In my previous column, "Puzzling complexity", I compared the economy to a billion-piece jigsaw puzzle. Each piece of the puzzle represents a slice of unique knowledge about real-world economic facts and opportunities.

I also assumed that each puzzle piece can be snugly fit with any of the other 999,999,999 pieces -- but that there's no guarantee that a recognizable picture will emerge when all billion pieces are combined together. The picture will likely be visual gibberish.

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How to ensure that these billion pieces combine together so that the resulting image is meaningful and, therefore, pleasing and valuable to humans?

Putting a central planner (or committee of planners) in charge won't work. First, there's no way that the planner, gazing at a huge pile of puzzle pieces, can foresee any of the possible meaningful pictures that might emerge once these billion pieces are assembled. This jigsaw puzzle doesn't come in a box whose cover depicts the final result.

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How can the planner know, as he proceeds, if the groups of pieces that he has so far assembled will turn out to be part of a larger, meaningful picture?

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How is the planner to sensibly choose whether to keep going with his current assembly or to start over? The best he can do is guess. Unable to see the future, the planner has no way to know that the image depicted by the 2 million pieces that he has assembled so far will prove to be useful or useless. He's flying blind.

This planner, though, is sure that he's on the right track. He keeps assembling. Even when he has 200 million pieces assembled and the image still remains meaningless, he presses on with confidence that, at some point as the remaining 800 million pieces are added, a beautiful picture will emerge.

As he presses on, though, people who are hoping to see a beautiful image taking shape begin to complain. They want to see a pleasing picture, but so far, all they see is random globs of color and a meaningless tangle of lines.

How might the planner respond to these complaints?

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Clearly, planning is a terrible way to try to assemble the puzzle. A far better way is to let the puzzle assemble itself.

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Fortunately, the puzzle pieces in the economy can indeed be fitted with such monitors, as we'll see in my next column.