Stimulus Waste Panel Cancels Ritz-Carlton Meeting.

Boyes warns of confidence in central planning. It is indeed a paradox that as individuals we engage in planning throughout our lives. This planning is constantly evaluated and adjusted, at least to the extent that individuals experience the consequences of these plans. Thus, planning at the individual level can reflect liberty and responsibility.

Contrast this individual planning with the central planning in China that Boyes uses to illustrate his analysis of potential consequences of central planning. This central planning generates alternative incentives for participants in a centrally planned society. These incentives often lead away from feedback loops and often obfuscate the consequences of central planning. And, as students of Tullock and Buchanann might anticipate, the process of central planning can lead to concentrated benefits or costs and diffused costs or benefits. This clearly can led to actions by the planner and a centrally planned economy that are short and long term negative sum.

In discussing factor mobility in my class yesterday the students seemed to arrive at an a ha moment on this topic. The concentration of perceived benefits from limiting factor mobility in the short run might well lead to significant costs in terms of foregone opportunities for future generations. Thus, what might seem to be a zero or positive sum game might well be negative sum game. This type of discussion/analysis is exemplified in the current debate over proposed central plans to address climate change.

This was an amusing local story - a cautionary tale that seems to evoke for me the work of Harold Jacobson:

A panel advising the independent agency charged with rooting out waste, fraud and abuse in the stimulus plan announced Friday night that it had pulled the plug on a public meeting which was to have taken place at the Ritz-Carlton in Phoenix, Arizona.

This example does not illustrate stupidity or vice or criminal behavior - rather this is the inevitable outcome of an institutional arrangement that incentivizes top down action. Reading the story also evokes Hayek's Road to Serfdom.


http://blogs.wsj.com/washwire/2010/11/12/stimulus-waste-panel-cancels-ritz-carlton-meeting/