The Pretence of Knowledge
9th December 2024
Concerning the big decisions in the economic realm, we are in a somewhat better situation than national security analysts and policy-makers. Although certainty about possession of the truth remains beyond human reach, although the exact instrumental value of economic freedom and property rights for prosperity and economic growth remains debatable, we do know something. Adam Smith has taught us that the hope to acquire property is an important incentive for eliciting work effort. Ludwig von Mises has added that we need private property rights in land, factories, and enterprises for scarcity prices and a rational allocation of resources to apply. Finally, Friedrich August von Hayek added that the exploitation of human knowledge requires decentralized decision-making. Together these arguments imply that central planning is a road to misery.