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Quotation of the Day…

… is from page 52 of the original edition of Walter Lippmann’s sometimes flawed but deeply insightful and important 1937 book, The Good Society (footnote deleted):

A political providence is necessarily a jealous god – how jealous will depend upon how far the state is impelled to go in directing the social order. Of course, the average humane collectivist does not wish to go all the way to the totalitarian state. He does not wish to go too fast or too violently to the point at which he would like to stop. That does not alter the fact that he has embraced a principle of social organization which has no other remedy for evil except to intensify overhead government by officials.

DBx: Proponents of industrial policy ignore this reality. They tell themselves and others that their schemes aren’t subject to the knowledge problem that was identified by Ludwig von Mises and F.A. Hayek – and later elaborated by Don Lavoie – that dooms attempts at full-on socialism. (They simply ignore Lavoie’s brilliant application of the knowledge problem to industrial policy.) But they are mistaken. Industrial policy aims to achieve pre-conceived concrete results different from those that would be achieved under free markets. To achieve these pre-conceived concrete results requires that the plans of countless individuals be obstructed. There is simply no way for industrial-policy planners to know what will be the systemwide consequences of obstructing these plans. Furthermore, both because individuals are prone to try to work around such obstructions (in ways the details of which are impossible to foresee), and because the sages who design industrial policy cannot know what will be sacrificed as a result of the pursuit of their pre-conceived concrete results, the concrete outcomes of industrial policy will never fully be what its planners pre-conceived. In pursuit of better fulfillment of the industrial-policymakers’ dreams, the industrial-policy scheme will have to be amended. (The “rampaging presumptions” that motivate industrial-policy proponents will, as a practical matter, not allow these proponents to abandon industrial policy and let individuals be.) Industrial policy will be amended, imposing upon the masses greater controls.

Until and unless industrial-policy proponents are removed by public opinion or political change from their positions of influence, this interventionist rot will snowball.

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