Americans live in a complex world. That has made those who argue for ever-growing statism to often claim that “the more complex the society, the more government control we need.” One major reason is that this claim allows them to assert that even if liberty was appropriate in a long-past, simple “horse and buggy” age (as when America began as a country), it cannot possibly be so now.
When I hear such an assertion, the first thing I think of is whether the world we face today really is more complex for us than in the distant past. Regarding how much technology is in use, the world is clearly more complex. However, with regard to how many different skills and abilities someone in that distant past needed to survive, I am not so sure. A single person in the past might have to build their own house, prepare their own land, grow their own crops on this land, hunt their own meat, make their own clothes and shoes, fight off threats to themselves and their property with a flintlock rifle, and so on.
I look at my life in today’s world, and my life seems far simpler. I do have to use some technology in areas related to my job, but I don’t know any of those “horse and buggy” era things as well as a vast range of things that my quality of life today depends on. Yet I get on well because I don’t have to know how to do so much for myself. In our highly interdependent world, I can confidently rely on others who specialize in the skills I have use for but do not possess through markets, at least when governments don’t get in the way. It reminds me of the words of Alfred North Whitehead in his 1911 book An Introduction to Mathematics that “Civilization advances by extending the number of important operations which we can perform without thinking about them.”
Even if I accepted the assertion that we now live more complex lives, it is a non sequitur to conclude that we require more government control as a result. The reason that it is a non sequitur is well-expressed by Leonard Read—creator of the Foundation for Economic Education, who probably spent as much of his life as anyone fighting such fallacies that fueled attacks on liberty—in the article whose title I have reused here, from a 1994 book titled Clichés of Politics, “Unless a person can demonstrate competence at exploding socialistic error, he is not likely to gain wide audiences for his views about the wonders wrought by men who are free.”
Read began that article by quoting an unnamed college president attending a Foundation for Economic Education seminar: “Your free market, private property, limited government theories were all right under the simple conditions of a century or more ago, but surely they are unworkable in today’s complex economy. The more complex the society, the greater the need for government control; that seems axiomatic.”
The response, which Read described as necessary because it is an “oft-heard, plausible, and influential fallacy” that “leads directly and logically to socialistic planning,” is described in just two paragraphs. Consider them below:
Let us take the simplest possible situation—just you and I. Next, let us assume that I am as wise as any president of the United States who has held office during your lifetime. With these qualifications in mind, do you honestly think I would be competent to coercively control what you shall invent, discover, or create, what the hours of your labor shall be, what wage you shall receive, what and with whom you shall associate and exchange? Is not my incompetence demonstrably apparent in this simplest of all societies?
Now let us shift from the simple situation to a more complex society—to all the people in this room. What would you think of my competence to coercively control their creative actions? Or, let us contemplate a really complex situation—the . . . people of this nation. If I were to suggest that I should take over the management of their lives and their billions of exchanges, you would think me the victim of hallucinations. Is it not obvious that the more complex an economy, the more certainly will governmental control of productive effort exert a retarding influence? Obviously, the more complex our economy, the more we should rely on the miraculous, self-adapting processes of men acting freely. No mind of man nor any combination of minds can even envision, let alone intelligently control, the countless human energy exchanges in a simple society, to say nothing of a complex one.
In those two paragraphs, the rebuttal starts from a simple situation, in which one person is clearly not competent to dictate the choices of another. Then the complexity is raised and, with it, the gap between what is needed to be competent enough and what any person or group of persons can know grows ever larger. Also, the case was presented without rancor or hectoring or “I told you so,” in a way that could have a striking personal impact.
It seems to me that Read here does an excellent job of communicating the core of Friedrich von Hayek’s message in his immensely important article “The Use of Knowledge in Society” to someone who would probably never go to the effort to read it, despite its importance to defending liberty.
In a nutshell, the point is that adequately informed economic decision-making requires allowing people to act on the information of “time and place,” the valuable details they know and that others do not. Informed economic decision-making requires allowing people to act on such information that only they possess, communicating the effects to others by way of changing prices. Market exchange is that mechanism. This stands in sharp contrast to central planning, which by its nature throws away a great deal of that valuable information in the process of centralizing it.
At a time when supposedly efficient socialism was widely believed to be the wave of the future, Hayek—particularly with his tin example—showed that all the “ifs” necessary for efficient socialism to occur could not possibly be true because throwing out such valuable information (in fact, a great deal of the valuable information) necessarily threw away wealth. That makes efficient socialism an oxymoron rather than an enticing future.
Just as when Read wrote his short article, there are a great many people who would profit from but would probably never make the investment of time and thought to read something like “The Use of Knowledge in Society” unless first exposed to insights that could motivate that effort. Read’s brief discussion could provide just such motivation. In fact, a great deal of Read’s decades of writing was intended for just that result. That is why it is still worth reading Read, whether for someone who is open-minded enough to begin thinking more carefully about liberty—including economic liberty—or for someone who wants to become better at communicating the powerful case for it to others.