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Quotation of the Day…

Posted By Don Boudreaux On December 3, 2012 @ 8:37 am In Complexity & Emergence,Curious Task,Hayek,Hubris and humility,Man of System,Scientism,State of Macro | Comments Disabled

… is from page 103 of Thomas Sowell’s monumental 1980 volume, Knowledge and Decisions [1] (original emphasis):

Rationalism is at one end of a spectrum with evolutionism at the other.  The evolutionary process sees the determining rationality in a process - unarticulated in whole (animals) or in part (humans) – not in the individuals involved in the process.  From this viewpoint, the evolutionary process is no less powerful in its effects for being undiscovered or unplanned.  This applies not only to biological evolution but to social processes as well.  People have articulated intentions, but history is not a record of those intentions being realized so much as it is a record of entirely different things happening as a net result of innumerable strivings toward mutually incompatible goals….  In short, intentions must, at the very least, compete with powerful nonintentional forces.

What Hayek called “the fatal conceit [2]” – a conceit especially prevalent among the professoriate, the punditry, and politicians – continues to plague modern society with its false promise of very smart and unnaturally well-meaning people consciously controlling great economic, social, and cultural forces as a pilot controls an airplane’s pitch, roll, and yaw by consciously manipulating the plane’s steering device.

In fact, though, a modern economy and society are incalculably more complex than even the most technologically advanced airplane.  And while our best theories (from formal models to useful stories [3]) of the functioning of a modern economy do indeed offer invaluable insights into the ‘logic’ and interconnections that are the stuff of a modern economy, an error far too often committed is to mistake mastery of a theory for godlike understanding of, and control over, the detail-rich reality that that theory aims to explain.

A key feature of all the best economic theories is a structure, reach, and ‘tone’ that conveys the inherent complexities of economic reality and, as such, guards those who use them from fantasizing that those theories are miraculous intellectual vessels that, when uncorked, bestow upon the anointed [4] superhuman powers to consciously guide or nudge [5] society to happier states.  (Do note: the fact that a theory might be complex does not mean that that theory adequately captures the complexity of the underlying reality that it is supposed to explain.)

Government, while it can indeed be (as it has been so often [6]) a wrecking ball, is not and can never be an effective steering device – for the complex and unplanned social orders that are modern successful societies are by their very nature not machines to be steered.

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[1] Knowledge and Decisions: http://www.amazon.com/Knowledge-Decisions-Thomas-Sowell/dp/0465037380/ref=sr_1_13?s=books&ie=UTF8&qid=1354541313&sr=1-13

[2] the fatal conceit: http://www.amazon.com/The-Fatal-Conceit-Socialism-Collected/dp/0226320669/ref=sr_1_1?s=books&ie=UTF8&qid=1332499031&sr=1-1

[3] from formal models to useful stories: http://www.amazon.com/Rhetoric-Economics-Human-Sciences/dp/0299158144/ref=la_B001ITVIAI_1_6?ie=UTF8&qid=1354542414&sr=1-6

[4] anointed: http://www.amazon.com/Vision-Anointed-Self-Congratulation-Social-Policy/dp/046508995X/ref=sr_1_8?s=books&ie=UTF8&qid=1354542071&sr=1-8

[5] nudge: http://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/014311526X/ref=sr_1_1?s=books&ie=UTF8&qid=1354542472&sr=1-1&keywords=thaler+sunstein

[6] as it has been so often: http://www.independent.org/publications/tir/article.asp?a=430

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