How Much Does the Elite Know?

The great presumption of the twentieth century was that an educated elite capable of “rational, factual, socialist argument” was much better way at running the country than the higgling and the chaos of the market.

So it wrong to suggest, Thomas Sowell writes, that either economic interests rule (Marx) or that ideas rule (Keynes).   

My own view is that differences in bedrock assumptions underlying ideas play a major role in determining how people differ in what policies, principles or ideologies they favor.

But suppose that the bedrock assumption of our age, that the best government is government by a rational elite of experts, is wrong? 

No big deal.  It just explains most of the famines and economic disasters of the twentieth century, from the Ukrainian famine to the Great Leap Forward famine, to the extended Great Depression and the stagflation of the 1970s.

Opposed to this conventional wisdom that an educated elite knows best is the insurgent view of people like Thomas Sowell.

If you start from a belief that the most knowledgeable person on Earth does not have even 1 percent of the total knowledge on Earth, that shoots down social engineering, economic central planning, judicial activism and innumerable other ambitious notions favored by the political left.
If no one has even 1 percent of the knowledge available, not counting the vast amount yet to be discovered, imposing from the top of the notions favored by elites convinced of their own superior knowledge and virtue is a formula for disaster.

What Sowell is doing here is dumbing down the central insight of two experts, Lugwig von Mises and F.A. Hayek. 

Mises said that the socialist commonwealth would fail because it could not compute prices (i.e., would lack the knowledge to know what to produce and what not to produce). 

Hayek said that the brilliant man in Whitehall or Washington could not outperform the millions of economic actors with their intimate knowledge of economic facts on the ground.

Today we have a report from Peter Ferrara that the Democrats in Congress are ramping up taxes and spending in their budget resolutions.

That is another way of saying that we, the committee of 535 best people assisted by government experts, know what is best for America.  We know how to spend Americans’ money better than they do.

Our Democratic friends are liable to wake up pretty soon with a bad cold.