When Planning Creates Chaos

All people do some type of planning, which is simply looking toward the future to determine the steps needed to achieve objectives. Employment is one of the means available. Workers choose to trade their time and labor because it enables them to better satisfy their needs and pursue their goals. Business owners and managers plan for their organizations. They hire employees and purchase materials to combine in ways that give a particular result. Successful businesses will have some type of system in place that accomplishes the objectives of the owners, systems that require planning and foresight.

Large organizations, business or otherwise, can plan for many locations, coordinating the activities of thousands of people because, as non-compulsory entities, the people who join agree to pursue the objectives of the organization according to the terms of employment or membership, voluntarily subordinating a portion of their own time and plans to those of the organization.

We often associate a lack of planning with disorganization and chaos, and it certainly can lead to that, but a high level of order is possible without planning. The structure of language emerges over time, not because of planning, but because the rules that work are passed on, while those that don’t are discarded. Human societies evolved over thousands of years because basic rules of human interaction, such as respecting the life and property of others, have been found to generate progress, and individuals interact with others based on those simple rules for cooperation. Each person has his own set of plans, hopes, expectations and assumptions about reality, and takes actions intended to bring progress in his own life. Because it is a complex, dynamic system, order emerges in society from the interactions within it.

At a national level, politicians and many economists portray economic planning as an absolute necessity because so many people are involved and society is so complex. They believe that such a jumble of activity requires intelligent control. An interesting phenomenon occurs at that scale, however. The more central planning at a national level, the more chaos and discord that emerges, with the planned economies of the former Soviet Union and other totalitarian countries serving as evidence.

There is a good reason for that breakdown. A plan coordinates the use of resources toward the attainment of objectives, but the plan itself assumes that everyone has the same objectives and will work toward attaining them. That can work on a national level in specific circumstances when the population is united around a common objective, at least for a short time. War is one such example, with massive propaganda campaigns being used to galvanize public opinion. The second world war is cited as an example of the success of central planning, when the resources of the nation were dedicated to winning. People were generally willing to make sacrifices because they believed that winning the war was crucial to their well-being. That only works for so long, however. People will not continue to subordinate their lives and plans forever. War-fatigue sets in because personal growth and achievement are necessary for happiness and progress.

When centralized plans thwart the plans of individuals, unintended consequences arise, because those individuals will find other ways to fulfill their needs and desires. Black markets are the direct result of political impediments to voluntary commerce. Economic bubbles and distortions will always accompany political and monetary intervention in markets. Attempts to plan and control complex dynamic systems always cause some level of chaos, simply because they break the rules of the system, the simple rules from which order is able to emerge without planning.

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