Pencil Points: Why a Command Economy is Doomed to Failure

At Reason, John Stossel explains “Spontaneous Order” and “why the ‘best and brightest’ can’t plan the economy:”

You are our Ruler. An entrepreneur tells you he wants to create something he calls a “skating rink.” Young and old will strap blades to their feet and speed through an oval arena, weaving patterns as moods strike them.

You’d probably say, “We need regulation—skating stoplights, speed limits, turn signals—and a rink director to police the skaters. You can’t expect skaters to navigate the rink on their own.”

And yet they do. They spontaneously create their own order.

At last month’s State of the Union, President Obama said America needs more passenger trains. How does he know? For years, politicians promised that more of us will want to commute by train, but it doesn’t happen. People like their cars. Some subsidized trains cost so much per commuter that it would be cheaper to buy them taxi rides.

The grand schemes of the politicians fail and fail again.

By contrast, the private sector, despite harassment from government, gives us better stuff for less money—without central planning. It’s called a spontaneous order.

Lawrence Reed, of the Foundation for Economic Education, explains it this way:

“Spontaneous order is what happens when you leave people alone—when entrepreneurs … see the desires of people … and then provide for them.

“They respond to market signals, to prices. Prices tell them what’s needed and how urgently and where. And it’s infinitely better and more productive than relying on a handful of elites in some distant bureaucracy.”

Read the whole thing, which ends with Stossel quoting Leonard Read’s famous “I, Pencil” essay, which the late Milton Friedman brilliantly encapsulated here:

[youtube 4ERbC7JyCfU]

(H/T: Maggie’s Farm)