Here’s why it’s IMPOSSIBLE to CENTRALLY PLAN an economy – or even a very simple, small economy. The advocates of central planning, who strongly believe their overpriced and/or subsidized college diploma could repeal the fundamental laws of economics and the law of supply and demand, are CLINICALLY INSANE. Well, they’re empty elitists who want to rule other people’s lives, but it’s safer and more appropriate to call them clinically insane because that’s what they are.
Here’s an excerpt of a very informative article written by M. Northrup Buechner, associate professor of economics at St. John’s University, that tackles how the economy works:
Here is the fundamental problem of economics: Every consumer good that you buy reaches you through the cooperation of literally millions of people. The six-pack of beer that a man purchases at the corner deli was delivered to the deli by a wholesaler, who gets the beers he delivers from several different beer producers. To produce the beer, the manufacturers need hops and barley which they buy from grain elevators or farmers. To grow the hops, the farmers need pesticide and fertilizer which are produced by other businesses. To manufacture beer, the producer needs cans which he buys from, let us say, American Can. To manufacture cans, American Can needs aluminum which it buys from Reynolds or Kaiser or Alcoa. To produce aluminum, the aluminum companies need bauxite and electricity, the two raw materials of aluminum. Bauxite has to be mined for which heavy equipment is required, like steam shovels, bulldozers, and trucks, which are purchased from still other companies. If we were able to trace back through the economy all the businesses and all the workers who directly and indirectlyparticipated in the provision of that beer (or Coke or milk or hamburger or golf clubs), we would find that it involved at least half of the economy and probably much more: that is, half the labor force, half the businesses, half the capital value of the economy.
What makes this almost miraculous is that of all the millions of men and women whose work jointly puts beer in the deli, the only one of them who gives a thought to putting beer in the deli is the wholesale. All of them (including the wholesaler) are concerned with nothing but their own personal financial interest. In their work, they are focused exclusively on earning the money necessary to support themselves and those they love, and to achieve other goals of their own to which money is a means. Yet somehow, the actions of all these millions of human beings are integrated into what is normally a smoothly functioning unit that puts beer where the man wants it, when he wants it, and as much as he wants. If one steps back for a minute and thinks about it, that is an amazing, unbelievable phenomenon—a phenomenon which we live with and take for granted every day and on which our lives depend. How is it possible?
The answer is prices. It is prices that integrate the economy into a unit. It is prices that reconcile the apparently opposing interests of the members of an economy. It is prices that make everyone’s desires consistent with one another so, for example, a furrier wants to give a woman the exact fur coat she wants to possess.