Copyright thedispatch
One reason we miss the point is that our models and ways of thinking obscure how economic systems work. Another reason is confusion over the concept of “planning.” Hayek stressed that his argument was never against planning per se; plans are a constant part of the commercial life of the capitalist economy. We plan as producers, and we plan as consumers. The problem with the planning Hayek was critiquing was about who was doing the planning, and for whom they were planning. Planning by a firm in a free market is wholly different from planning by a state committee for an entire economy. When this planning system was applied on the largest scale—in the Soviet Union and East and Central Europe—it failed spectacularly at creating a burst of productivity. Those who suffered under these regimes saw their wealth destroyed, their physical health decline, and their freedoms dwindle.
