… is from page 184 of F.A. Hayek’s 1938 essay “Freedom and the Economic System,” which is reprinted as chapter eight of the 1997 collection, edited by Bruce Caldwell, Socialism and War:
That the increasing discredit into which democratic government has fallen is due to democracy having been burdened with tasks for which it is not suited is a fact of the greatest importance which has not yet received adequate recognition. Yet the fundamental position is simply that the probability of agreement of a substantial portion of the population upon a particular course of action decreases as the scope of State activity expands.
Although this quotation is nearly 80 years old, and despite its point being featured prominently in Hayek‘s best-selling 1944 book, The Road to Serfdom, this insight still “has not yet received adequate recognition.” Many of the same pundits and professors who would justifiably criticize a private greeting-card company for expanding into the production of steel simply because a majority of its shareholders clamor for such an expansion of the company’s tasks* themselves clamor for the state to take on an ever-expanding set of unrelated tasks. These pundits and professors – and the politicians whom they cheer – pay attention neither to the capacity of the state to perform myriad different and often-conflicting functions nor to the practical impossibility of securing widespread and meaningful agreement of the people about how these different functions should be ranked and weighted in importance and on the specifics of how these functions should be carried out.
The assumption made by the pundits and professors appears to be very much like the assumption made by people who pray to god for desired outcomes: god is all-knowing, all-powerful, and all-good; simply request from god a desirable set of outcomes and then trust that god will achieve these outcomes in the best manner possible. But regardless of your theology, the human beings who are the state are not gods (although judging from many of their proclamations they want you to believe that they possess something approaching god-like information, wisdom, power, and goodness). (Indeed, the lust for power that politicians today must possess in order to succeed in politics makes most of these individuals more akin to devils than beatific gods. But that’s a different subject.)
Thomas Leonard’s Illiberal Reformers (which usefully covers some of the same ground that I first toured when I read Arthur Ekirch’s The Decline of American Liberalism  and Progressivism in America , and then later Robert Higgs’s Crisis and Leviathan ) makes clear that American “Progressives” of a hundred or so years ago ‘solved’ the problem of securing widespread agreement on what government should do and how government should do it simply by assuming that such agreement isn’t needed. The “Progressives” themselves – self-anointed “experts” on the economy and society – fancied that they knew what the People should get from the state and these “Progressives” were naively confident in their ability to ensure that the state would do their bidding in the same way that a well-constructed chop saw or kitchen blender does the bidding of its operator.
The more one learns about the history of “Progressivism” and of the personalities and vanities of “Progressives,” the more one is astonished not only at “Progressives'” boundless arrogance but also at their utterly irrational and romantic ideas – ideas whose irrationality and foolish romance were cleverly hidden behind “Progressives'” boasts about their commitment to science.
* That we seldom see private firms expand and diversify so thoughtlessly and unwisely is due to the fact that shareholders and creditors of firms have their own funds at stake. This ‘skin-in-the-game’ fosters prudence and good sense – prudence and good sense that are absent when, through politics, everyone spends everyone else’s money.