Bonus Quotation of the Day…

by Don Boudreaux on May 9, 2015

in Curious Task, Hubris and humility

… is from page 90 of the 5th edition (2015) of Thomas Sowell’s Basic Economics:

Industry and commerce are not just a matter of routine management, with profits rolling in more or less automatically.  Masses of ever-changing details,within an ever-changing surrounding economic and social environment, mean that the threat of losses hangs over even the biggest and most successful businesses.  There is a reason why business executives usually work far longer hours than their employees, and why only 35 percent of new companies survive for ten year.  Only from the outside does it look easy.

Much of the criticism and hostility leveled at successful entrepreneurs and firms is premised on the mistaken notion that managing a business is routine and rather easy work – routines and work-effort so ‘easy’ and transparent that these routines and efforts can be appropriately and productively second-guessed by outsiders such as politicians, bureaucrats, ‘consumer advocates,’ ‘labor representatives,’ ‘community organizers,’ and all manner of PhD-sporting academics.  Such itching-to-intervene people regularly assert that this business practice, that financial arrangement, these contractual agreements, and those marketing procedures are inefficient, wasteful, ‘wrong,’ or otherwise socially unjustified.  Yet when it is suggested to those who officiously issue their complaints or outside assessments that they themselves enter the market to compete against the practices and arrangements that they so confidently proclaim to be inefficient, they rear back on their haunches and object with hot indignation: “How dare you suggest such a thing!  We don’t have the skills or knowledge or aptitudes to actually do enterprise!  We specialize only in criticizing it from afar, with nothing seriously at stake!”

Such people are not only insufferably arrogant but – as judged by their actions (although not by their clever words) – also are remarkably ignorant about much of what they claim to be expert in.  They know so little that they don’t even know that there exists a deep, vast, and turbulent pool of intricately detailed information and knowledge relevant to each of the myriad private-sector practices, firms, industries, and contractual arrangements about which, in their ignorance, they profess to be ‘experts.’

….

The theory seems to be that we are to trust less the judgment of those who put their own resources at stake when making business decisions, and trust more the judgment of academic or government ‘experts’ who, putting nothing of their own at stake in such ventures (and, indeed, explicitly protesting that they personally have no ability to do so with any prospect of success), put at stake only resources commandeered from other people as they – these ‘experts’ – second-guess the judgment of those who actually do put their own resources at stake.  (Acceptance of this strange theory is considered in most polite circles today to be “progressive.”  In fact, acceptance of this strange theory is profoundly irrational.)

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