October 2, 2011

I, Prosperity

One of our beloved professor's favorite questions is "Why are we prosperous?" and our discussion last week opened the door, I believed, during our discussion on the rule of law to finding some sort of a path to walk down to find that answer. This weeks reading enlightened me even further, and the pieces of the puzzle are falling into place.....
In this weeks readings by Hayek, I think he makes a PROFOUND argument for liberty that is especially prescient given the blah blah blah on the TV going on between the Republican presidential candidates..but the argument underlines the answer to the our question..'Why do we prosper?" Knowledge....and the freedom to exercise it.....
Hayek wrote in The Use of Knowledge, speaking about economics, but an argument that I believe speaks to a political philosophy as well. He wrote that in society today, it is assumed that those utilizing scientific knowledge and expertise in the area of economic planning are considered virtually sacrosanct in terms of authority on whatever matter is under discussion. "...a body of suitably chosen experts may be in the best position to command all the best knowledge available..." Interestingly, this is EXACTLY what Woodrow Wilson wrote in The Study of Administration, which he published before becoming President. If you are interested, I included a link to the article. This thought process is what the modern Administrative State, the Bureaucracy, was founded on. The Administrative State places limits on the free flow on resources, as well as limits the productivity of those resources within a legal framework the restricts their utilization according to a proscribed course of regulation. Just think....EPA!
Hayek goes on in the next paragraph to write the best argument for liberty I have heard "It is with respect to this that practically every individual has some advantage over all others because he possess unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active cooperation"
Sowell wrote "Yet the vastly greater mundane knowledge brought to bear by millions of ordinary people making their own mutual accommodations among themselves almost invariably produced higher economic growth rates and higher standards of living after central planning was jettisoned.......These innumerable interactions and mutual accommodations are what bring the other 99% of knowledge into play - and generate new knowledge in the process of back and forth bids- reflecting changes in supply and demand"
So why do we prosper?...In large part...the knowledge that neither you nor I individually posses, but that combined as a whole, creates an emergent economy that leaves us all better off.

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