956, the Soviet planning process has been improved considerably...

...First, the unfortunate fact is that “democratic planning” in practice has usually ended up reinforcing corporate power and producing a version of the “corporatist” state...

...The French government historically has been highly centralized, with a national administrative elite educated at special, state-run schools...

...a statement of economic objectives...

...What would be the economic costs and benefits of reducing automobile production...

...As any reader of the newspapers knows, that plan was an almost laughable exercise in futility and frustration...

...Senator Hubert Humphrey, a planning booster, observes in horror and astonishment: “The United States government is the last bastion of unplanned activity in the world...

...The intended deception is that we accept the planners’ contention that increased central control of the economy can be gained without a loss of liberty by some individuals...

...We should...

...my emphasis) If by this “we ” Humphrey means the general public, he is deluding himself...

...Planners are no better qualified to decide this than anyone else...

...To state the matter boldly: A technical elite of planners comes up with what it believes to be sound answers to economic questions and then uses the machinery of the state to impose these solutions on an inevitably recalcitrant society...