Sunday, July 10, 2016

Brexit Shows 
Why Central Planning Won't Work
Mises Institute posted essay explains how central planning, as in central banking for example, fails because predicting the future is impossible, especially if the prediction is not based on human nature .. "The Brexit vote is just one more example of this very basic fact of human existence. And yet, as markets have adjusted to the Brexit vote in recent weeks, governments everywhere are vowing even more intervention in the financial and economic affairs of their own countries, and even of the entire world. The failure to predict the future on Brexit means, for central planners, that there is only one solution to the chaos: even more prediction. As Ludwig von Mises demonstrated in Human Action, it isn’t that economic interventionism and central planning might not work, it’s that they cannot work. Why? Because we simply do not have the ability to predict human action in the future, either in the immediate future, or in a more intermediate future. Models, polls, booking odds, forecasts, punditry, data-crunching — all of it proves worthless in the actual event. Human beings each act in their own way, and for their own reasons. Their preferences can’t be determined by anyone else, and the ways in which they will respond to things cannot possibly be predicted with certainty. The Brexit vote was a stunning rebuke to prognosticators everywhere, but government bankers are now holding emergency policy sessions to hammer out ways to interfere with individual human action ever more invasively. The EU leaders themselves, who might have taken this opportunity to reflect on why people in the United Kingdom were so anxious to leave their company, are planning to consolidate their union into a hulking Leviathan 'superstate." In the minds of interventionists, the cure for state interference is always more intervention. The cure for central planning is always more planning. The cure for budget deficits is more spending. The cure for inflation and currency manipulation is to print more money. The way to get out of a deep hole is to increase the rate of one’s digging. After the Brexit shakeup, the only thing that does seem certain about the future is that central planners really will never learn."
LINK HERE to the essay

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