Good morning.
Saturday in Whitewater will be sunny with a high of 62. Sunrise is 5:39 AM and sunset 8:02 PM for 14h 22m 59s of daytime. The moon is a waxing crescent with 35.4% of its visible disk illuminated.
On this day in 1992, Michigan ratifies a 203-year-old proposed amendment to the United States Constitution making the 27th Amendment law. This amendment bars the U.S. Congress from giving itself a mid-term pay raise.
Planning of a basic kind is necessary for most activity, and assuredly for large-scale projects. Nonetheless, central planning (from government or from the direction of a single, private individual) presents a knowledge problem that leaves centrally-planned projects at risk of failure. Hayek (as cited in Israel M. Kirzner’s excellent Economic Planning and the Knowledge Problem):
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess, the economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
See Hayek, The Use of Knowledge in Society, American Economic Review. XXXV, No. 4. pp. 519-30 (1945).
Henry Ford’s planned community (‘Fordlandia’) in the Amazon (yes, the Amazon) is an example of failed central planning (of one wealthy man trying by his own lights to create an entire community):
It is the interaction and transaction among thousands of private people that assures an enduring basis for community. The central planners of government or corporations can begin a community, but their central planning will not sustain a community.
Russian Oligarch’s Superyacht Seized in Fiji: