Mises Daily

The Problem of Central Planning

The idea of central planning seems, at first sight, so reasonable that it is hard to see why any intelligent person would oppose it. For one thing, it appears to be a mere extension of individual planning, which all of us practice. Every intelligent person engages in planning. A thoughtful man plans his day, his week, his year, his life work.

The unplanned life, by which is meant passivity at the mercy of events, is bound to be one of confusion. Man is a creature who needs to assess his powers, to envisage dangers, to employ his available time and resources in a careful, rather than a haphazard way. It is not too much of a distortion to render the famous remark of Socrates in the form: “The unplanned life is not worth living.”

There is no doubt that there is today general acceptance of the idea that planning may be extended validly from the experience of individuals to the experience of organized groups. That this is true is attested by the appearance of a plethora of five- and ten-year plans on the part of colleges, churches, and business enterprises. All recognize the inevitability of change, but since all realize that change may take place in more than one direction, a strong effort is made to determine the direction of change in the hope that it will constitute progress.

As soon as we recognize the crucial difference between progress and mere change, efforts at central planning seem to be required. We know that change is inevitable, but because we also know that change may actually represent decline, we are driven to do something about it, and central planning is the popular answer.

Nearly all who have known anything of the philosophy of the late Professor Whitehead have accepted his teaching when he said, “Advance or decadence are the only choices offered to mankind.” Whitehead defended his dictum, in part, by his famous doctrine of process. “Thus,” he wrote,

each actual thing is only to be understood in terms of its becoming and perishing. There is no halt in which the actuality is just its static self, accidentally played upon by qualifications derived from the shift of circumstances.1

Because our world is always in process, and because the direction may be downward or upward, we dare not proceed without trying to do something about it. All this is agreed, though the precise character of our response is open to serious question.

Though all of us agree about the need of attention to the direction of change and of individual planning of our lives, the word “planning” is highly ambiguous. Planning for another involves factors which are totally absent in planning for one’s self. I can, for example, operate more adequately on the basis of foresight in regard to my own life than is possible when I am planning the life of another, because I have inside information about my own intentions, while I do not have such information about the intentions of any other person.

Furthermore, the life of the individual is organic, while that of the group, the city, or the state, is not organic except in a purely figurative sense. In state planning the initiative is taken by government officials, whereas in individual planning the initiative and the operation have the same locus. This may turn out, upon analysis, to constitute a significant difference.

The relatively uncritical belief in central planning has been shown in a great variety of ways. The British government, for example, recognizing the inevitability of the population and geographical growth of Greater London, now plans and supervises the establishment of new satellite towns a few miles beyond the old population limits. The experience gained from the development of Letchworth and Welwyn Garden City has helped greatly in this new venture.

When the first “Garden Cities” were established, an overall plan was made at the start, with strict zoning in advance of construction, rather than after construction. The hope was, thereby, to avoid the familiar evils of congested centers and unlimited rural sprawl. The former was avoided by a planned civic center, with much open space, while the latter was avoided by a definite limitation on total size as well as by the establishment of a permanent “green belt” within easy walking distance of all residents.

The conviction of the founders of these cities was that haphazard development leads inevitably to crowding and thus to the existence of slums and the human ills they foster. This kind of planning has had some success, though some of the people supposedly benefited do not appreciate the planning which has been done for them, and a good many actually long for their old, unplanned lives.

Another vivid illustration of the present popularity of planning is provided by our colleges. Once, not long ago, colleges and universities proceeded with the business at hand a step at a time, without any conscious overall vision. Little thought was given to what the institutions would or should be in 10 years or 50 years.

As money for buildings was available, buildings were erected, often without any attempt to fit them into a comprehensive architectural plan and often with marked architectural confusion. The ordinary campus is thus an object lesson in the history of American architecture. For the most part, the central architectural planning, so strikingly illustrated by the West Campus at Duke University, is a strictly modern phase of academic life. Now nearly all institutions of higher learning have “plans.” These involve the probable number of students, the character of the educational opportunities offered, the amount of money needed, and the particular image which the institution is expected to project on the world. The plan of most seems to involve getting just a little larger than they are now.

At the present time, the American Association of Colleges, through a grant from the Eli Lilly Endowment, of Indianapolis, employs three men, all of them former college presidents, to spend their entire time in going from campus to campus in order to encourage wise planning for the future. In many ways this is producing improvement in our institutions of higher learning. Buildings no longer appear haphazardly but are frequently more pleasing in appearance, because they are integrated into a preconceived plan of development. So important is this aspect of our academic life that, in most of our institutions, the money-raising department is often called the office of development, and here, development means planning.

Many are beginning to believe that we must try to plot the directions of our national future. President Eisenhower gave significant encouragement to this effort by his appointment of a group of distinguished men who were asked to think carefully on what the future of America ought to be. A leader of this group, Henry M. Wriston, is now the president of the American Assembly, with headquarters at Columbia University. In 1960, as the seventh decade of our century began, Life magazine presented a series of articles on “The National Purpose,” with contributions from a variety of thinkers, including Adlai Stevenson, Archibald MacLeish, John Gardner, and Walter Lippmann. Most Americans are determined that they will not permit the wanton destruction of our natural resources or the continuation of depressed economic conditions in particular areas, such as West Virginia.

“Planning for another involves factors which are totally absent in planning for one’s self. I can, for example, operate more adequately on the basis of foresight in regard to my own life than is possible when I am planning the life of another, because I have inside information about my own intentions, while I do not have such information about the intentions of any other person. “

While central planning is not as clearly developed in the total life of western nations as it is in regard to individual towns and colleges, there is no doubt this is the direction in which we are moving, not merely in avowedly socialist states, but in the United States of America as well. Illustrations on a national scale are easily available.

One is agricultural planning, according to which farmers are no longer free to plant and harvest as they please. Many are convinced that, apart from fairly rigid and explicit national planning of crops, there is no possible solution to the pressing problem of surplus commodities. Another illustration is provided by the magnificent and expensive superhighways being planned on a national scale and planned in such detail that commercial development along them is severely limited. This is a radical and perhaps beneficent departure from our earlier “stringtown” development.2

Any reasonably sophisticated person is aware of the fact that what sets out to be total planning in intention is seldom total in practice. It is well known that the various Russian plans concerning agriculture have come far from attaining the level of success that was confidently expected. The farmers did not react like puppets.

Before we take too much satisfaction in this, we need to face the fact that the American efforts to curtail agricultural production have not been more successful than are the Russian efforts to increase production. We cut down, by means of the soil bank, on land which can be used for the production of grain or meat, but many farmers merely put their poorer land into the soil bank and, by using more fertilizer on the rest, produce as much as they produced before on more land. Thus, the alarming and costly surplus continues.

Though central planning seems to be an accepted part of our contemporary culture, that is not the end of the matter. We must be sufficiently critical to realize that central planning involves serious problems, and that these problems are primarily intellectual in nature. While some planning is intrinsic to the human undertaking, we need to ask carefully what kind of planning is justified.

Perhaps the issues involved in individual planning are radically different from those involved in state planning. Is planning for others comparable to planning for oneself? Who is worthy of the task of planning the lives of others? These questions require careful consideration, but, first, we must look at the historical development which culminates in one vivid contemporary experiment.


The history of central planning, by which we mean that which influences the lives of political groups, seems to be as old as serious human thought. For the Greek thinkers, it was a significant part of political science and one of the chief reasons for the practical importance of that science. Plato, not only in the Republic, but even more elaborately in the Laws, set up possible plans which would affect all the inhabitants of the city-state. That Aristotle went almost as far is indicated by the following:

It is political science that prescribes what subjects are to be taught in a state, which of these the different sections of the population are to learn, and up to what point. We see also that the faculties which are most highly regarded come under this science: for example, the art of war, the management of property, the ability to state a case. Since, therefore, politics makes use of the other practical sciences, and lays it down beside what we must do and what we must not do, its end must include theirs. And that end, in politics as well as in ethics, can only be the good for man.3

Almost all students, when they first encounter Plato’s Republic, are struck by similarities between the teaching involved in this great work and the teachings of contemporary socialism or even communism. It is not only that they note the economic sharing of property on the part of the Guardians; they note, too, the vast and intricate planning which the Guardians undertake for the welfare of those who are not Guardians. And, in a sense, the students are right. There are similarities, though there are also crucial differences, between the Platonic and the communist dreams of society. The deepest similarity is that of the acceptance of planning of total lives.

Socialism is intrinsically a theory of a planned society, the relative rejection of private property being only one feature in a larger plan.4 Indeed, it has been recognized that, since “socialism” has an evil connotation in many minds, acceptance of socialist ideas may be surreptitiously encouraged by referring to them as the ideas of planning, for planning sounds acceptable to almost everyone. There is wide acceptance of the dictum of George Bernard Shaw when he said, “But you cannot alter anything unless you know what you want to alter it to.”5 It seems obvious to many that detailed planning of the total life, including the economic life, is the only alternative to naturalistic chaos.

What we call communism has been highly conscious of its need to reject the emphasis on spontaneity, which its critics are always advocating. “The theory of worshipping spontaneity,” wrote Stalin, “is decidedly opposed to giving the spontaneous movement a politically conscious, planned character.”

The considerable success which the Soviet propagandists had in the fourth decade of our century in winning converts in the United States, was attributable, in large measure, to the emphasis on planning as a valid idea. Very attractive books were made available, in the English language and at slight cost, explaining the character of the First Five-Year Plan and showing, in simple terms, the contrast between life so organized and one in which economic matters are allowed to take their course blindly. The inference was that lack of planning would be bound to lead to excesses of boom and depression, the actual depression seeming to give factual support to this claim. Many became communist sympathizers or actual party members because the alternatives of an ordered and an unordered society seemed to exhaust the possibilities.

What has developed in what is now orthodox Marxism-Leninism is deliberate and total planning of the total life of a people. That this is far more than an economic system or a doctrine of state ownership of the means of production is obvious when we see the way in which the system embraces art, music, education, listening to broadcasts, science, and much more. It is the concept of total planning that necessitates the role of the Communist Party, which is the general staff of the movement.

The entire endeavor is envisioned as a military campaign, and nobody imagines that a military campaign can be well conducted without careful planning on the part of a competent minority. That is why the present membership of the party amounts to a very small percentage of the total Soviet population. The central idea here is that of the vanguard.

What we call communism has been highly conscious of its need to reject the emphasis on spontaneity, which its critics are always advocating. “The theory of worshipping spontaneity,” wrote Stalin, “is decidedly opposed to giving the spontaneous movement a politically conscious, planned character.”6 It is only in the light of the “politically conscious, planned character” of the Movement that we can understand the famous prediction of [Friedrich] Engels about the withering away of the state. Lenin devoted many pages to trying to explain what this meant. The crucial passage, in the words of Engels, regarding the state is:

When at last it becomes the real representative of the whole of society, it renders itself unnecessary. As soon as there is no longer any social class to be held in subjection; as soon as class rule, and the individual struggle for existence based upon our present anarchy in production, with the collisions and excesses arising from these, are removed, nothing more remains to be repressed, and a special repressive force, a state, is no longer necessary. The first act by virtue of which the state really constitutes itself the representative of the whole of society — the taking possession of the means of production in the name of society — this is, at the same time, its last independent act as a state. State interference in social relations becomes, in one domain after another, superfluous, and then withers away of itself. The government of persons is replaced by the administration of things and by the management of the processes of production. The state is not “abolished.” It withers away. This gives the measure of the value of the phrase “a free people’s state,” which can justifiably be used at times by agitators, but which is, in the final analysis, scientifically inadequate. It is on this basis that we should also evaluate the demands of the so-called anarchists for the immediate abolition of the state.

Lenin was very clear in his own mind that the state could not wither away in every sense of the word. There might be an end to parliamentary bodies and a great diminution of police activities, once the total planned society was operating, but there would still be a large bureaucracy. The aim, Lenin said, was “to organize the whole national economy on the lines of the postal service.” This was, briefly, his fundamental answer to the question “What will replace the smashed state machine?”

Lenin’s answer seemed to him to be merely an extension of the conception of Marx who, in the Communist Manifesto, had said that the smashed state machine was to be replaced by “the proletariat organized as the ruling class.” The withering of the state, in short, is not expected to mean the abolition of planning, but rather the complete victory of planning, and the supreme importance of those who, by vocation, are the central planners. Lenin called this “a gigantic replacement of certain institutions by other institutions of a fundamentally different order.” The transformation predicted by Engels, said Lenin, is not a transformation from a state to no state, but rather from a “bourgeois democracy” to a “proletarian democracy,” from the state to something which is effective in control, but is “no longer really the state.”7

The theory of the withering away of the state is one which it is easy to misunderstand. The state withers away when planning succeeds, says Lenin, not in the sense that there is no longer a large and powerful central organization, but in the sense that,

since the majority of the people itself suppresses its oppressors, a “special force” for suppression is no longer necessary! In this sense the state begins to wither away.8

As a matter of fact, of course, all state systems, whether in Russia or elsewhere, tend to become larger. The number of employees is almost never reduced.

It is only when these general ideas about total planning are kept in mind that we can understand how the Soviet system operates in regard to education. Education, particularly scientific education, is highly valued, but, in the overall plan, it is severely and rigorously rationed. Soviet citizens are not equal and are not meant to be equal in development or in rewards, though it is alleged that there is equality of opportunity.

The educational process is intended to be one of self-selection, not dissimilar to that envisaged in Plato’s Republic. But the central planning boards decide how many, in any given year, will be permitted to engage in university studies. Professor Kulski explains carefully why this limitation is enforced.

As Khrushchev often remarked, Soviet society shares with other European nations a certain contempt for manual labor and a high regard for mental work. Yet the Soviet government could not accommodate all the graduates on the campuses for good reasons: Higher education had to be selective, and to limit the number of its students in proportion to available faculty and facilities. Every society must channel a greater proportion of its young manpower to factories and agriculture.

Moreover, a universal, secondary education delayed the coming of young people to the labor market; they usually graduated at the age of seventeen and started gainful work after their service in the Armed Forces. Yet one of the main problems in a nationalized economy is the amount of available manpower, for it fixes the upper limits of plan for economic expansion.9

The potential efficiency of such complete planning cannot be denied. Thus, in the present seven-year plan, there is the intention of setting up boarding schools for at least two million students. Removed from the influences of their parents, the minds of these students can be molded more perfectly by state teachers and by youth organizations. In noncommunist states such undertakings are difficult to put into effect, but, when planning is total, there is no gap between intention and attempted execution. This is inevitable when the government is the sole employer “who determines the kind of job that a citizen performs as well as his salary or wages.” All lives are planned implicitly, including those of poets and musicians. This is so because the government can decide whether or not a writer or the composer is to have his work published.10

It is easy to see, then, that the Soviet system represents a far more radical innovation than it would if it were concerned merely with ownership. The nationalization of the means of production involves a radical shift in the power structure, especially in the eminence accorded to the central planning bodies. The system enables the party machine to have a monopoly of power, for they have all but the legal attributes of ownership. Above all, it allows a few who are the new elite to seek to control the total lives of the masses. It is this gigantic object lesson which brings the intellectual issues into focus.

  • 1Alfred North Whitehead, Adventures of Ideas (New York: The Macmillan Company, 1933), p. 354.
  • 2The planning of the great highways has been far from perfect. Superfluous cloverleaf constructions have been ordered at fantastic expense, and there has been much corruption. Some of the greatest mistakes arise because the planners are too removed from the scene of operation.
  • 3Aristotle, Nicomachean Ethics, book I, chap. 2.
  • 4Early Christian writers, such as Ambrose, in the 4th century, advocated a communist economic system, but they were not communist in the contemporary sense, since total planning was not envisaged. See A. O. Lovejoy, Essays in the History of Ideas (Baltimore: The Johns Hopkins Press, 1948), p. 302.
  • 5George Bernard Shaw, The Intelligent Woman’s Guide to Socialism and Capitalism (Garden City, New York: Garden City Publishing Company, 1928), p. 8.
  • 6The Foundations of Leninism. This work appeared first in Pravda in April and May, 1924, and continued to be an official ideological guide throughout the Stalin years.
  • 7See Vladimir Lenin, State and Revolution; The Marxist Teaching on the State and the Tasks of the Proletariat in the Revolution; and Arthur P. Mendel, ed., Essential Works of Marxism, (New York: Bantam Books, 1961), p. 133.
  • 8Ibid., p. 133.
  • 9Harold Laswell and Harlan Cleveland, eds., The Ethic of Power, (New York: Harper and Bros., 1962), p. 264.
  • 10Ibid., p. 268.
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