Category : Books-Non-Fiction

Sub Category : Politics

There are multiple reasons why Central planning fails. Any time a industry, or corporation is nationalized, it does worse then when it was privatized. 

Reason 1 
The government has other things to worry about. Let's say the government does the minimum, they protect the borders, and enforce the laws, everything else is done privately. Now let say the government nationalize the oil industry. Anytime that there is unrest, the government has to spend more resources to slove the problems, and less on the oil industry. 

Reason 2 
The government can't create corruption that are equal to private ones. Private corporations have to take the risk of losing there own money, national corporations don't, this means they often spend more for less. 

Reason 3 
If the government was to buy a existing corporation, and nationalize it, then it would cause the stock markets to fall. This is because the government may nationalize other corporations, and further restrict our right, and people would sell any stock to that corporation because of fears that it will be stolen. 

Reason 4
There are hundreds of thousands of people making millions of decisions every day. It's impossible to control the market, with a small group of planners. The government would have to predict decisions ahead of time. Since there are thousands of groups if one store didn't plan on you buying candy, then there probably another that did. 

Reason 5 
The more complex the economy becomes the more decentralized it has to be. When it takes more groups to produce certain items then before, and more items are being produced, then more people have to plan how to get these items to the people. This is true in a free market economy too. As a economy becomes more complex we get better products, and more of those products. If a corporation makes a bad choice another will make the right one. If the government makes a bad choice, it has to undo it, which takes longer then it does for a private company.