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Bonus Quotation of the Day…

… is from page 198 of Israel Kirzner’s 1984 paper “The Open-Endedness of Knowledge” as this paper is reprinted in Competition, Economic Planning, and the Knowledge Problem (Peter J. Boettke and Frédéric Sautet, eds., 2018), which is a volume in The Collected Works of Israel M. Kirzner:

[K]nowledge is open-ended in the sense that no matter how much we know, this is as nothing compared with what we know that we do not know.

DBx: Indisputably correct. Yet advocates of industrial policy nevertheless offer proposals as if they are not among those of us who know that we do not know.

Industrial-policy advocates believe themselves to have somehow divined, for example, that the financial sector of today’s economy is too large while the sector that produces tangible things is too small. How did these advocates come to possess this knowledge? (And why are they not personally putting their own money at stake in efforts to profit from what is surely – if these advocates are correct – an opportunity for gigantic personal profit?) The answer, of course, is that they in fact know no such thing. They simply leap from the fact that the economy doesn’t look like what they feel it ‘should’ look like to the conclusion that they’ve somehow discovered a profound truth.

Further, how do these advocates know, with sufficient confidence, that their proposed schemes for ‘correcting’ alleged problems such as this one will not create additional problems that will prove to be far worse than the ones they manage to ‘correct’? To read or listen to industrial-policy advocates is invariably to encounter the thoughts of individuals who suppose that the economy is a relatively simple device to which is attached a few handy knobs that can be turned this way or that way in order to bring about predictable results.

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