If ever the history of economic hallucinations comes to be written, the idea that governments possess the knowledge and power positively to determine the rate of economic growth through the technique of central economic planning will be revealed as one of the most widespread, tenacious and harmful of errors. In the long term, experience will doubtless make this clear; in the interim, the damage likely to be done by it may be considerable, depending upon the scale on which the fallacy gains a hold over public opinion and the persistency of the designers and operators of the economic plan in the face of failure. Some tragic cases immediately come to mind. The present parlous economic condition of India is attributable in no small degree to government planning which has led to massive misdirection of resources into grandiose schemes for capital investment, to the relative neglect of the primary task of food production, to the erosion of international reserves and the dependance of India each year upon the charitable whims of the West. In Russia, such planning has, since 1917, been enforced at untold cost in the shape of human freedom and now, after half a century of economic vicissitudes, Russia is generally recognised as a country still of low general standards of living.
KeywordsCentral Planning Private Enterprise Price System Economic Planning International Reserve
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