… is from pages 115-116 of the 2007 Definitive Edition (Bruce Caldwell, Ed.) of F.A. Hayek’s classic 1944 book, The Road to Serfdom; specifically, it’s from chapter 5, which is titled “Planning and Democracy”:
Those most immediately interested in a particular issue are not necessarily the best judges of the interests of society as a whole. To take only the most characteristic case: when capital and labor in an industry agree on some policy of restriction and thus exploit the consumers, there is usually no difficulty about the division of the spoils in proportion to former earnings or on some similar principle. The loss which is divided between thousands or millions is usually either simply disregarded quite inadequately considered.
Randomly pick an offered scheme for improving the economy through tariffs, subsidies, or any other means by which government diverts resources away from the paths these would follow under market signals. You will find in the promotion of that scheme – be it industrial policy as promoted by American Compass, subsidies as marketed and implemented by Biden & Co., or any other such intervention – great attention to the splendid benefits to be reaped by members of particular groups (for example, ‘high-school educated males’ or ‘American producers of microchips’) and virtually no attention given to the consumers who must pay higher prices, the income-earners who must pay higher taxes, the entrepreneurs and firms who are denied the capital they would otherwise have gotten to start or expand businesses, the workers who are denied the jobs and higher wages that would have been made possible but for the government-directed diversion of resources into the protectionist or industrial-policy schemes, and the future generations whose economic well-being is being made worse than otherwise by the consequent reduction in economic growth.
Astonishingly, despite their being the economic equivalent of flat-earthism, such schemes continue to be treated seriously.