Is central planning of the economy the only moral way forward, given the Darwinian inequalities and predations of the unregulated marketplace? Advocates of government intervention, including many in the current administration, I suspect, would universally say yes. Such advocacy tends to rely heavily on moralistic arguments which pit a benign enlightened state against shadowy speculators and plutocrats.
In this intriguing post, however, the Sophistpundit argues the other way around: it’s central planning that is immoral, because it takes decision-making away from the only possible moral agent — the individual.
Sophistpundit’s subject is the Socialist Calculation debate, which I confess never to have heard of before, but which raged among economists and intellectuals for a considerable part of the twentieth century. The Calculation critique of socialism was formulated by Ludwig von Mises around 1920. Mises’ point was a simple one: even if central planners have absolute power and total obedience from the citizenry, they would still be unable to do their jobs because they lack the necessary information.
The allocation of resources in a community depends on human need. The aggregation of human needs is the price system, which provides the information according to which resources get allocated. Since central planning, by definition, would do away with such an arbitrary distribution of wealth, it would lack the price information with which to proceed. There is no alternative.
Go read the post to learn about the blows landed and received in the course of the debate. Great names were involved. Not being an economist, I’m far from qualified to judge the technical aspects of the dispute. Yet I am reminded, on reading Sophistpundit, that morality and economics have sprung from the same seed, and deal, from different perspectives, with the same questions.
Both ask how one should act in the radical ignorance of consequences that is the human condition. The problem of knowledge and right action concerns situations in which the available choices might be good/evil or profit/loss, or some unsavory combination. A handful of thinkers today — Thomas Sowell and N.N. Taleb come to mind — continue to transcend academic departments, and work out the consequences of our radical ignorance from its point of origin in the human predicament.
Less obviously, both morality and economics deal in tradeoffs. Both owe their significance to scarcity. In the case of morality, we can never attain all the good in the world, and so must choose one good over another, sometimes one evil over a lesser one. In the case of economics, of course, it’s goods rather than the good which are eternally scarce. Our choices determine which goods are highly valued.
I think this explains the Sophistpundit’s position. Every community must find ways to manage its scarcities, its imperfections, its all-too-human conflicts and dilemmas. These can be decided by power, top-down, or by aggregation, bottom-up: in plainer language, by coercion or free action. Central planning, lacking any guiding information, must rely on coercion and arbitrary choices: bad economics, to be sure, but also a negation of morality.