Don Boudreaux gets to the fundamentals of free markets
2 September 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Crusading for a national "energy plan" and upset that Holman Jenkins isn't on board, T. Boone Pickens asks rhetorically: "My father used to tell me that a fool with a plan is better than a genius with no plan. So I ask, what's Mr. Jenkins's plan?" (Letters, Sept. 2).
Contrary to Mr. Pickens's assumption, an economy is not simply a gigantic business firm. An economy is both incomprehensibly more complex than is even the largest multinational corporation, and it has no specific, overriding purpose comparable to a firm's goal of maximizing profits - a purpose by which the performance of each employee and each investment decision is relatively easy to evaluate. So while plans and some measure of central direction make sense for firms, comparable plans and direction for an economy are poison. They prevent the on-going decentralized experimentation from which spring not only progress that is unplanned, but progress whose details could not have been foreseen before they actually materialize.
The Soviet Union famously had plans for its economy; the United States did not. Which country was the fool?
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
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