Global markets today seem irresistible to central bankers with plans for better times. Planning is the central bankers’ baleful vanity since, for them, markets are a test tube in which to try out their interventionist theories. Central bankers control the price of money and therefore indirectly influence every market in the world.
Given this immense power, the ideal central banker would be humble, cautious and deferential to market signals. Instead, modern central bankers are both bold and arrogant in their efforts to bend markets to their will. Top-down central planning — dictating resource allocation and industrial output based on supposedly superior knowledge of needs and wants — is an impulse that has infected political players throughout history.