Central Planning: China's Miracle--and Malaise

The illusion created by the initial success of central planning is that it can continue indefinitely, when the reality is it's self-liquidating as the distortions unravel the entire economy.

China offers a real-time case study of the upsides and downsides of central planning, broadly defined as the central state establishing the goals, financing, incentives and regulatory structure for various sectors of the nation's economy.

In the U.S., examples include the transformation of the American economy to wartime production in World War II, and t…