Today’s installment of why Hayek was right. You know, that bit in the Nobel Lecture, The Pretence of Knowledge.
The point being made was that people really will start to think – even after all that evidence of how scientific socialism didn’t work – that they would be able to know enough about the world to plan it. Sure, some things just do have to be planned but we need to be modest about our ability to do so. We don;t have a calculating engine capable of handling the economy other than the economy itself. We also don’t have and cannot have enough information to be able to get around this either.
At which point a nice little example of this:
The analysis also reveals the startling extent to which official statistics have underestimated EU migration to the UK in the last decade.
So far, a combined total of 1,116,000 Bulgarians and Romanians have had their applications approved, more than double the latest ONS figure for the entire population of Bulgarians and Romanians in the country, which was thought to stand at 523,000.
Ignorance about the true numbers over the last decade made planning public services near impossible, according to Professor Alan Manning, chief of the government’s Migration Advisory Committee until 2020.
The full number of unknowns to be here seems to be of the order of 2 to 2.5 million.
OK, sure, that makes planning government services a bit difficult. But think on a bit. Imagine we had someone trying to plan the food supply. That question the Soviet bloke asked in 1990 “Who is in charge of the bread supply for London?”.
OK, so we’ve an office, a bureaucracy, that plans the food supply. Who grows what, where, then the prices it will be sold at and in which location. GOSPlan that is, for food. And don’t you dare believe that there aren’t people out there who think this would be a good idea. I recall one young shaver insisting that the solution to Venezuela’s planning caused food problems was that the government should really take it over and control all of the food supply system.
OK, so what happens? The food supply system plans to provide food for 2 million people less than there actually are. This not being likely to work out well.
Or, the larger point perhaps. We don’t – or at least didn’t – know how may people there were in the country. Thus planning in any detail is going to go more than a bit awry, isn’t it?