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Planning Makes Us Poorer

I was browsing through the  Monmouth County Strategic Plan the other day (boy they sure churn out a lot of this stuff) and noticed this little contradiction that demonstrates why we should not allow politicians to do our economic planning for us.

Here is what it says:

 Support the retention of existing businesses, and identify and support potential growth

      businesses and sectors (tourism, healthcare, service industry, green businesses,

      modernization of infrastructure, etc.).

 Identify and alleviate structural barriers to business development.

Their use of government power to “identify and support potential growth businesses and sectors” is a major “structural barrier to business development”.  Dropping the first bullet point would be part of implementing the second.

They don’t understand that planning substitutes what the people actually want with what the planners and their experts think we want.  When force is used to give advantage to certain industries, we get more of that and less of what we would have produced absent the use of force.  But that’s the stuff we really wanted as evidenced by the fact that nobody had to force anyone to make it or to buy it.  Their experts can’t possibly know what is really wanted and what will succeed in the long run.  The end result is that we have to pay more for the things we really want because there is less of them available.  There is less of them available because capital and other resources that would have gone into making them are instead used to make solar panels or whatever else the experts think we should be buying.

Let me demonstrate the futility of economic planning with a micro-micro example from my own experience:

I work at the headquarters of an auto parts distribution company.  We have several warehouses in the tri-state area.  We compete in a highly specialized segment of the auto parts market, collision parts (sheet metal, bumpers, grilles, lamps, side view mirrors, etc.)  One of our bigger suppliers is a factory called Genera Corporation.  They are the largest independent manufacturer of automotive lamps and fan assemblies.  They also manufacture radiators, condensers and mirrors.  All their products are top quality and fairly priced so our competitors all buy from them too.

Several years ago when they decided to build a new east coast distribution center they chose an industrial area of Monroe Township because of it’s low taxes and proximity to the Turnpike.  We send a truck down there every day to pick up our orders.  Well guess what happened.  Within a couple of years some of their competitors set up warehouses right in the same nieghborhood because they knew companies like mine were already going there.  It became like a little automotive body parts Mecca.

Could planners have ever predicted that?  Never in a million years.  If Monroe had decided to hire expert planners to determine what should go there they would probably still be running around looking for green energy companies to fill their vacant lots.



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