Nobody planned the global capitalist system, nobody runs it, and nobody really comprehends it. This particularly offends intellectuals, for capitalism renders them redundant. it gets on perfectly well without them.Peter Saunders (quoted in Matt Ridley's The Rational Optimist).
AM: Against this argument, is the idea (popular with Keynesians) that the economy, like an engine or a car, can be fixed or steered. The benign planner presumably has the knowledge to carry this sort of thing out effectively. Hayek would call this the "pretense of knowledge." In reality, the economy is far too complex, and our knowledge of it far too limited, for any top town planner to carry out effective interventions.
I like what Saunders wrote; he shows himself to be as blind as everyone else and allows himself to join company with the other 'redundant' intellectuals. He, too, cannot see beyond his nose. In his quote, simply substitute the words 'capitalist' and 'capitalism' with greed, and greediness, and everything makes perfectly good sense. Everyone understands greed, and that is why capitalism works. Of course, so-called intellectuals do not like the fact that they are unable to see the obvious. King Midas loved the idea that everything he touched could turn to gold (greed), but he was unable to realize that in his greediness, all would be destroyed. King Capitalist will have the same problem, and you do not need an intellectual to tell you so. Furthermore, Saunders is wrong in saying no one understands capitalism - we all understand the concept of greed. Profit at all and any cost. This is the way of man.
ReplyDeleteA couple of points:
ReplyDelete1. Capitalism isn't greed. Capitalism is just trade. In other words, people buying and selling things in a free market place.
2. People trade because they are better off by doing so. I don't think that people who try to make themselves better off through trade are necessarily "greedy", unless by greedy you mean purposeful.
3. Commerce usually goes alongside civility and philanthropy. In other words, when people start trading with one another, social relations often improve, not worse. Look at, for example, charitably donations - the ultimate capitalist, Warren Buffet has donated about half is income; Bill Gates, same thing.
re: knowledge - It is not necessarily that people don't understand capitalism as a concept, but that the knowledge of how it works, what it produces, how it produces and allocates goods and services basically impossible to obtain given the complexity of it all. So, to try and "plan" an economy or "fix" an economy, as many intellectuals portend to aspire is quite often a misguided effort.