Download - The India Economy Review

nomic order. In his infl uential 1920 article,
Economic Calculation in the Socialist
Commonwealth, Mises wrote that ‘in the
socialist commonwealth every economic
change becomes an undertaking whose
success can be neither appraised in advance
nor later retrospectively determined.
There is only groping in the dark.
Socialism is the abolition of rational
economy.’ 13 The debate that Mises initiated,
and one that Hayek carried forward,
was one of pitting liberalism against socialism,
and in this debate the importance
of economic planning was a central one.
Economic Planning and
Sharpening of the Debates
The debates that were carried out on economic
planning and centralized planning
in the perspective of market
processes held up important lessons
for those that would be interested
in these formulations.
The debates were not just onesided.
It turns out that these were
subjected to critical assessments. In
this context Boettke points out that the
‘intellectual biases of the time failed to
appreciate not only the economic problems
of planning, but ignored political
diffi culties of planning.’ 14 Economic planning,
in other words, could work insulated
from political processes even if centralization
of such planning was opted for. The
formats of the political aspects opted for
were muted ones indeed. Keynes, who
would propose governmental role in economic
planning in signifi cant measures,
wrote to Hayek stating that, ‘I should
therefore conclude your theme differently.
I should say that what we want is not
no planning, or even less planning, indeed
I should say that we almost certainly want
more. But planning should take place in a
community in which as many people as
possible, both leaders and followers,
wholly share your own moral position.
Moderate planning will be safe if those
carrying it out are rightly oriented in their
own minds and hearts to the moral
issues.’ 15 Keeping with this approach,
Keynes proposed that, ‘What we need
therefore, in my opinion, is not a change
in our economic programmes…..what we
need is the restoration of right moral
thinking – a return to proper moral values
in our social philosophy.’ 16 This was in
response to the ‘moral rule’ that Hayek
had referred to in the context of who
would carry out economic planning for the
economy. Keynes, one can read into this,
I NTEGRATED PLANNING
was in favour of a pattern where centralized
planning would be carried on by the
political structure and aided for the purpose
by benevolent civil employees responsible
for such planning. The orientation
of those in charge of carrying out
centralized planning required being morally
correct and when this was so it could
be expected that the planning confi gure
would be able to realize goals set for society.
Keynes who was an active participant
in matters related to governmental activities
and aware of the trends that did take
place in the societal context did however
add something more in his correspondence
with Hayek. ‘Dangerous acts’, Keynes
wrote, can be done safely in a
community which thinks and feels
rightly, which would be the
way to hell if they were executed
by those who think and
feel wrongly.’ 17 This, Friedman
points out, is an expression
of Keynes’s ‘bequest to politics’. 18 The half
way format, in a manner of speaking, was
an allusion to the relationship of the State
and economic planning.
Economic planning could work
insulated from political processes
even if centralization was opted for
This was not all, and other economists,
concerned with the approach towards
economic planning outlined by Hayek and
Mises, debated that the move towards
centralized planning was not a handicapped
road to take. And nor did they
agree that economic planning would lead
to the emergence of an authoritarian political
regime. Rebutting Hayek on the
approach that he had adopted as regards
political implication of centralized plan-
THE INDIA ECONOMY REVIEW
39