In the mind of Ben Bernanke and thousands of other government planners, the economy consists of data and levers. Production is down so pull the lever for lower interest. Unemployment is up so we need some fiscal and monetary stimulus. If a sector sags, give it a lift. If stock markets come under pressure, protect against a plunge.
The only human actors in this worldview are government agents themselves. The rest of us have nothing to do with it.
A radically different way to look at the economy, one that is far more realistic, was presented in a series of lectures and books by F.A. Hayek in the early 1930s. He made his strongest case that the production structure is an intricate web of astonishingly complex relationships and plans brought about by billions of individual planners like you and me.
These essays got lost in the frenzy of World War II and the imperious triumph of Lord Keynes’ hydraulics. The Laissez Faire Club is bringing them back in one of our most exciting releases to date: Hayek’s Triangles. Proflicat economist Mark Skousen writes the introduction, a shortened version of which appears as today’s issue.
Here is the book that explains our plight.