This note is a part of my Zettelkasten. What is below might not be complete or accurate. It is also likely to change often.
20th July, 2020

Flaws of Central Planning

Communism and other leftist movements present Common Ownership and Central Planning as the solution to Capitalism's generation of unfair inequality and prevention of collective action.

Central planning relies on the actual humans running the government to be competent, benevolent, ideologically neutral and committed to public good. This is almost never the case.

  • People who make the allocative decisions are not equipped to make the best allocative decisions
  • People's valuations and preferences are private and constantly changing. A market allows for people to exercise their choices and allows producers to percieve their choices through the pricing mechanism.
  • Central planning makes decisions which result in misallocation of resources - goods nobody wants
  • Most people in power are corrupt, arbitrary, incompetent and usually, distrusted. They abuse the system for their own gain.