June 17, 2004

Arnold Kling -- the Left marches on. "The idea that government planning of the economy is rational has been dealt a series of mortal blows, including:

-- the failure of wage-price controls in the United States and other countries in the 1970's
-- the poor performance of state-run enterprises in Europe and the success of Margaret Thatcher's privatization initiative in the United Kingdom in the 1980's
-- Japan's "lost decade" of the 1990's, which ended the last myth of rational central planning, as Japanese industrial policy foundered in stagnation
-- the ability of computers on the Internet to self-organize in the 1990's, demonstrating that Friedrich Hayek's concept of "spontaneous order" is valid. It was Hayek who argued strenuously that the market's ability to process local information makes it more efficient than central planning.

With all this evidence in favor of markets and decentralization, the good news is that much of the Left now recognizes the efficiency of markets and is in favor of them, with some exceptions. The bad news is that the exceptions include the sectors of education, health care, and retirement security, which have been and are likely to continue to be increasing as a share of GDP. Although all of the arguments against central planning apply to government provision of these services, the Left employs its Compassion weapon there, while using the Corruption weapon to fight a rearguard action against markets everywhere else .. ". MORE "The Left's Tactical Weapons" -- Arnold Kling. Posted by Greg Ransom