Direction v spontaneous order

Paul Krugman writes:

So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly.

Boyes and I have discussed the work of Smith, Hayek, Sowell on this blog as they attempt to understand two key processes: the emergent, evolutionary spontaneous process that generates an unintended order and the point of view of planners, elites, intelligensia that oppose this process and argue instead for centralized planning.

In his March 6, 2011 NY Times editiorial Nobel winner Paul Krugman succinctly presents this latter point of view.

This confident assertion of the ability of "we" to direct the building of society is an accelerating perspective - it is articulated by the right and the left, republican and democrat and the increasing level of divisiveness in the public discourse centers not on this fundamental view about how society should develop, but rather on who should be in charge of the direction and which vision or blueprint should be imposed.

In language that captures Krugman's perspective, Higgs does two things in this review: first he captures the underlying hubris in a clear and incisive manner. This positive outcomes is offset by the unfortunate rhetoric - labelling planners as fools may be accurate but it cannot meaningfully advance the debate.


Bob Higgs reviews Derek Leebaert’s Magic and Mayhem: The Delusions of American Foreign Policy from Korea to Afghanistan.

Leebaert focuses on several dimensions of what he calls the foreign policy makers’ reliance on “magic” ― a collection of assumptions and convictions about what the United States government can and should do in its dealings with the rest of the world. He calls it magic, he explains .. because “shrewd, levelheaded people are so frequently bewitched into substituting passion, sloganeering, and haste for reflection, homework, and reasonable objectives.” As Leebaert illustrates with a great variety of cases, decision makers forgo careful study, detailed, factual evaluation, and judicious evaluation of alternatives (including the alternative of doing nothing) and instead opt for plunging almost blindly into efforts that almost any serious, informed thinker could have told them were doomed to fail.

They are supremely self-confident, notwithstanding their all-too-frequent lack of any real basis for such confidence.
This clear confidence by the intelligensia as they approach planning or directing in society in the face of complexity in human behavior is hubris. It is clear that attempts to shape and direct a complex phenomenon that is our social order will generate unintended consequences. In fact, all action generates unintended outcomes and the individual operating in a system of natural liberty can more quickly and responsibly react and respond to these consequences than can the central planner or director.

Higgs goes on in his review:



Such decision making almost always represents the work of what Leebaert calls “emergency men”―”the clever, energetic, self-assured, well-schooled people who take advantage of the opportunities intrinsic to the American political system to trifle with enormous risk” (p. 5) ….

The image of the emergency man evokes Smith's man of system - attempting to move men like pieces on a chess board. The use of emergence man includes in this metaphor Higg's well known analysis of the role that crisis plays in expanding government or state activity at the expense of private or individual space.

Emergency men tend to make a hash of matters for a variety of reasons, and Leebaert devotes the heart of his book to an elaboration of a half dozen chronic problems along these lines. He identifies these categories in the introduction:

1. A sensation of urgency and of “crisis” that accompanies the belief that most any resolute action is superior to restraint … joined by the emergency man’s eagerness to be his country’s revealer of dangers, real and imaginary.
2. The faith that American-style business management … can fix any global problem given enough time, resources, and appropriately “can-do,” businesslike zeal.
3. A distinctively American desire to fall in behind celebrities, stars, and peddlers of some newly distilled expertise who, in foreign affairs especially, seem to glow with wizardry.
4. An expectation of wondrous returns on investment, even when this is based on intellectual shortcuts.
5. Conjuring powerful, but simplified images from the depths of “history” to rationalize huge and amorphously expanding objectives.
6. The repeated belief that America can shape the destiny of other countries overnight and that the hearts and minds of distant people are throbbing to be transformed into something akin to the way we see ourselves. (pp. 7-8)

…. Leebaert’s approach to criticizing U.S. defense and foreign policies bears an interesting similarity to the criticisms Ludwig von Mises and F. A. Hayek leveled against socialism. These famous Austrian economists never criticized the socialists as bad people or as people who sought to act in a way that would harm the general public. They invariably gave their socialist ideological opponents the benefit of the doubt with regard to their good intentions. Although this approach has a certain theoretical justification in the development of economic theory, it flies in the face of historical reality. Many leading socialists, especially but by no means exclusively in the USSR, were little short of fiendish. It strains credulity to suppose that they were simply misguided men of good will.

Likewise, much of what seems merely foolish to Leebaert strikes me as the result, not of faulty thinking about policies and their likely consequences, but of the desire for political power and personal aggrandizement and of ideological and political motives that will not bear scrutiny. About such possibilities Leebaert has little .. to say. In his view, it appears that the emergency men have been good men who allowed themselves to be seduced by “magical” thinking, when they should have gone about their business in a more rational, deliberate, and evidence-based manner. He therefore thinks that a book such as his might well serve to educate policy makers, leading them to abandon magic and to adopt a sounder approach to making their decisions. In this regard, I believe he has slipped into wishful thinking as much as did many of the foreign policy makers he so aptly criticizes.

Whenever we try to understand why policy makers act as they do, we must answer the question: Are they fools or charlatans? Leebaert concludes, in effect, that in the defense and foreign policy realm, they are often fools. I am inclined to the conclusion that they are both.