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Quotation of the Day…

… is from page 117 of University of Connecticut economist Richard Langlois’s monumental 2023 study, The Corporation and the Twentieth Century (footnote deleted):

The Priority Division [of the U.S. government’s War Industries Board during WWI] immediately slammed into the hard reality that allocating resources through a priority system is impossible, even in wartime when everything can be measured in principle against a single unified objective. The division could never possess the kind of detailed knowledge necessary to understand the first-order implications let alone the higher-order ramifications of its decisions.

DBx: No economy of more than a few dozen persons can hope to perform adequately if individuals on the spot, each with his or her own unique vantage point about resource availabilities and opportunities (and also, of course, his or her own preferences and goals), is not allowed wide scope to act in whatever peaceful ways he or she sees fit in response to his or her unique knowledge. The dispersed bits of knowledge that are acted upon, as Hayek emphasized, are not given and cannot be given to any single mind or computer – so all talk of A.I. being able to replace markets and market prices is deeply mistaken.

Full-on socialists, democratic socialists, and advocates of industrial policy refuse to accept this reality. All such opponents of the market order think of resource allocation as a relatively simple process. None of these people begin to appreciate just how unfathomably complex is the array of economic arrangements and processes that they propose to re-engineer to better suit their personal preferences, or – with no small measure of presumptuousness – to better suit what they assume are the personal preferences of millions of strangers.

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