Curse of The Planner

In her excellent book The Siberian Curse, British-American author Fiona Hill describes how the settlement of Siberia in the twentieth century and the mass movement of people and industry into this vast region by central planners lie at the root of many of Russia’s contemporary problems.

Central planning – whether geo-political, social, urban or economic – has caused many a disaster.

Examples abound around the world, but allow me to cite a local one.

Worst of all, it puts home ownership out of the reach of those on low and middle incomes. 

A number of years ago, I bought a block of land on a very busy main road in one of Australia’s capital cities.  I submitted plans to the local council to build 12 semi-detached home units on the land and, as the zoning allowed for such a development, I didn’t expect any problems. That was of course until I came up against the Council Town Planner who said he’d recommend the development be approved “subject to the provision of noise attenuation devices” across the front of the property (noise attenuation is a fancy name for sound-proofing).  I tried to point out that there were thousands of kilometres of main roads with many thousands of dwellings fronting these main roads and it all seemed to work quite well without ‘sound attenuation’. I also told him that the project was actually geared towards older people, many of whom prefer the noise of traffic and pedestrians chatting as they said it made them feel safer than in some quiet back street or cul-de-sac.  But he was having none of it. He wanted his noise attenuation devices.  

Naturally, I tried the commercial argument that people who didn’t like noise wouldn’t buy into the project and that the market would sort it out.  But for reasons known only to town planners but obscure to common sense, he rejected all my pleas, and I had an acoustic engineer design a front fence to assist with noise attenuation.  But no sooner had I finished the job than the Royal Society for the Deaf bought all the units – every single one of them.  I showed the planner the contract and he couldn’t even see the funny side of it. 

Ludwig von Mises, one of the most notable economists and social philosophers of the 20^th century, observed:

‘The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans.  Planners aim at one thing only:  the exclusive absolute pre-eminence of their own plans.’

National, State and Local government planners now infiltrate our lives at every turn. 

Take the Reserve Bank of Australia (RBA), for example, the nation’s main economic planner.

The RBA has over 1,500 staff and as well as its headquarters in Sydney, has offices in London, New York and Beijing. 

The RBA basically has one main task – to control inflation. As we know, inflation is caused by too much money chasing too few goods and services. When governments contribute to this by running deficits, the RBA is there to put up interest rates and make the government feel the pain of their spending. In recent years, however, the RBA did not do this. In fact, in spite of record deficit-spending, former RBA Governor Philip Lowe said in 2021 the bank would be keeping interest rates low until at least 2024! 

Central planning – whether geo-political, social, urban or economic – has caused many a disaster.

Since then it has raised interest rates 14 times in an attempt to bring inflation under control, in effect shifting the inflation burden to consumers – particularly low-income consumers – through price rises. 

One can also trace the current housing affordability crisis back to the RBA when it similarly refused to admit it made a mistake with its submission to the 2003 Productivity Commission Inquiry into First Home Ownership. The Bank’s focus on demand stimulators (capital gains tax, negative gearing, low interest rates, etc. – all Federal matters) and not supply factors had a huge influence in shaping the Productivity Commission’s findings. 

As we now know, the RBA overlooked the real source of the affordability problem – the unwillingness by State governments to release more land for new housing and urban planners’ obsession with urban densification, an idea that has failed all over the world. Whether it’s traffic congestion, air pollution, the destruction of bio-diversity or the unsustainable pressure on electricity, water, sewage, or stormwater infrastructure, urban densification has been a disaster. Worst of all, it puts home ownership out of the reach of those on low and middle incomes. 

As von Mises observed, the step between planner and dictator is not as big as some might think. When their plans are rejected, planners become indignant, and instead of adjusting their plans to suit the people who have rejected their ideas, they seek ways to enforce their will on the people. The inner authoritarian is revealed.

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