The human brain is very good at extracting certain patterns from surrounding chaos. In particular, it confidently tracks repeating scenarios within a single continuous flow of time. It applies this ability in attempts to predict the future. By knowing the future, a person gains the ability to adapt their actions to it, that is, to plan them. Moreover, they can make assumptions about what actions should be taken so that the future becomes more desirable for them.
As long as everything goes according to plan, a person may not worry about the future and, accordingly, not undertake efforts that the plan does not require. Therefore, the desire to organize the world and fit it into one’s plans is quite rational for people.
If the solution to complex tasks requires the participation of many people, then their joint activity can also be planned—that is, determine in advance what efforts, when, in what sequence, and with the involvement of what resources they should undertake to achieve the future preferred by the planner.
As long as we are talking about the execution of a single plan, the picture looks quite coherent. The problem arises when we remember that every person creates their own plans, and libertarians view the individual as a self-owning subject who is not obliged to fit into others’ plans if they do not correspond to their own.
If this problem is ignored and all people are denied the right to personal plans, then theoretically such a society can build an arbitrarily complex system to execute an arbitrarily complex plan handed down to this society by some subject standing above it. The more willingly people sacrifice personal plans for the sake of a well-planned common goal, the more successfully such a society is able to achieve that goal.
In practice, however, the willingness of people to subordinate their actions to the execution of a single plan tends to dwindle, especially among those who see no personal satisfaction in its execution. Therefore, reasonably successful planned economies are usually formed by volunteer collectives around a short-term goal (for example, hiking a specific route in the mountains as a group for pleasure) or by collectives forced to face tasks of high importance (for example, joint survival and returning to a normal course of life after a catastrophe).
One can try to solve the problem of individual plans by attempting to coordinate them and develop a single compromise solution, the implementation of which the society will then work on jointly within a single plan. The more primitive the final compromise solution, the easier it is to implement, but the less predictable the result will be. For instance, coordinating individual plans for using a common road by implementing the primitive rule “everyone drives on the right side” is much easier than drawing up a general schedule indicating who departs and arrives where and at what time. However, the primitive rule allows only a rough estimation of the arrival time of a specific road user at the destination.
Attempts to create plans that account for individual needs as much as possible while regulating all aspects of production and consumption were undertaken in socialist societies and worked more successfully the smaller the size of the society. To explain this, Ludwig von Mises put forward the calculation argument (a system of central planning is unable to establish priorities in the use of resources that account for individual preferences of people as long as it lacks information about who values what and to what extent—and this information can only be obtained by observing the free choices of people not bound by external coercion), and Friedrich Hayek supplemented it with the argument of dispersed knowledge (people’s knowledge about what they are directly in contact with is local, dispersed, and inarticulable in nature, and therefore cannot be collected and used by a central planner, which makes complex and comprehensive plans poorly reflective of reality).
Thus, planning is an effective tool for organizing human activity; however, the need to coordinate individual plans sharply reduces the efficiency of planning in large collectives.