The meaning of economic coordination

I fear the Australian public has given so little thought to the subject of economic coordination that I may profitably spend a few moments discussing just what it means.

There is no need for me to dwell on the word “economic”, even though its normal content is somewhat expanded in time of war. As for “coordination”, it will be sufficient to remind you that the dictionary defines it as “the harmonious combination of agents or functions towards the production of a result”. Taken in conjunction, however, and with special reference to their application in time of war, the words acquire a special significance.

If economic coordination is to be regarded as the deliberate combining into one harmonious whole of the diverse forces that constitute an economy, it becomes obvious at once that the term is inapplicable to an economy which relies on a system of completely free enterprise. It is, indeed, the chief justification of the system of free enterprise that market forces will automatically bring about their own coordination through the operation of the profit motive, producing those “economic harmonies” of which Bastiat wrote so enthusiastically in the middle of last century. Under a system of completely free enterprise, therefore, economic coordination can have meaning only if applied to the activities of a single profit-seeking unit in the economy, or to the governmental framework within which the profit-seeking units are compelled to operate.