What is economic planning?
economic planning, control and direction of economic activity by a central public authority. In its modern usage, economic planning tends to be pitted against the laissez-faire philosophy which developed in the 18th cent. Proponents of laissez faire believed that an economy works best when there is little government interference. The contemporary economic model of rational expectations offers perhaps the strongest critique of economic planning in its assertion that economic forecasting, both by individuals and competing businesses, is generally rational. In this model, government control of economic policy can only lead to complication, since any change instituted by central authorities has already been anticipated by the market. The level and type of central planning in any economy is generally connected to the sort of political regime that dominates. In recent years, heavily structured economic programs have been associated in particular with socialism, communism, and fascism. Econom
