Culture Making is now archived. Enjoy five years of reflections on culture worth celebrating.
For more about the book and Andy Crouch, please visit andy-crouch.com.

Posts tagged f a hayek

Andy:
from "Frodo in a World of Boromirs," by Kurt Luchs, FIRST THINGS: On the Square, 27 October 2008

It is no longer shameful to lust after power so long as one lusts for the good of the people. In the words of Boromir, speaking of the One Ring, “For you seem to think of its power only in the hands of the enemy: of its evil uses not of its good.” The only rejoinder, in Frodo’s words to Boromir, is that “we cannot use it, and what is done with it turns to evil.” Yes, it’s that simple. And as you ascend the levels of authority, from city to state to nation, it only becomes more true.

There are several reasons. One, already alluded to, is the corruption of power. No matter for what noble ends power may be sought, at some point it always becomes an end in itself, and then the jig is up . . . but the power and its abuses live on. This is why even the most flagrantly failed government programs are nearly impossible to kill.

Another reason that centralized government social engineering simply doesn’t work is what F.A. Hayek called “the knowledge problem.” Hayek was the only Austrian economist ever to win a Nobel Prize. He won it partly for a brief essay called “The Use of Knowledge in Society,” in which he explained that government is intrinsically helpless before most social and economic problems because the knowledge needed to solve them is too widely dispersed among the members of society. It cannot ever be made known in a timely fashion to a central authority, and even if it could, that authority would lack the godlike coordinating ability needed to use that knowledge effectively. Adding to the difficulty, much of this knowledge is tacit knowledge, not consciously known or articulated by the individuals who have it.

What can make effective use of the knowledge distributed locally among the members of society? Only the free market system and its accompanying structure of voluntary trades and changing prices. Freely determined market prices are what send signals to individuals telling them how to best use their unique knowledge to their own, and ultimately society’s, advantage. Without a free market, the only way to allocate resources is by government fiat–a few, far-removed individuals making choices for us all, perhaps with the best of intentions but in near-total ignorance.