Yesterday in his speech Liberal leader Michael Ignatieff declared Canada needed a “plan for growth.”
“Plan” --- one of the scariest words in a politician’s vocabulary.
Show me a politician who thinks he can “plan” economic growth and I’ll show you a politician who has not learned the lessons of the Soviet Union.
Rember the Soviets?
Besides being big on conquering Europe, they were all about planning.
They had massive centralized bureaucracies dedicated to allocating resources, creating industries, funding research and drinking vodka.
Yet despite all the planning and despite the fact they could impose these plans at the point of a bayonet, the Soviet economy still ended up wreck.
That’s because the economy is not like a car, it’s not just something you can “steer” in the right direction. It's more like a force of nature---difficult to predict, hard to control and impossible to direct.
Yet, there are always intellectuals like Ignatieff who think they are smart enough to plan for growth -- a tax here, a subsidy there, maybe a tariff or two and voila the country is rich.
What the Ignatieff’s of the world just don’t understand is their intellect is no match for the wisdom displayed every day by the millions of decision-makers in the market. People who are actually working for a living, in the real world.
It’s these people, when allowed to pursue their interests freely, who create wealth and prosperity.
That's why we don’t need fancy government plans for economic growth.
The best government can do is get out of the way.