‘Corona once again showed failure of central planning’

New Delhi: The Modi government's exercise of its monopoly controls on people, industries and services during the coronavirus pandemic was ought to fail as it happened with nationwide lockdowns, closures, travel bans and controls on the population. The result is for everyone to see that the coercive central planning only allowed the virus to spread.

In fact, all the sound reasons why central planning does not and cannot work in the case of the general economy apply equally in this case, along with a few other reasons which are specific to epidemics, says David Hart, Consulting Scholar of the American Institute for Economic Research.

Central Planners need to have an almost infinite amount of knowledge concerning consumer demand, the resources controlled by producers, the level of prices, production processes, and the infinite variables of time and place, which they can never and will never have, says Hart.

Central Planners of Public Health need to know who is sick, where they are, how sick they are, what strain of the virus they are suffering from, what are their other physical conditions, what medical facilities they have access to, how they got sick, how to stop the spread, and what happens to the virus if it is stopped, Hart suggests.

However, it was a pipedream of the original Central Planners that computers would solve the knowledge problem, or at least make a good fist of processing the huge amount of data that government had collected. This was never able to be put into practice because the amount of knowledge was too great (even for computers) and it kept changing faster than they could process it.

Given the national, regional, ethnic, behavioural, and climatic differences which exist Not surprising that the “one size fits all” solution hasn't worked. It is always the first choice of the Central Planners because it is the most manageable one. If one wants to argue that the future Central Planners would allow more local solutions to be tried and implemented ,then it would no longer be a “central” plan or a (central) government monopoly, depending on how granular you wanted it to be, he points out.

For a “government” solution to the problem to work, what is the optimum geographical area: the nation, the state, the region, the city (the big city or the small city?), the street or the household.

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