Planning and the invisible hand: Allies or adversaries?

Abstract

Sometimes planning is designed to counteract market forces, revealing an adversarial relationship between planning and the invisible hand. Other times, planning builds on the spontaneous order of the market and the two will be allies. This article offers two related arguments on the division between top-down planning and the bottom-up planning produced by the spontaneous order of the market. First, planning as a whole has insufficiently appreciated both the effectiveness of the spontaneous order of the market and the difficulty of overriding it. Second, when one recognizes the way in which bottom-up planning creates an orderly outcome, one can see that governments have simultaneously planned too much of the affairs of market participants, but at the same time have insufficiently planned their own activities.