Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic

dimensions of our lives and those of our children. I'm your host, Richard Wolfe. Today's program is a

little bit different because I want to deal with one basic issue, the economics of which I

think you will find interesting. It's about planning versus the market, the so-called great either-or of the last century.

Either you organize your economy with private owners, private enterprises, interacting in

markets with one another and with the public, or you have the government come in, plan what gets produced, plan who gets

what of it shipped to them. In other words, planning, which tends to be socialist or associated

with the Soviet Union or with socialism on the one hand, and the market, which tends to be associated with private enterprise,

capitalism, and all of that. And we're supposed to be living in the great world of conflict

between planning and the market. I think that's a mistake. I don't think the differences

between them are anywhere near as profound as an

awful lot of folks have worked very hard to make them appear. In other words, I think we

ought to get beyond a false dichotomy between planning and markets, and I'm going to give

you two basic reasons why.

The first one is a comparison.

I'm going to give you another example important today, where either or kind of thinking

like this, like planning versus market, has shown itself again to be a mistake, to be an old-fashioned

and therefore no longer appropriate, if it ever was kind of difference. And then I'm going

to show you how the planning and the market turn out not to be the either or in our own lifetimes.

So first, the example.

It has to do with explaining inflation.

Those times, like the one we're living in, when prices go up.

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