Pretence of knowledge is a phrase coined by Friedrich Hayek to describe the psychological predilection of those who believe they know enough to plan a path to economic plenty and who inevitably produce economic and social misery. John Maynard Keynes a contemporary of Hayek illustrates the mindset. A few years after The Road to Serfdom (1944) was published he corresponded with Hayek about it. “Morally and philosophically I find myself in agreement with virtually the whole of it,” he wrote. Only in a later letter to show that he neither understood nor agreed with any of it. Viz:
“I should say that what we want is not no planning, or even less planning, indeed I should say we almost certainly want more. But the planning should take place in a community in which as many people as possible, both leaders and followers wholly share your moral position. Moderate planning will be safe enough if those carrying it out are rightly oriented in their minds and hearts to the moral issue.”
The moral issue is quite beside the point. Unpredictable change is the difficulty. Things out there in the business of life – inventing, innovating, making, getting and spending, needs, wants and tastes – are forever changing in unpredictable ways; often very rapidly.
From an article in the Scientific American: In one decade, cars replaced horses (and bicycles) as the standard form of transport for people and goods in the United States. From a Microsoft article: In 1890 there were 13,800 companies in the United States in the business of building carriages pulled by horses. By 1920, only 90 such companies remained.
I’m fond of those not-so-old movies in which reporters rush out of the courthouse to reach the nearest public telephone booth. Wikipedia: “In 1999, there were approximately 2 million phone booths in the United States. Only 5% of those remained in service by 2018.”
Before now, the miserable outcomes of economic planning were best exemplified by the Soviet Union and Communist Chinese five-year plans. Now, I think, planning how the system of generating energy and of transport will develop over the next twenty-six years to 2050 will inevitably take the cake. Of course most of the misery lies ahead, but it’s coming. It’s coming to us in particular.
On the way: powers shortages, rationing, rising electricity prices, the continued loss of manufacturing to China, India, et al, which will continue to exploit the advantages of coal and nuclear power as we remain obdurately fixated on inadequate, unreliable and intermittent renewable energy. Then there is the inordinate delays to any new mining developments. And the maniacs in charge will be intent on reducing ruminant belching and the use of nitrogen fertilizers. Unless the Coalition regains government, and with a radically new mindset, Australia will slip down the international economics league table, as did Argentina. This is not hyperbole. It’s inevitable. Economic prosperity is not a given, even if the Greens and Teals fancifully think otherwise