Progressives and the knowledge problem

Glenn Reynolds (AKA Instapundit) has a great piece over at the Washington Examiner about progressives and their “knowledge problem.” He draws heavily from Hayek (more here) in explaining that progressives cannot possibly make their system of government (socialism) work because of a knowledge problem.

In his “The Use of Knowledge In Society,” Hayek explained that information about supply and demand, scarcity and abundance, wants and needs exists in no single place in any economy. The economy is simply too large and complicated for such information to be gathered together.

Any economic planner who attempts to do so will wind up hopelessly uninformed and behind the times, reacting to economic changes in a clumsy, too-late fashion and then being forced to react again to fix the problems that the previous mistakes created, leading to new problems, and so on.

Market mechanisms, like pricing, do a better job than planners because they incorporate what everyone knows indirectly through signals like price, without central planning.

Thus, no matter how deceptively simple and appealing command economy programs are, they are sure to trip up their operators, because the operators can’t possibly be smart enough to make them work.

And this is where our country is headed. We have a president and a majority in congress who believe that America is great because of government. They are pushing hard, despite the will of the majority of citizens, to make government bigger and more intrusive. The people however, as evidenced by movements like the TEA Party, are beginning to push back.

The bad news is obvious: We’re governed not just by people who do screw up constantly, but by people who can’t help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or “better” rules will do any good: Incompetence is built into the system.

The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don’t know what they’re doing.

If that doesn’t encourage skepticism toward big government, it’s hard to imagine what will.

Read the whole thing…

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