Let’s change the tone from epistemological navel gazing to political commentary.
My optimism on the economy continues to decline. I thought that it was pretty well recognized that no matter how smart, well-meaning, and informed a government is, there is no way it can plan an economy. And yet, even the financial press is judging the appointment of economic planners based on how “smart” and “qualified” they are rather than whether or not there should be such an appointment at all. It seems that in an effort to be sensitive to suffering peoples’ needs (call it “compassionate conservatism,” “liberalism,” or “socialism” if you like), leaders have lost sight of all the hard-learned lessons of the last century.
Central planning doesn’t work. The problem of gathering all the data necessary to solve the production and logistics problems, as well as the actual solving, are infeasible by any human-designed system. Only an evolved system has the power, and the market is such a system.
Government resolution of one crisis necessarily leads to others, and the magnitude of these crises tends to increase.
The best way to encourage prosperity is to allow people to be free to exercise their judgment on their unique situation.
Trying to substitute your (ie government) judgment for theirs leads to downward spirals where people are unable to use their own judgment in crisis because they haven’t had the exercise of using it in smaller emergencies.
In other words, perpetually solving problems for people leaves them unable to solve them on their own; which creates more problems.
So in response, a socially-conscious person might object: “So you suggest doing Nothing?! You would let people STARVE?!!! AAHHH!!! CAPS LOCK AND ITALICS AND EXCLAMATION POINTS!!!!!!”
And, frankly, I sympathize with that sentiment. Its very hard to be an empathetic person and stand by idly when another person is suffering, especially when you have the power to alleviate it. You might make the same point about conflict; it seems immoral to stand idly by when one party is harming another and you have the power to stop it. And thus, the US’s involvement with conflicts around the world.
I’m becoming more convinced that isolationist policy might be the more compelling stance in terms of defense. And people who make that argument about foreign policy should take the same stance on domestic issues.
That is to say: we should not use our government to solve economic problems for the same reason that we should not use our military to solve other countries’ territorial problems. Both are motivated out of good will and a desire to improve the state of the world, but both may be doomed to failure, and for similar reasons.