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Bonus Quotation of the Day…

… is from page 143 of Liberty Fund’s excellent 1993 collection of some of the writings of H.B. Acton (1908-1974), The Morals of Markets and Related Essays (David Gordon & Jeremy Shearmur, eds.):

[S]cientific and technological discoveries have considerable effects on the development of society. It follows that societies in which scientific and technological discovery is particularly frequent must be societies in which predictions of their future condition is particularly hazardous. Our society is certainly such a society….

DBx: Who can doubt the truth of this observation?

And yet, all calls for industrial policy – being calls for government to pick industrial ‘winners’ (and, hence, calls also for government to arrange for other firms and industries artificially to become losers) – disregard the truth of the above observation.

The assumption made by industrial-policy advocates seems to be this: Under industrial policy, discovery of new knowledge will continue apace (or at an even quicker pace!), yet none of these discoveries will disrupt the industrial-policy plan. The plan – its advocates apparently suppose – will be drawn and administered with such genius that all new worthwhile discoveries will be incorporated seamlessly into the plan in ways that only make the plan stronger and an even better method of allocating scarce resources than competitive markets. Beneficial change of the sort that we have in markets will continue.

Furthermore, not only will this change continue, it will do so without any of the downsides of change; the “destruction” in “creative destruction” will be eliminated without affecting the “creative.” Indeed, matters get even better: Beneficial discoveries and change will be incorporated so smoothly into the industrial-policy plan that these discoveries and changes will appear in retrospect to have been anticipated in adequate detail by the plan’s genius designers.

Yeah. That makes sense.


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