Full text: Study week on the econometric approach to development planning

builder; and there must be a conscious effort to supplement 
the market mechanism by calculating costs and prices for acti- 
vities which lie outside the market economy or which have 
important aspects which the market does not value. 
A plan tells us how to set about achieving our policies given 
the operating characteristics of the system. It can be identified 
with administration or control. These words can in turn be 
identified either with coercion, exemplified by the policeman, 
or with a means of self-regulation, exemplified by the Watts 
governor or the thermostat. The opposite of plan is no-plan. 
or anarchy. 
In theory laissez faire is not an example of no-plan; it is 
a perfectly coherent plan for operating an economic system. 
Îts strength lies in the fact that it is self-regulating. This is 
achieved by placing decisions in a large number of centres 
2ach of which is intent on maximising its advantage. An 
examination of biological and ecological systems suggests that 
‘hey owe their robustness to similar forms of control: the pre- 
lator-prey relationship cannot be understood by identifying 
‘he predator with a policeman. The fundamental objective to 
laissez faire as a form of planning is that it works with limited 
values and limited information: the values of the market place 
and the information provided by current prices and by the 
orices on a small number of forward markets. 
The reaction to laissez faire has taken two forms: central 
planning and government intervention in specific aspects of 
>conomic life. 
The first reaction has the merit that it places the determi- 
nation of policies squarely where this belongs, in the class of 
political decisions. Its shortcomings which derive largely from 
its political origins. lie in an exaggerated notion of the pos- 
Stone - pag. 23

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