Central planning has failed – so let's stop demanding more of it

Central planning has failed – so let's stop demanding more of it

by Eben Wilson
article from Friday 25, November, 2016

CAN TAXPAYERS be blamed from turning their backs on politics and, across the Western world, voting to crush the political and media class? 

This week’s budget (for that's what it was) could be viewed as cautious and measured, but equally it can be interpreted as the outcome of a UK Treasury captured in the headlights of popular forces it cannot understand. It's sheer nothingness is matched only by the empty vessel of the Scottish Government’s legislative programme. Is it any surprise that one MSP was helping referee a football match when he should have been in committee, while another has been lecturing at his university.

Where has this immobilisation come from? In part, it is because “the data” has become hugely distorted. Politicians use statistics like managerial armour; they let them pontificate virally with obfuscatory certainty about things over which they have discretion but very little knowledge. Ms Sturgeon’s views on the value of the EU come to mind. The hound dogs of the media, lapping up all this claptrap in a permanent desire for a quick fix to societal problems catch this virus too and broadcast a melange of confusing, contradictory messages. The paying public are becoming more and more baffled; are these people really spending half our incomes? Can any of these numbers be believed? 

It really is bizarre when the Office of Budget Responsibility is required by statute to provide an aggregate growth figure that it itself says is vague and unverifiable; then politicians are asked to defend that projected performance, even as they propose actions that might make it meaningless. 

But managerial difficulties over explaining a chosen policy mission in numbers that don't add up are not enough to explain the sclerosis of the political elite. There is a much bigger story here which affects all who pay for the central state.

It is failing. 

Politics is about the expression of values, and it is in the nature of party politics to express these values aspirationally; offering a vision of a better world; goals of no child left behind, health and security for all, allowing the (ill-defined) “just managing” obtain higher incomes, harnessing skills and entrepreneurship; in Scotland we are replete with these goals. 

Damnably, politicians then try to use our taxes to make them come about, and here is where the failure begins; central planning, which we know did not work in the communist world where the levers of control were total, also does not work in social democracies. Instead, it has driven us into a sea of debt as aspirational spending programmes have sucked up our taxes and created a vast managerial bureaucracy which spends half of our money planning how to escape from its own failures. 

Every time it comes up with a new plan, it wants more money; every time it gets some more, it fails, and ordinary taxpayers pick up yet another bill for failure. It is worth stressing that Philip Hammond is proposing to spend another £122 billion of our children’s money; in the hope that it might get the state out of the mire of its own making. 

That continuing failure should worry taxpayers. Political science pointed out long ago (read Hayek’s Road to Serfdom) that the response of the repeated failure of central planning is not to stop planning, but the call for a “strong leader”; someone who will somehow be able to pluck methods that can turn aspiration into results out of the air. Well, history tells us that those methods are usually pretty inimical to peaceful and joyful living – totalitarianism as a follow-up to failed majoritarianism based on the false notion that democracy is a tool for good decision making is a horrible outcome for personal liberties. 

Wealth-destroying high taxation morphs into wealth-crushing authoritarianism. We will have to see if Mr Trump’s accession ends up as a damp squib of populist anger or a genuine strong-man initiative that curtails free trade and enhances American isolationism. I doubt very much if the US can become totalitarian, its democratic structures are too plural for that, and constitutionally locked to remain so, but the illiberality of many Trumpist values is very un-American. 

And that’s where the UK, and Scotland, can offer so much if they could just discard this fetish with what is in essence big state socialism with a “nice” corporatist face – even when bankrupt. Scotland invented liberalism, and if we confuse that with laissez faire or even corporatist capitalism we are making a huge mistake. Liberalism offers a set of other approaches to social and economic policy. They’re based on the idea of plurality of economic actions through localised institutions, with a particular emphasis on private voluntary methods. Liberalism trusts the people.


  • That means welfare mutuals to which we subscribe as disparate communities to support us in need or old age. 
  • It means localised trusts to run our schools, roads, streets and other community assets.
  • It means social insurance for integrated health and social care that leaves the state to concentrate on those who cannot cope. 
  • And it means localised skills training for our non-academic kids funded by business as a private endeavour that it can see benefits it locally. 

These are not massively radical initiatives, they are what Big Government does today, but done in a different way - with a lot less politics; which is what people want. 

They also have two things in common. The first is that politicians have to give up central power to community powers – to allow plurality, and innovation through experimentation and competition. The second is that they would allow us to pay a lot less tax to the central state; a liberal state may well still require us to hand over a third of our income for collective and personal support but taxpayers would be able to link what they pay to what they get for their money; and be free to choose what they really wanted to pay for, instead of being forced to support bad policies through their taxes – the source of such disrespect and despair of the political class. The focus would then be much less on the politics of spending than on the performance gained for that cost. 

The rocks being thrown around in the political glasshouse are making our nations’ parliaments a laughing stock among their own people. That’s a bad development; a strong core to any state is needed; untoward events can strike at any time; no nation can respond strongly if its people have no confidence in its leaders. Government must change and free us from its failure.

A version of this article first appeared on the taxpayerscotland.com website. Pictured: Friedrich von Hayek

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