Tuesday, October 28, 2014

Quotation of the day on the ‘fatal conceit’…

Quotation of the day on the ‘fatal conceit’…:

… is from Thomas Sowell’s nationally syndicated column today “Random Thoughts“:

Too many intellectuals are too impressed with the fact that they know more than other people. Even if an intellectual knows more than anybody else, that is not the same as saying that he knows more than everybody else put together — which is what would be needed to justify substituting his judgment for that expressed by millions of others through the market or through the ballot box.
MP: Sowell’s observation above is what Hayek called the “fatal conceit” of socialism, and it give us insight into why the substitution of central planning and government intervention for the market usually fails – the central planners and regulators never have access to all of the information necessary to make efficient, welfare-enhancing, economically desirable decisions. Reason? The relevant information for decision-making does not exist in a central location; rather it is dispersed somewhat invisibly throughout the entire economy and consequently inaccessible to the planners/regulators. And therefore, the planners’ attempts to circumvent markets and/or correct alleged market failures will usually fail because of the lack of relevant information.

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