As promised, here is a passage from Hayek’s Road to Serfdom (pp. 34-35) elucidating the meaning of “planning.” It is only by ignoring or misconstruing Hayek’s discussion of the different significations that the word “planning” can have that central banking can be confused with central planning.
‘Planning’ owes its popularity largely to the fact that everybody desires, of course, that we should handle our common problems as rationally as possible and that, in so doing, we should use as much foresight as we can command. In this sense everybody who is not a complete fatalist is a planner, every political act is (or ought to be) an act of planning, and there can be differences only between good and bad, between wise and foresighted and foolish and shortsighted planning. An economist, whose whole task is the study of how men actually do and how they might plan their affairs, is the last person who could object to planning in the general sense. But it is not in this sense that our enthusiasts for a planned society now employ this term, nor merely in this sense that we must plan if we want the distribution of income or wealth to conform to some particular standard. According to the modrn planners, and for their purpsoses, it is not sufficient to design the most rational permanent framework within which to the various activities would be conducted by differeent persons according to their individual plans. This liberal plan, according to them, is no plan — and it is indeed, not a plan designed to satisfy particular views about who should have what. What our planners demand is a central direction of all economic activity according to a single plan [my emphasis], laying down how the resources of society should be ‘consciously directed’ to serve particular ends in a definite way [my emphasis].
The dispute between the modern planners and their opponents is, therefore, not a dispute on whether we ought to choose intelligently between the various possible organizations of society; it is not a dispute on whether we ought to employ foresight and systematic thinking in planning our common affairs. It is a dispute about what is the best way of so doing. The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they [Hayek’s emphasis] can plan most successfully; or whether a rational utilization of our resources requires central [Hayek’s emphasis] direction and organization of all our activities according some consciously constructed ‘blueprint‘ [my emphasis]. The socialists of all parties have appropriated the term ‘planning’ for planning of the latter type, and it is now generally accepted in this sense. But though this is meant to suggest that this is the onlyrational way of handling our affairs, it does not, of course, prove this. It remains the point on which the planners and the liberals disagree.