Quotation of the Day…

by Don Boudreaux on May 11, 2023

in Hayek, Hubris and humility, Seen and Unseen

… is from page 527 of F.A. Hayek’s brilliant Postscript – “Why I Am Not a Conservative” – to the Definitive Edition (Ronald Hamowy, ed., 2011) of Hayek’s 1960 volume, The Constitution of Liberty:

[I]t is this nationalistic bias which frequently provides the bridge from conservatism to collectivism: to think in terms of “our” industry or resource is only a short step away from demanding that these national assets be directed in the national interest.

DBx: Indisputably so.

With different notions of just what is, and what best serves, ‘the national interest,’ people such as Oren Cass and Marco Rubio of course disagree with people such as Robert Reich and Elizabeth Warren on many details of how and why government should intervene into peaceful individuals’ private and commercial affairs. But the essence of the interventions proposed by the Casses and Rubios of the world is identical to that of the proposed interventions of the Reichs and Warrens: Both are collectivist. Each of these persons distrusts market forces while trusting that government officials with the power to allocate resources by diktat will ‘get things right,’ or at least consistently enough outperform the market.

Yet none of these people – not Cass, not Rubio, not Reich, not Warren, not any of their followers, fans, or fellow travelers – can tell us where the government officials given the power to allocate resources in contradiction of market signals will get the information necessary to ensure that these officials’ allocation choices will redound over time to the net benefit of the people of the country. Each of these industrial-policy advocates simply identifies various imperfections – sometimes real, sometimes merely the cost-side of inescapable trade-offs, sometimes a mere distaste for other people’s preferences, and sometimes wholly imaginary – and then leaps to the conclusion that if government officials are given the power to ‘address’ these’ imperfections’ these officials will do so not only apolitically but with enough information to ensure that these ‘imperfections’ are ‘corrected’ and in a manner that will yield net benefits to the people at large.

That’s it. No further explanation is offered. It’s truly as if advocates of industrial policy pray to the god called ‘Government,’ confident in their faith that their god will do their bidding if only enough of their fellow citizens join them in their prayers.

The naïveté is stunning – and scary.

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