One of the primary talking points of Mr Obama’s campaign is that what is needed (as a change) are “smart” policies. But there is a fundamental problem with that, it’s wrong. Let’s start with this quote which is in line with what I’m trying to say:

America’s regulatory structure is mostly the child of the Progressive Era, when well meaning, well educated protestants thought that they could save the world by putting bright technocrats from the right kind of families in charge of the messy, sprawling economy and make it clean and tidy and safe.  That sounds sarcastic, but it wasn’t entirely unreasonable. The first great victory of the Progressive Era, the major revolutions in public health, did just that:  made life safer and nicer for everyone, with minimal inconvenience, by putting experts in charge of things like sanitation and quarantine and the water supply.  Before Hayek, we didn’t have all that much reason to think that this feat couldn’t be repeated elsewhere.

But now we have had Hayek, and the failure of the Soviet Union, and a hundred other ways to learn that in any sizeable economy, the information problem is simply too big.  Even leaving out the various incentive problems ably detailed by both Marxists and public choice economics, a well-intentioned bureaucrat cannot know enough about what’s going on in the world to thoroughly manage even a static economy, much less one that has to cope with millions of constant changes, from hurricanes to new babies.

In the context of the current financial kerfuffle, an oft noted claim has been that what is needed is “better smarter regulation.” As if that will somehow so fundamentally change the market structure so that risk will not be taken and occasionally those risk takers will overreach. Economic and social management cannot be done by “being smarter” as the complexity the problem means it is intractable. The only solution is to yield control. The setting of policy has to be done by the millions not by the hundreds of experts. Individually those experts may be nominally smarter than a great majority (but likely not all) of the millions for whom their decisions are replacing. But the complexity of modern society means the problems and issues cannot be comprehended by any single or group of experts no matter how smart they are.

What is not needed is an Executive who believes he can either by himself or a counciliar consensus of “experts” figure out the “solution” to the problems that will face him. This is exactly the opposite of what we need. We don’t need a smart leader who thinks (or knows) he’s smart and is seeking an inteligent solution. We need a wise leader who knows he isn’t smart and the best he can do is to suggest a direction and perceptive enough to notice which of us have figured out a “better way” and pass the word.

Filed under: DemocratsMark O.Politics

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