In other words as long as you don't try to plan their activity. What you're describing is how more free market oriented economies work: with a central authority that has the power to force everyone to comply with its plans, but that deliberately chooses to mostly not exercise this power, in order to maintain a free market.
Central economic planning is better than the alternative (anarchy) only when addressing externalities that market forces do not address. So for instance providing a system of law, a national defense and basic scientific research. Even with all of the inefficiencies of top down planning, it still remains the only way to optimize resource allocation for the production of public goods.
> In other words as long as you don't try to plan their activity.
That's not what I said, and the two ideas are not equivalent. Agents may be allowed to accommodate locally only within certain limits, giving an appearance of free will, but still being within planned parameters and thus producing a controlled outcome. The system then will converge to a state that complies with the centrally stated goals. The key here is that individual agents are only allowed some local improvements, but they're prevented from any improvement to themselves that would damage the global optimization goals. See local search,  like for example Variable neighborhood search. 
The central authority sets very strong limits on what can and cannot be done, and enforces them strictly. It also sets up economic incentives, goals, rewards and punishments over the "free actors", like convincing workers that they need to program their lives around continuous learning and adaptation, jumping jobs every X years, and discouraging people from relying on the existing public education, healthcare and public retirement plans, which were the goals of the previous central plan, now deprecated. Anyone ''willingly'' failing to comply with the new program find themselves quickly pushed out of the system (but it was "their own fault", of course, for not "behaving rationally").
That's how the current Western world economic forces operate, and it's quite different from "mostly not exercising its power"; if that's a free market, it looks a lot like "forcing everyone to comply with its plans".
I haven't seen any evidence that this is an effective way of organizing an economic system, at least relative to the free market.
Modern western economies have grown increasingly stagnant as the level of central planning has increased since 1960. Contrary to your claim that "public education, healthcare and public retirement plans" have steadily been deprecated, the raw statistics show that government social spending in a major Western economy, the US, increased, on average, 4.8 percent per year between 1972 and 2011, after adjusting for inflation . This represents a massive shift to more central economic planning. And this shift has been associated with reduced rates of improvement in all metrics of economic development.