The Public Accounts Committee has told is that the government has been very naughty. There has been no economic planning for the outbreak of something like an influenza epidemic:
There was an “astonishing” failure by government to plan for the economic impact of a possible flu-like pandemic, parliament’s financial watchdog has said.
MPs on the cross-party public accounts committee concluded that government schemes were drawn up “on the hoof” in mid-March by Rishi Sunak’s Treasury, weeks after the first case of coronavirus was detected in the UK. The delay risked leaving sectors of the UK economy behind, according to a report published on Thursday.
Well, yes. One good answer to the accusation is that we have influenza pandemics every winter – a reasonably normal year will have tens of thousands dying of it – and we don’t make an economic plan for the event. People die, funerals are held and that’s that.
That though isn’t what the actual accusation is. Rather, there was no economic planning for an event like the coronavirus. To which the better answer is that yes, planning is difficult. Because there are always these events dear boy, events.
Which is why a planned economy doesn’t work – events.
Take just instances from today’s papers:
To survive, shops in Britain will have to move to where the commuters are now
OK, yes, working patterns are likely to change now that we all realise we can work effectively from home. We don’t know quite how much or exactly where but change will indeed happen.
Britain’s biggest bus operator has warned that passenger numbers may not recover after the Covid-19 outbreak because the acceleration of working from home, internet shopping and telemedicine have changed travel patterns forever.
All of that seems likely as well. We’ve got to think about transport as well as just shops.
The home-working revolution will derail the middle-class gravy train
Complacent office workers don’t realise that their jobs can now be done by anyone, anywhere in the world
That also seems likely. If you don’t need to physically be in an office in London in order to diagnose institutional racism then you most likely to don’t need to be in England to do so either. Indeed this very piece itself is being brought to you by the Algarve. Things really are going to change.
The planners’ problem being that we know these things are going to change. We also know that they all interact. Where people work, how they travel to it – or don’t – where and how they shop and consume as they do or don’t are connected. They’re in fact simply aspects of exactly the same process.
Further, while we know they’re all going to happen we’ve no damn clue by how much.
Does London need one less train a day in and out from West Ruislip, Pret a Manger to prepare 300 fewer sandwiches across the estate and one neartheofficedrycleaner close and supply something else? Or are we talking about making the office space of central London a howling wasteland forevermore? Buggered if I know and the point is that nor does anyone else. No one has the slightest clue.
It’s therefore not something we can plan for. We need knowledge, certainty, in order to be able to plan. We need x transport for y people to z place, where they will eat a numbers of sandwiches, dry clean b numbers of suits and on and on. If we have a static economy, with the same number of people doing the same stuff over time then we have a chance of being able to do that planning.
Clearly, we’re in a time of change thus we cannot plan. What the future is will be emergent from the interactions of 65 million people and the varied – and recently changed – incentives they face. We’ve got to stand back and observe what happens, not tell.
The thing about economies being that they’re always in flux, it is always a time of change. The technological revolution proceeds as it has this past 250 years of roughly capitalism allied with roughly free markets. The universe of things that can be done changes as our ability to do things does. Similarly, tastes and fashions change, we desire different things to be done. The task of economic efficiency – well, of having an economy actually – is trying to match up that ability to do things with what people want done. Given that this is always in that flux we cannot have a planned economy.
Because no one knows buggery about what should be planned. The only useful option we’ve got is to observe what people actually go and do.
Sorry folks but all that scientific socialism has been tried and it don’t work. As PJ O’Rourke pointed out in wonder, how the hell did anyone come up with a system that made Germans poor?
We don’t know enough in order to be able to plan because we don’t know how people will react to changes in technology. Technology always changes – thus we cannot plan. This is the economic equivalent of Macmillan’s political observation about events dear boy, events.
Oh, it also means we should toss HS2 upon the bonfire but that’s just a detail of the wider point.