Wednesday, April 01, 2009

Cafe Hayek: Social Engineering Vs. Piecemeal, Competitive Creation

I was attracted to economics for a reason quite the opposite of the one that appealed to Mr. Krugman, namely, because it helps explain how incalculably complex and productive social orders emerge from billions of individual actions, where no one of these actions is meant to achieve anything more than improvement in the welfare of the individual actor. This type of economics - associated most famously with Adam Smith - teaches that it is hubris of the most extreme sort to imagine that problems can be solved by pushing buttons. Social-engineer wannabes such as Mr. Krugman might mean well, but they are dangerous; they suffer from what another Nobel laureate economist, F.A. Hayek, called "the fatal conceit."

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