A Hayekian Lesson

by Don Boudreaux on July 16, 2008

in Complexity & Emergence, Myths and Fallacies

Here’s a letter that I sent last month to the Wall Street Journal:

Ernest Christian and Gary Robbins nicely detail some of the irrational policies driven by political passions and preposterous presumptions (“Stupidity and the State,” June 7).

One reason for this situation is that “We the People,” who are supposed to monitor our government, are 300 million individuals, each evolved to be able to digest only a tiny fraction of the knowledge necessary to keep such a huge society working.  In the free market, when each of us sticks to our own knitting, prices and competition weave our efforts together into a remarkably productive whole that is no part of anyone’s intention.

But when We the People try to plan large swathes of society consciously, we succumb to what Hayek called “the fatal conceit.”  We simply are not mentally equipped to govern society with the same effectiveness, subtlety, and prudence that each of us is evolved to bring to the governance of our own personal affairs.  So it’s no surprise that governments with vast powers routinely behave stupidly: they are attempting to do the impossible while being overseen by the ill-informed.

Donald J. Boudreaux

Be Sociable, Share!



16 comments    Share Share    Print    Email


Unit July 16, 2008 at 1:49 pm

Hope they'll publish this one!

Can we use it to amend the constitution?
The Founders wanted the Bill of Rights to make sure basic individual freedoms were protected, but what about larger societal phenomena? Those need protecting too.

Insider July 16, 2008 at 1:55 pm

Great letter ! I'm putting it in my archives.

Dr. T July 16, 2008 at 7:57 pm

So it's no surprise that governments with vast powers routinely behave stupidly: they are attempting to do the impossible while being overseen by the ill-informed.

I agree with your statement, though you are too nice to the government. I would change the sentence ending to: "… ill-informed, incompetent, and power-hungry."

Sam Grove July 17, 2008 at 1:12 am

"Stupidity and the State"

Isn't that a bit redundant?

ettubloge July 17, 2008 at 9:23 am

What you state is apparent to most "regular" people who are modest and thoughtful: they recognize their inability to solve such complex problems with public policy recommendations. Unfortunately, they make the mistake of thinking that their deficit is not shared by the politicians (mostly due to the politicians' bold assertions that they can solve these issues). They cede to those politicians the power to devise grandiose public policy, they do little to try to understand what it is the politicians have devised and accept the politicians' explanations of why the public policy failed. That paves the way for the next policy. And the next.

vidyohs July 17, 2008 at 10:32 am

Good post ettubloge,

If I may add to this "That paves the way for the next policy, and the next"; Inevitably the "next" is a tweaking (variation) of what just failed. This tweaking is supposedly the magic that will fix it but since it is still based upon what failed, it too is doomed to fail. Or, the politicians create a new policy while not canceling the failed policy, either way we live with the failure like an Albatross hung around our collective necks.

The curious thing is that the politicians can see the failure, though reluctant to admit it, they know that their tweaking is extremely unlikely to do anything but keep the public at bay for awhile; yet it never occurs to them or the public that has hopes in the policy that perhaps a little honest thought would show that the policy should never have been enacted in the first place. Therefore, the only real cure is to cancel the policy and every offshoot of it completely. That they will never do.

"A real tax burden of $5.2 trillion to pay for a $1.65 trillion benefit seems a bit excessive, even by Washington standards. Perhaps one of the presidential candidates should do the voters the courtesy of at least telling them the truth, and asking them if they really want quite so much government at such a high price. Then again, maybe the voters already sense the truth, and perhaps that is why they are so furious."

That final paragraph of the linked article is exactly why I have withdrawn my voluntary particiapation in any tax scheme I can avoid. If I don't give it to them, they can't squander it.

I am doing my part for freedom.

Scott Anderson July 17, 2008 at 1:40 pm

My intuition is that the Hayekian emergent order in society is a good description how the world works, regardless of government tinkering. Society seems to flow like water to the point of least resistance. Society would likely flow in a way that optimizes towards the immediate values of citizens if government action (the institutionalization of a subset of society) did not create barriers and imperfections that molds how society emerges.

That being said, government plays a very neccessary role in creating laws, enforcing laws and defending laws that protect rights. This is a very different role from legislating action, particularily the kind that favors one group over another.

I say that this is an intuitiion because I do not have any empircal knowledge of these complex processes and their results. Maybe the complexity is itself the argument againts legislated action as aposed to protection.

vidyohs July 17, 2008 at 9:02 pm

That being said, government plays a very neccessary role in creating laws, enforcing laws and defending laws that protect rights.
Posted by: Scott Anderson | Jul 17, 2008 1:40:12 PM

Yes sir, I agree with you. However the question remains, what is the least intrusive government that would satisfy that role?

Are we better off if the government is remote from the people involved in a situation, or are we better off if the government is close and intimate with the people involved?

I would suggest that with our Federal government usurping every single nit picking detail of regimenting our lives, we are up shit creek without a paddle and they are trying to take the canoe away from us.

Previous post:

Next post: