Gary Galles explains that placing decisions in government hands moves choices from the relevant experts, with incentives to act on that expertise, to those far less informed, with far less incentive and ability to take real expertise into account. It is the singular virtue of the market that genuine experts rise to the top, and a mark of politics that pseudo-experts rule what they know nothing about. Full Article
Source link: http://blog.mises.org/3597/what-information-overload-can-teach-us/
What Information Overload Can Teach Us
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Warning: Potential philosophical hairiness ahead.
The imperfection of anyone’s knowledge is the lynch pin of my philosophical, political, and economic outlook. It is my opinion that of the infinite ‘knowable’ any one individual can only experience, process, and understand an infinitesimally small portion of it. By working voluntarily around an accepted set of principals, a group MAY succeed better than individuals alone. Conversely, the group may produce less overall than individuals alone when all aspects are considered.
So how do we get coerced by our supposed betters who, afterall, have fairly near the same level of imperfection as anyone else. In the grand scheme, even a person with a 150 IQ is little better than a person with a 100 IQ, at least to the degree that the former can use coercive force on the latter to take his money and property and use it to fund programs that alter their choices in the market or endeavor to alter their behavior.
The coercion is allowed because of the disconnect most people seem to have that others must know more than they do, and are willing to be told what to do. It would appear that a majority of the people have to have something to place their Faith in, something that will provide oblique comfort when they ponder all that they don’t know, or will ever know. They have to have some entity that they believe can control the Great Unknown. The fallacy of course is that no entity, no matter how well constructed, can provide that level of assurance. The fallacy eventually presents itself, and people reject the establishment that embodies it.
When the associations are voluntary, people can move in and out more easily, when the associations are compelled, the breakaway requires much more force. Leaving a place of employment is fairly easy, rejecting the political structure typically requires revolution, many times bloody.
Excellent article. One additional point I might make is that people are often “experts” simply because they are at a particular time and place and can observe circumstances directly and respond to them. While anybody in the same situation would also be an “expert”, only the person on the spot actually is. A cashier, for example, can know instant information about the customer they’re servng that the manager who’s back in the office cannot. Being a cashier does not require unique, highly specialized skills, practically anybody can do it, but being the cashier on the spot confers unique information that nobody else has.
Another point that could be made is that while the market system provides unique information, this information is imprecise, because, as the article points out, the reasons for the information is not passed on. Some might legitimately argue that this is a flaw or weakness of the system. But the question then becomes: what are the alternatives? Central decision-making, especially by the government, distorts the information, even if we assume that the reasons could somehow be available to them.
The market process can be improved, but there are no alternatives short of omniscience that are better than the market.
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