Planning and the Two Coordinations, with Illustration in Urban Transit

16 Pages Posted: 3 Feb 2004

See all articles by Daniel B. Klein

Daniel B. Klein

George Mason University - Department of Economics; George Mason University - Mercatus Center

Abstract

It turns out, of course, that Mises was right. Thus the economist Robert Heilbroner concluded on the great debate over central economic planning. Yet for urban transit, researchers and planners still argue that central planning is necessary to coordinate the system. Do Mises and Hayek not apply to transit? Planners might associate the Hayekian learning with rarified economic models, and the Hayekian prescription with perfect competition. They might maintain that a policy of free competition for urban transit leads to numerous problems. But are such problems a failure of the Hayekian philosophy? Hayek's idea of the free economy was not atomistic exchange and mechanistic markets, but rather a system of voluntary planning embodied in the nexus of property, consent and contract. Hayek's line of reasoning points toward proprietary governance. Urban transit serves as a contextual example to clarify Hayekian thinking about planning and coordination.

Keywords: Planning, coordination, spontaneous order

Suggested Citation

Klein, Daniel B., Planning and the Two Coordinations, with Illustration in Urban Transit. Constitutional Political Economy, Vol. 8, pp. 319-335, 1997, Available at SSRN: https://ssrn.com/abstract=465061

Daniel B. Klein (Contact Author)

George Mason University - Department of Economics ( email )

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United States

HOME PAGE: http://economics.gmu.edu/people/dklein

George Mason University - Mercatus Center ( email )

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