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Asimov, Krugman, Hayek, Popper, Plato: All Together



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You know, this actually explains something important, and, yes, I am serious. Paul Krugman writes in re: Isaac Asimov:

Asimov, and specifically the Foundation trilogy, was my great inspiration; I became an economist because I wanted to be a psychohistorian, saving civilization through the mathematics of human behavior.

The psychohistorians use mathematical models to predict the course of human civilization, and the founder of the science of psychohistory, Prof. Hari Seldon, takes on a kind of godlike role in guiding human history. Of particular interest are what are known as “Seldon crises,” which, as Wikipedia sums it up, “are part of the field of psychohistory, and refer to a social and political situation that, to be successfully surmounted, would eventually leave only one possible, inevitable, course of action.” One unique solution to a sociopolitical problem, determined with mathematical precision by a very powerful professor with friends in government. Talk about your fatal conceits!

On Earth, unhappy wretches that we are, we must labor under constraints. In politics, one of the most important of those constraints is the “knowledge problem” articulated by Mises and Hayek: Even the smartest, most motivated, best-intentioned bureaucrats cannot plan complex human undertakings—such as the workings of the economy, or subsectors of the economy—because they do not and cannot have access to data sufficient to make those decisions, the data being too complex and in constant flux. (Question: If governments actually know how to macromanage economies, why are there recessions?) The fictional antidote to Asimov is I, Pencil, a short story that ought to be mandatory reading in every school in the land. My favorite passage:

Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me. Each one wants me less, perhaps, than does a child in the first grade. Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work. This is the mystery to which I earlier referred.

It has been said that “only God can make a tree.” Why do we agree with this? Isn’t it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies — millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

The problem with Krugman’s worldview — the basic problem with managerial statism — is that it calls for masterminds, and we do not have any. But Krugman aspires to the role, and the fruits of his aspirations, and those of others, are all around us.

Hayek vs. Krugman is a lot like Popper vs. Plato. There are limits to what can be done by men, and there is a price to pay for failing to respect those limits.



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