Wednesday, February 25, 2009

The Foolishness Of Centralizing Millions of Economic Decisions in The White House

Walter Williams explains why government can NEVER do what a free economy does and that is to make millions of decisions that lead to individual prosperity and happiness.

The idea that even the brightest person or group of bright people, much less the U.S. Congress, can wisely manage an economy has to be the height of arrogance and conceit.
Why? It is impossible for anyone to possess the knowledge that would be necessary for such an undertaking.

At the risk of boring you, let’s go through a small example that proves such knowledge is impossible.

Imagine you are trying to understand a system consisting of six elements. That means there would be 30, or n(n-1), possible relationships between these elements.

Now suppose each element can be characterized by being either on or off. That means the number of possible relationships among those elements grows to the number 2 raised to the 30th power; that’s well over a billion possible relationships among those six elements.

Our economic system consists of billions of different elements that include members of our population, businesses, schools, parcels of land and homes. A list of possible relationships defies imagination and even more so if we include international relationships.

Miraculously, there is a tendency for all of these relationships to operate smoothly without congressional meddling. Let’s think about it.

The average well-stocked supermarket carries over 60,000 different items. Because those items are so routinely available to us, the fact that it is a near miracle goes unnoticed and unappreciated. (READ Economic Freedom)

1 comment:

Some Dude said...

I read this article, and I agree completely. No one is smart enough to manage the entire economy, but that doesn't stop Congress from trying.