Can Planning Be Democratic?

(This is a contributed summary of a talk given some time ago at Weir House by Mr. R. S. Parker, lecturer in Political Science, on the subject of planning. Limitations of space have forced us to cut the article considerably.)

I wanted to be given some insight into the problem and I was not disappointed. He asked us, first, to consider whether planning was superior to relatively unrestricted private enterprise from the economic point of view. Was economic planning which consists of the co-ordination of decisions and the employment of long-term projects for production better than laissez-faire capitalism? With the aid of some small knowledge of the incomparable Outlines of Economics, I was barely able to follow Mr. Parker's analysis of the main economic theories on the subject. From this analyeis we were left to draw the conclusion that the classical theory of equilibrium economics involving the inevitable trade cycle of booms and slumps had been exploded by Keynes. The latter showed that these phenomena are in fact due not so much to "balancing" forces as to the multifarious decisions of partially informed, and extremely prejudiced entrepreneurs. It follows that if these decisions were co-ordinated and planned, then the trade cycle would tend to flatten out while productive and even distributive efficiency would become greater.

Assuming the validity of Keynes' analysis, economic planning was desirable. Thus, the argument of Hayek and others that we must reject planning owing to its necessarily being full of imperfections, falls to the ground. Other things being equal, better to have planning than no planning. From this point Mr. Parker proceeded to open up the implications for democratic liberties. First of all we must jettison the "freedom" of every man to become an entrepreneur; for even that of present entrepreneurs would be seriously jeopardised if not extinguished altogether. In the second place, it seems that there will be a serious threat to the existence of the party system as we know it in New Zealand. Alternating party government tends to disrupt the continuity of planning. It has done so in the past as with public works undertakings. It is very likely to do so even more with greater projects. Some part of individual freedom must be sacrificed with the inevitable multiplication of forms requiring all manner of personal statistics.

This last threat might, perhaps, seem trivial yet not so the threat to the workers both individually and collectively. An intensification of industrial conscription might well seem intolerable in peace time. In fact the substitution of adequate incentives for compulsion could easily achieve the same results, thus giving the worker increased security of employment while leaving freedom to choose his occupation. But what shall be the future of collective action under economic planning? Would strikes become treasonable activity?

Not only the industrial workers but all citizens would be exposed to the danger of the planning experts becoming dictators. Even today some people believe that the civil service is tending to become bureaucratic in temper. To obviate this danger, Mr. Parker outlined the responsibility of the citizens in ensuring that the civil service administrators are trained ethically (to respect individual personality) as well as technically.

Finally, there were two other objections raised by the opponents of planning: first, that you could not get general agreement as to the direction of that planning; and second, Adam Smith's point, that it would be impossible for any "council or senate" to calculate the economic demands of an industrial society. To these objections Mr. Parker answered as follows: first, a majority decision on planning aims is quite possible, as evidenced by the agreement in New Zealand on a re-housing policy.

Second, industrial demands, it has been shown, are ascertainable, if we aim at specific and limited objectives. This is the crucial point and herein lies the guarantee of those liberties which lie outside the State's jurisdiction.

Reflecting on the address and discussion afterwards, it seemed that planning was economically desirable and at the same time quite compatible with democracy. The value of Mr. Parker's address lay in opening up some of the problems and in indirectly challenging us to get busy with them.—P.R.McK.

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