[This MasterResource post from February 2011 is reprinted for its relevance with the start of ObamaCare today. An uncomfortable question must be asked: what will happen in the health waiting rooms given what happened in the 1970s gasoline lines?]
For decades I have enjoyed the opinion-page editorials of the Wall Street Journal, both the unsigned editorials and the guest opinions. During the 1970s energy crisis, and today amid climate alarmism and the futile crusade to regulate carbon dioxide, the Journal has been a bastion of sound economic thought.
I was recently reminded of perhaps my favorite WSJ energy editorial of all, “Buffer of Civility,” published during the dark days of energy rioting in summer 1979 (yes, the U.S. experienced fuel riots from federal price controls that caused energy shortages).
What brought this to mind was another WSJ editorial, “Sebelius’s Price Controls,” which reported on a 136-page price-regulating rule under ObamaCare–and this message to state governors from HHS Secretary Kathleen Sebelius
…urging them “to prevent unjustified and excessive health insurance premium growth.”
“Obama’s sloppy use of science was carefully crafted to gain public support for ‘carbon pollution’ as the source of climate change. Using the term 20 times in his speech, he again conflated carbon dioxide, which is essential to plant life on this planet, with anthropogenic emissions (particularly from coal-fired power plants) as the principal cause of climate change. This rhetorical trick should now be obvious to all who were listening closely (or reading the transcript, as I did).”
Robert Peltier, Dr. Peltier, has been many things in his life: professor, marine, policeman, electric utility manager, and scholar/writer. He is honest and a realist, which led him to the free-market side of the energy debate.
Peltier has written a number of posts for MasterResource over the years (see Appendix A). We hope to hear from him in the future if his retirement priorities allow.…
[Editor note: The efficacy of decentralized markets relative to government planning is a staple of modern social-science thought. This two-part series (see yesterday) concludes by comparing and contrasting the ‘central planning’ of the firm with governmental planning in the economy.]
Firms have traditionally been thought of as socialism writ small. Ronald Coase in The Nature of the Firm (1937) quoted Dennis Robertson, who described firms as “islands of conscious power in [an] ocean of unconscious co-operation like lumps of butter coagulating in a pail of buttermilk.” [1]
At first blush, firms are hierarchical and centrally planned, terms commonly associated with the socialist economy. Frederick Taylor’s The Principles of Scientific Management (1911), the business bible of its day, saw greater industrial efficiency in tighter managerial control over employees:
…The work of every workman is fully planned out by the management at least one day in advance, and each man receives in most cases complete written instructions, describing in detail the task which he is to accomplish, as well as the means to be used in doing the work.