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D. Problems of economic planning
Economics 335
Reference has repeatedly been made above to the link between the study of
dynamic problems which is now gaining ground in economics and the recognition
of the need to intervene in economic processes and, in this way, end the
age-old cult of spontaneity in an all-important sector of social life. Tinbergen
believes (cf. Central Planning, Yale University Press, 1964) that laissez-faire
ideas are entirely outmoded: ‘The formulation of aims of policy became more
necessary after the belief in laissez-faire was given up. Before that time there was
no need for planning since it was believed that free economic forces would lead
to the best development conceivable. When this belief died it became necessary
to formulate norms for optimum development.’ Myrdal (International Economics)
is even more categorical and defines laissez-faire as an exceptional and
short-lived phenomenon in the history of capitalism (‘laissez-faire interlude’).
Other Western economists do not regard the end of laissez-faire as quite so certain,
although (sometimes not without regret, as in the case of the Chicago
school) they recognize its decline.
The authors of the Economic Survey of Europe in 1962, Part 2 - Economic
Planning in Europe (Geneva, United Nations, 1965) mentioned the following
four factors as contributing to the gradual acceptance of planning by the ‘market
economies’ of Western Europe (in the East European countries, planning is
regarded as a direct outcome of revolutionary changes in their socio-political
systems) :
I. The gradual adoption of a global view of the economy was given a new impetus
in the market economies by the great depression and by the second
world war and its consequences.. .
2. The gradual recognition of the need for a more active rde of the government..
.
3. The growing preoccupation with long-term objectives.. . Even when balance
of-payments equilibrium or full employment or monetary stability are the
primary objectives, their purposeful pursuit requires an extension of the
time-horizon.. .
4. The trend towards widening participation in the shaping of medium and
long-term economic policies.
These findings largely endorse our own conclusions. Obviously, the impact of
the practical achievements of the planned economies must have been quite im-
portant.
The proliferation of planning ideas has significantly increased the gamut of
forms of planned intervention in economic processes. Such concepts as ‘eco-
nomic plan’, ‘planning’, and so on, have lost the unequivocal association with
specific political systems, or institutions, or techniques which they had when the
only existing planned economy could be readily contrasted with the rejection,
by the market economies, of the very principle of planning. Aneed thus arose to
define such concepts as plan, planning, planned economy, as distinct from such
concepts as projection, forecast, government intervention, and so on. The divid-
ing line is not easy to trace (which accounts for the constantly repeated attempts