Central planning is inefficient and ineffective from "summary" of Free to Choose by Milton Friedman
Central planning involves a small group of people making decisions for the entire society. This group believes they have the knowledge and wisdom to determine what is best for everyone. However, this assumption is flawed. No small group, no matter how intelligent or well-intentioned, can possibly possess all the knowledge needed to make decisions for an entire society. The information required to make these decisions is dispersed among millions of individuals in the society. Each individual has their own unique knowledge, preferences, and circumstances that must be taken into account. Central planners simply cannot gather, process, and effectively utilize all this information in a timely and efficient manner. Furthermore, central planning leads to a lack of incentives for individuals to work hard, be innovative, or take risks. When the rewards for effort and success are not tied to individu...Similar Posts
Robert Solow's research on economic growth earned him a Nobel Prize in Economics
Robert Solow, a brilliant economist, made a groundbreaking contribution to the field of economics through his research on econo...
Government plays a role in regulating the economy
The economy is not a self-sustaining, self-regulating entity. Left to itself, it has a tendency to fluctuate wildly, creating b...
Financial markets are not always efficient
Financial markets are often portrayed as efficient mechanisms that quickly incorporate all available information into asset pri...
Discrimination is inefficient
The concept that discrimination is inefficient is a fundamental principle of economics. In a free market economy, resources sho...
Central planning stifles creativity and innovation
The imposition of a centrally planned economy inevitably leads to a suppression of individual creativity and innovation. This i...
Tax cuts can stimulate economic growth
Tax cuts have the potential to stimulate economic growth by putting more money into the hands of individuals and businesses. Wh...
Exchange leads to innovation and prosperity
The exchange of goods and ideas is the engine of human progress. When people come together to trade, they are not just swapping...
Government must maintain a limited role in society
The idea that government should play a limited role in society is not a new one. Throughout history, societies have grappled wi...