Worse than ignorance

"The man of system," wrote Adam Smith, "is apt to be very wise to his own conceit. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board." History reminds us in very painful ways not to listen to imposters who promise to liberate us from our economic chains by socializing either the means of production or the finished products. Those that seek to plan and control our investment on a national level or to mandate the "proper" ways of enjoying the fruits of our labor are only marginally better that the full-blown socialists.

In his State of the Union address, President Obama paid lip service to private entrepreneurship. Unfortunately, most of his proposals lead---intentionally or not---to an expansion of the role of government bureaucracy in our personal affairs. That is the reason why his kind words and promises addressed to "small businesses" do not inspire much enthusiasm. The president, his advisors, and many of his supporters are victims of an old "misconception about the nature of the economic problem of society." As Friedrich Hayek explained during the rise of Keynesian "macro" management, it is not about allocation of "given" resources, since such mathematical data would never be "given" to a single mind or a body of experts. The fundamental problem is one of securing "the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know."

Our government has already done enough damage stimulating the last housing bubble. Before they take more of our children's money to extend a helping hand to businesses, big or small, they should perhaps take a minute to ponder the words of Marquis d'Argenson:

"Our speculative thinkers . . . want to direct commerce by their orders and regulations; but to do this one would need to be thoroughly acquainted with the interests involved in commerce . . . from one individual to another. In the absence of such knowledge, it [economic intervention] can only be . . . much worse than ignorance in its bad effects. . . . Therefore, laissez-faire!"