Central Planning For Dummies: Don’t Ignore New York
Yesterday, former SEIU President and Obama Administration appointee, Andy Stern, wrote an article in The Wall Street Journal lauding the virtues of the Chinese Communist centrally planned economy. He asserts that the Communist’s 12th Five-Year plan has set the goal of achieving low unemployment, public housing and rural development and with the extraordinary growth of the Chinese economy, central planning has proven itself to be a superior model to ” the free-market fundamentalist, share holder only model.”
Stern conveniently ignores the fact that the central planning model in China is having problems and that their economy is contracting month by month. As a member of the labor elite he should be concerned with this because one of the major stories of the past week in China is that the contracting economy has been causing labor unrest and out-of-control land grabs in rural areas. The underpaid factory workers (by most accounts the real engine of China’s extraordinary economic growth) have a history of unrest and their growing demands are usually stifled by the unions controlled by the Communist government. Ironically, with China’s embrace of markets, labor conditions and labor rights have also been enhanced, often despite the best efforts at the Communist Party to enforce labor discipline.
Of course, China- envy has been going on for some time now. Andy Stern is not new in his admiration of the authoritarianism of the centralized administrative state. New York Times columnist Thomas Friedman has long been an advocate of Chinese industrial development, and some American corporate types also like the known quantities of central planning. Casino magnates like Steve Wynn have praised the Chinese government’s stability. New experiments in this model are being attempted as well. The Congressional budget supercommittee was an attempt to implement a more rational, authoritarian and streamlined form of governance.
However, I wonder why American advocates of central planning have to go to a foreign Communist country to find intellectual support for their ideas? The United States has been experimenting with central planning for most of the 20th Century. The huge adminstrative apparatus of the federal government is really nothing more than centralized economic decision-making. And those states we call “welfare states” are really, in fact, experiments in central planning that rest on the basic idea that capitalism is a failure for many.
However, the economic failure of states like New York and California offer up-close and homegrown proof of the failure of central economic planning, and this is a very inconvenient truth for the China-envy crowd.
Books have been written on the miserable effects that central planning has had on New York, so we won’t go into all that here. One of the worst examples of New York government central planning are its economic development councils, or economic redevelopment agencies. They are fonts of political corruption and cronyism, and they keep the unions happy enough so that they keep electing Democrats.
And we know the results of multi-generational Blue statism: Like all socialist countries and other socialist entities, the people really, really, really want to get out. The 2010 Census shows that over 1 million people left New York between 2000 and 2009. Further data shows that they are leaving for low tax, Republican- controlled states like Florida, Texas, Georgia and other southern states.
We are witnessing the failure of central planning all over the United States. Budgets are bloated and cannot be paid for. The high taxation that results has driven businesses and population away. But faced with this reality, the advocates of central planning choose to ignore the empirical conclusions that can be garnered from their long-gestating experiments. Instead, they are (desperately) trying to convince Americans that a Communist country holds all the answers. To them and their technocratic allies, it appears that the the Constitutional order, the republican form of government, and American liberty itself, are no longer workable.That is why they think that only dummies can see value in such things.