The Pretense of Knowledge

Despite the 1994 rhetoric of the Republican majority, government continues to grow with its tentacles reaching more and more into our lives through a tax code that now stands at 5 million words and yearly enactment of 60 to 70 thousand new regulations. Washington's increasing reach is neither constitutional nor moral. Politicians might think they are doing what's best. But they're not and the reason is simply that politicians cannot possibly know what's best for people - not because they're stupid or uncaring - they just don't have the necessary information and it's impossible for them to get it.

Take a minor example to illustrate this point. Three out of four workers pay more in social security taxes than they pay in federal income taxes. Suppose there wasn't a government-mandated retirement program. A person like Mary would have more money. She might save the money to invest in a computer and start a home-based business, provide music lessons for her kids or invest in the stock market. What Congress in effect says, "We know what's best for you; that's to put $40 of your weekly earnings into Social Security." Adding injury to insult, Congress threatens, "If you disagree with us, and don't do what we say, we'll put you in jail." How is it possible for Congress to know what's best for Mary? Mary might be irresponsible and not prepare for her retirement, or Mary might be very successful and establish a thriving business or the music lessons she could have afforded might have resulted in her kid becoming a concert pianist. We'll never know what might have been.

You miss the point if you think I am debating the merits of our Social Security program. The issue is far deeper. The world is complex and information is costly. Any one person, or group of persons, has only highly limited knowledge and information. The bulk of knowledge and information necessary to conduct our lives is held locally among millions of individuals, not centrally among bureaucrats such as: which is the best time to leave for work and what's the best route to take, which is the best word processor program for me or should my daughter go to a coed or single-sex high school? Do you think any politician can meaningfully answer those and other questions for 260 million Americans? When politicians dictate how people manage their lives, they either arrogantly believe they know what's best for others, or they have contempt for the idea that individuals should be free to choose what they see as best for themselves.

If political leaders are to do more good than harm, they must recognize both society's inherent complexity and the severely limited information and knowledge they possess. Instead of trying to shape society to their liking, they should limit their activities to cultivating an environment where people can choose and maximize their potential. That's precisely what the Framers of our Constitution sought to do. A critical element of such an environment is to establish what the late Nobel Laureate economist, Friedrich Hayek, called rules of several property: the stability of possessions, their transference by consent, and the keeping of promises. Today's tax code and heavy regulation of peaceable, voluntary exchange violate rules of several property. Respect for the rules of several property produced an environment in our nation where our people could more fully exploit resources and enabled us to become the world's richest and freest nation. We are still benefitting from that legacy but it's being eaten away by people who think they have superior wisdom and have been ordained to force that "wisdom" on others.

Walter E. Williams

c7-98

May 29, 1998