Wednesday, March 10, 2010

What can people accomplish without Gov't help?

“Economics has from its origins been concerned with how an extended order of human interaction comes into existence through a process of winnowing and sifting far surpassing our vision or capacity to design. Adam Smith was the first to perceive that we have stumbled upon methods of ordering human economic cooperation that exceed the limits of our knowledge and perception.” - “Between Instinct and Reason” by F.A. Hayek, published in the book The Fatal Conceit.

The free market is an organic, self-organizing and self-regulating system that evolves without conscious design. It becomes a system of complexity and richness that exceeds human ability to comprehend.

Conservatives see a system whose interactions are only partially understood; where the effects of changes cannot be fully anticipated so change should be cautious, incremental, and quickly reversed if adverse consequences appear.

Progressives see a complex and confusing system with features they don’t like. Progressivism holds that human ingenuity can eliminate the confusion, manage the complexity, add desirable features and eliminate the undesirable ones. If adverse consequences crop up, keep plowing ahead confident that those in charge will work it all out. If things really don’t work out, bad people are to blame (Manichaeism).

The difference is design versus evolution. Also, humility versus hubris: Progressives seem to believe “if we don’t understand it, it doesn’t make sense and we can do better.” Imagine that kind of thinking being used to design a biologic ecosystem. Yet Progressives are convinced they can design a proper economic ecosystem. Our current President being one of the chief designers.

The Conservative view is that past generations were no less intelligent than we are so their discoveries and the systems they devised (usually by trial and error) ought not be changed willy-nilly just because some intellectual is convinced he has realized something nobody else ever thought of. (Most of the Progressive social and economic programs consist of redoing forgotten experiments – forgotten because the results were bad.)

An example

What can be accomplished by people without Ivy League degrees? Consider the tusk shell or dentalia. Dentalia are the hollow shells of scaphopod mollusks. Long before Columbus was born, these tusk shells were harvested from deep waters off Vancouver Island, Queen Charlotte Islands, and north along the coast to Sitka, Alaska. According to the Wikipedia entry, tusk shells were traded into the American Southwest, the Great Plains, Alaska, and Central Canada for turquoise from the Southwest, Macaw feathers from Central America, and various dies, hides, and foodstuffs.

Imagine that: illiterate savages running a free market system covering North America west of the Mississippi, from Central America to Alaska and Canada – without a government official or Harvard lawyer anywhere in sight to tell them how to do it. Not only that, the people figured out how to harvest these shells from sands beneath more than thirty feet of frigid water – without a Department of Technology Assessment or a Small Business Administration loan.

An extended order of human interaction – an elaborate system of trade complete with a currency (the dentalia) - spontaneously developed and operated organically without any educated elite to design and guide it.

Tribes who didn’t know there WAS a Pacific Ocean were trading for Pacific Ocean shells. Peoples at war with each other still managed to trade with each other. Free markets can accomplish these things without government oversight.

It’s amazing what people accomplish when given liberty. It must confound the Progressive mind.

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