PLANNING THE END OF PLANNING: A LETTER TO THE ECONOMIST (January 4, 2011)

Economists have offered much advice to countries in transition from socialist planning to capitalist market economies ever since the fall of the Berlin Wall. A particularly tangled problem is that of reunification of the two systems, as witnessed by East and West Germany. Now you report that some economists who have studied the latter case are offering advice on the reunification of North and South Korea (“Parallel Economies,” January 1, 2011). As you conclude your concluding section, enticingly entitled “Planning the End of Planning,” the two Koreas have one advantage over the two Germanys, for they can learn from example. I wonder. No transition advice offered by economists has been followed before, and there is thus no reason to believe this will change in the future. The tumult of transition does not allow for examples, either, no matter how exemplary. Even more important, the dismantling of planning systems has never followed a plan. To believe that something like this is achievable is to believe in planning in the first place. Economists would thus be best advised not to offer advice on topics that are well beyond their ken.