Biden’s experience doesn’t mean he can engineer an economy

In a recent interview with MSNBC’s Stephanie Ruhle, President Biden replied On the question of his age (80 years) and how it will affect his performance if he is in office for a second term. „I’ve got a lot of wisdom and know more than the majority of people,” Biden said, „and I’m more experienced than anyone who’s ever run for office.”

This is a positive answer to a difficult question, but one that deserves further study. No presidency, especially one so active in industrial policy and economic planning, could receive this answer.

We all know that someone who has lived 80 years will have more life experiences than someone who has walked the planet for 70, 60 or 50 years. Also, Mr. Devoted his entire adult life to politics. But granting this doesn’t support the idea that Biden knows more than the vast majority of us on all topics considered. None of this matters much if his administration continues to fail to co-opt the vast majority of people’s knowledge.

As someone who turns 90 in a few months, I’m more inclined to think that life’s experiences teach us how little we know about the way the world works. Yes, we may get better at Trivial Pursuit over time, but I sympathize more with Ernest, a character from a JM Barrie comic. play Admirable Crichton. When asked to explain why he was unaware of certain important events, Ernest replied: „I am not young enough to know everything.” Anyone can call a great grandchild to help set up a new smartphone.

Biden’s comment raises fundamental questions about what kind of knowledge we need from a president. While writing in the 1940s, Friedrich Hayek wrote Excellent article: „The Use of Knowledge in Society.” Hayek, who later won the Nobel Prize in Economics, explained that human societies face a severe knowledge problem; Knowledge circulates among countless individuals, each of whom knows more about his particular circumstances than anyone else.

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The point is simple, but profound: Neither Biden nor any other person knows enough about material extraction, refining, production, transportation, and so on to create an automobile tire, a ballpoint pen, or a paper clip from scratch. I emphasize what Leonard Reid famously called „new” in his book 1958 article, „I, pencil.” Anyone building a very simple product would have to find ways to tap into the collective knowledge of humanity. It requires cooperation, communication and trade among large numbers of people. Even a presidential administration cannot duplicate the efforts of many involved players, nor know who each player is.

For management to influence the use of resources so that the right goods are produced in the right quantities for the right people—whether it’s microchips, metals, energy, vehicles, or anything legally considered „infrastructure”—it’s ineffective. Gather the brightest and best, find consensus, and force adoption of a solution among all economic agents. Hayek popularized this belief in „Deadly arrogance.” Instead, he suggested the refreshingly simple idea that broad goals and institutional guards should be set. How to accomplish those goals was left to the creativity of the people closest to the situation.

The Biden administration recently announced air quality regulations Electric generators provide a convenient example. Briefly stated, the EPA A has been proposed 90 percent reduction on carbon emissions from power plants over the next few decades. But instead of setting a clear benchmark — even a tough one — and enforcing the standard, Biden’s rule imposes EPA regulations „Technology oriented„The standard, or a specific fix, will be used by fossil fuel-burning plants across the country.

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Management uses a command-and-control approach to dictate how companies achieve reductions, relying on its own wisdom rather than the collective wisdom of „the majority of people.” It assumes that Biden officials know better than anyone else how to solve this problem, not just now, but into the future.

Hasn’t the administration seen more success in defining property rights to limited amounts of carbon emissions and allowing markets to set a price for emissions, as it did years ago? Sulfur dioxide control? As these allowances are bought, sold and traded, the market decides who must emit and how much. Air quality „users” can consider endless opportunities—now and in the future—to reduce emissions, and get paid to do so. This approach allows environmental interests to buy emission rights and retire them.

Biden, like many before him, relied on the knowledge of his own team. Researchers from the Mercatus Center’s RegData division found that the U.S. leads the industrial world in imposing command-and-control regulations instead of allowing markets to achieve desired outcomes. as At the end of 2021 (last year analyzed), there were 1,094,447 regulatory controls in the United States in the Code of Federal Regulations. By comparison, in 2021, Australia had 238,528 federal regulatory restrictions on books, while Canada had only 89,569.

Mr. Regardless of what one thinks of Biden and his cohorts, we all have some degree of intellectual disability. Instead of demanding clear goals and functioning markets, we question the millions of creative Americans whose knowledge is greater, and allow the so-called best and brightest to try the whole job on their own. This is also a deadly thought.

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