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The Illusion of Understanding and Control

Cafe patron Ned Morris e-mails to request that I re-post the following quotation from pages 105-106 of Walter Lippmann’s 1937 volume, The Good Society.  Although I posted this passage as a “Quotation of the Day” only three months ago, it’s such an important point, and one typically overlooked, that I’m happy to grant Ned’s request.  Here’s Lippmann (emphasis added):

Though it is disguised by the illusion that a bureaucracy accountable to a majority of voters, and susceptible to the pressure of organized minorities, is not exercising compulsion, it is evident that the more varied and comprehensive the regulation becomes, the more the state becomes a despotic power as against the individual.  For the fragment of control over the government which he exercises through his vote is in no effective sense proportionate to the authority exercised over him by the government.

A complementary point is this Hayekian one that I made in a letter to the editor of the Wall Street Journal back in 2008:

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