5 Planning and Democracy

Adam Smith paraphrase:

The statesman who would attempt to direct private people in how they should employ their capital, would not only unnecessarily load himself with attention, but assume an authority which no council could be trusted with; such power would be the most dangerous in the hands of a man who had folly and presumption enough to believe he is fit to exercise it.

All collectivist systems want to organize society for a specific goal. Their main complaint against the liberal system is that it lacks conscious direction towards such an aim, and its activities are guided by the whims and fancies of irresponsible individuals. They refuse to recognize autonomous spheres in which the ends of the individual are supreme. This is the very meaning of totalitarian. The totality of society must be bent towards their aims.

The common purpose towards which we are supposed to working is called “the common good”, but it takes little reflection to understand that that is an empty term. The welfare of individuals, like their happiness, depends on many things and can’t be reduced to single purposes. What collectivism requires is a complete ethical code in which all the different human values are allotted their place. This has never been practicable. All the growth we’ve experienced lately in civilization has been due to the steady shrinking of the sphere where individuals are bound by fixed rules. But the essential point is that no such complete ethical code exists. Not only do we not possess such an all-inclusive scale of values, but it would be impossible for anyone to comprehend the infinite variety of different people competing for different resources and know how to attach different weights to them.

The basic fact is that it is impossible for anyone to have more than a very limited field of view.  

This is the fundamental fact on which individualism is based. It does not declare, as many think, that man ought to be egotistical or selfish. It starts from the fact that the limits of our imagination make it impossible to include in our scale of values more than a small slice of the needs of society.

The individualist concludes that individuals should be allowed, within defined limits, to follow their own values rather than someone else’s. Within these spheres, the individual’s system of ends should be supreme and not subjected to the dictation of others. It is this recognition of the individual as ultimate judge of his ends, the belief that as far as possible, his own views ought to govern his actions.  

This view doesn’t exclude social ends, but it limits such common actions to the instances where individual views coincide. These social ends are merely the identical ends of many individuals. Common actions is thus limited to the fields where people agree on common ends. But the limits of this sphere are determined by the extent to which the individuals agree. We can rely on voluntary agreement to guide the action of the state only so long as it is confined to spheres where agreement exists. We can’t extend this sphere indefinitely without stepping on individual freedom.

From this, it isn’t hard to see the consequences for democracy when a society embarks on a course of central planning. People may find wide agreement on the means of planning, but the precise ends to be achieved would be impossible to find agreement on. This would be like people committing to a journey without knowing where they are going to go. The result will be that all will make a journey where most don’t want to go.

In a planned system, collective action can’t be restricted to areas where we find universal agreement, but we are forced to produce agreement on everything in order to take action at all.  

The problem isn’t with individual representatives or the institutions per se, the problem is the task itself: produce agreement on everything- a unified plan of action and the consequent direction of resources towards it.

Nor can a coherent plan be achieved by breaking it up into parts and voting on particular issues. A unified plan that deserves its name must be unified, and drawing up a plan according to voting about every detail is not possible. The essence of the problem is that different people have different needs, and any plan is going to involve making a choice to favor one group and disfavor others. It is inevitable that whoever makes the decision imposes his value on the rest.

Agreement that planning is necessary, combined with the inability of democratic institutions to produce a plan, leads to stronger demands for some single individual to rise up and get things done.

Democracy simply can’t produce central planning. It is the price of democracy that the possibilities of conscious control are relegated to those fields where true agreement exists, and that in some fields things must be left to chance.

The great accomplishment of the liberal creed was that it reduced the range of subjects on which agreement was necessary to one on which it was likely to exist in a society of free men. It is now often said that democracy will not tolerate capitalism. But if capitalism means a competitive system based on the free disposal over private property, it is far more important to realize that ONLY in this system is democracy possible. When it becomes dominated by a collectivist creed, democracy will destroy itself.