If you have been following the news about China’s economy, you know they are having serious problems.  

Growth has slowed to a crawl; economic growth in China is slowing, virtually to a dead stop.  The ruling Communist Party, which will do anything to prove their dictatorship is economically a good thing, is having to publicly revise and downsize their estimates for growth for the foreseeable future.  

Even so, their estimates are clearly far too optimistic – and they know it.  Recession – i.e., economic decline – is a very real probability.  The decline is so unavoidable that even the Party recognizes the situation; even the Party sees an inherent problem.

The cause is “central planning” itself.  Central planning cannot succeed.  Central planning failed in Soviet Russia.  It is failing in China.  Central planning inevitably leads to economic decline.

Why?  What is the flaw in central planning?

What can a population of millions do that central planning cannot?  

A population is a group of individuals each making decisions about what each needs to buy and how each wants to live.  

If he makes a mistake in his choice, he can change; he can choose an alternative.  A group of people is prone to some mistakes.  But on the whole each person in a group makes the best choice for himself, and makes ongoing corrections as quickly as the need becomes apparent.  Making the effort to improve is in his best interest.

His choices do not require a review by planners.  Making a change in his life does not require approval by a review board.  

Central planning assumes that some other human being knows better than you what you need.

Central planning, no matter how comprehensive, cannot hope to be able to choose the best course for each individual’s life.  Individuals do not have the same needs.  The right answer for one is likely to be wrong for another.  Uniformity assures failure.

Individual lives inherently must follow distinct, individual paths.

Each individual can make changes to correct or improve his life, as called for by events and circumstances.  In contrast, central planning is inherently dysfunctional.  The planners are not omnipresent; they are necessarily at a distance.  Their choices are necessarily slow in being made and clumsily applied.  

Planners cannot drive your car for you; they cannot move one foot in front of the other for you as you walk.  What makes anyone think that central planners can make the right choices in matters of even greater complexity?  

The central planning of Communist countries and any dictatorship are ultimately doomed to failure.  History is filled with demonstrations of that simple fact.  

Meanwhile the best standard of living and the most enjoyable way of life are prevalent in the countries with the most freedom. 

Freedom works.  Central planning does not.

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