Monrovians - Unite!  Democracy and Central Planning.

Hayek asserts that the common features of all collectivist systems may be described in a phrase dear to Socialists of all stripes as "the deliberate organization of the labors of society for a definite social goal."

This directs us immediately to the point of conflict that must arise between individual freedom and collectivism of all types.  The various kinds of collectivism (communism, fascism, socialism, Democratic socialism, etc.) differs among themselves primarily in the nature of the "social" goal toward which they want to direct the efforts of the society.  Each of them differs from classical liberalism and individualism  in wanting to organize all of society and all of its resources towards this unitary end, and in refusing to recognize autonomous spheres in which the ends of the individual are supreme.  In short, they are totalitarian in the true sense of the word.

The "social goal" or "common purpose" for which society is to be organized is usually vaguely described as the "common good" or "general welfare"  or "general interest."  Thinking about these terms, one quickly realizes that they do not have sufficient meaning to determine a particular course of action.  The welfare of a people, like the happiness of an individual, depends on a great many things that can be provided in an infinite variety of combinations.

Hayek asserts that the "common good" cannot be expressed as a single end, but only as a hierarchy of ends, a comprehensive scale of values in which every need of every person is given its place.  To direct ALL of our activities according to a single plan (the central plan) presupposes that every one of our needs is given its rank in an order of values which must be complete enough to make it possible to decide among all the different courses which the planner has to choose.

In our society there is neither occasion or reason why the people should develop common views about what should be done.  But where all the means of production to be used are the property of society and are to be used in the name of society according to a unitary or central plan, a "social" view about what ought to be done must guide ALL decisions.  In such a world, Hayek asserts, we would soon find that our moral code is full of gaps.

Hayek notes that the growth of civilization has been accompanied by a steady reduction of the spheres in which individual actions are bound by fixed rules.  The rules of which our collective moral code consists have become progressively fewer and more general in character.  There simply is not a universal moral code which can direct every aspect of society.

Even if there were such a moral code, it would be impossible for any person to comprehend the infinite variety of different needs of different people which compete for the available resources  and to attach a definite weight to each one.  Hayek asserts that this is the fundamental fact on which the philosophy of individualism is based.  Since no person can possibly take the needs of every other person into account, and so all such judgments are inevitably based on limited facts and considerations each individual should be able to utilize his own limited view of what priorities ought to be, as far as possible. 

This does not preclude people having similar or even identical ideas, nor preclude the recognition of social ends.  Rather, it limits the government's power to act to those matters in which the majority of people agree that it should act.  Individual are free to act together, or to contribute towards a common goal with time and resources, but has extremely limited power to force others to join a cause with which they either disagree or consider a lower priority than some other social good.

Where a common organization, including the state, is created to act on behalf of individuals, in the individual model the organization or State is but one person among many, not the supreme power.  But once the State controls a critical mass of the society's resources, its influence becomes so large that it affects the rest of society unduly.

When people vote for a socialist or collectivist system, they are normally only voting for the mechanism by which the "common good" will be obtained.  Once the State has sufficient power, it becomes apparent that the meaning of "common good" to those in power only occasionally matches the vast majority of people.  Imagine that a group of people all agree to take a trip together in a car, but don't first agree on the specifics of where the car is going.  They may end up on a visit to a destination that the majority of them do not want to be at.  By having a central planner with a powerful State, action requires that the people agree on a much greater number of topics and policies than previously required.  The system is required to force "agreement" by everyone in order to maintain legitimacy, and anyone who does not agree becomes an enemy of the State.  But the people may prefer no plan to adopting any of the plans proposed for adoption by the Legislature, even if the lack of plan is otherwise not optimal.  In other words, no plan is often better than a bad plan, so unless a consensus is reached, the people have made this choice.

A Legislature may not be able to take action to address a problem, but this would only be because the people's representatives are unable to reach agreement on the action to be taken.  Lacking a consensus, the State cannot force its citizens to act in ways in which the majority will disagree.  Indeed, this perceived inaction is often the very motivation for those who want to leave everything over to the "experts" or "central planners" so that the ones with the power will actually be able to take action.

Most democracies seek to resolve this problem by delegating discreet issues to bureaucracies and "independent" agencies empower to enact rules in a limited sphere of authority.  Presumably, if the people are unhappy enough with the rules thus promulgated, they can choose to change the bureaucrats, the rules themselves, or even abolish the bureaucracy itself.  But if a Democracy decides to adopt central planning, the requirements of central planning will eviscerate personal freedom.  This is true whether this is a technical dictatorship or a technical Democracy because central planning by its very nature is antithetical to personal freedom.

A free market system does not require agreement between all who participate in it.  It works to resolve problems by permitting each person a vote.  The market system adapts to the varying and often contradictory aims of those who participate in it.  One person wants all blue walls, another wants yellow, another wants no walls at all - each has the opportunity to satisfy his own definition of the best use of his or her resources.  Tremendous actions can be achieved where a large number of people agree on the common good - but only for so long as the agreement holds.

Businesses spring up spontaneously and grow to great heights.  Businesses disappear when its services no longer meet the needs of enough people.  But neither requires a society-wide consensus to take place.