Hayekian Moments in Life

I never tire of looking out the windows of airplanes. For all of human history until just about the day before yesterday, no living person saw the world like this. People could climb up to the top of mountains and see the valleys below. But to see that whole view looking straight down was the privilege of birds and God. Then about 100 years ago, this changed and we could see what we never really experienced directly.

It’s not raw nature that enthralls me. It’s cities. It’s the small towns. It’s the lights. It’s the vast, cultivated farmland. It’s the seeming orderliness of human civilization that was no one’s plan, but rather emerges through the bit-by-bit creation of minds. Everything we see was once an idea, and then it was made real through action.

Despite all the pretense by the government and the arrogance of its officials and the planning mindset of its bureaucrats, what you see out the window of a plane is essentially ordered anarchy, the evidence of what millions of explosive units of creativity (also known as people) can build when they are all cooperating in pursuit of their own self-interest.

I’m also intrigued by the gargantuan swaths of seeming nothingness that stretch between east and west in the U.S., and it causes me to marvel about the talk over “overpopulation” or how we are running out of room. Under the right conditions, the whole planet could fit in this space with plenty of breathing room. Oh, and remember that talk some years ago about how we are running out of landfill space? Nuts!

That’s not the only lesson to be drawn to this bird’s-eye view. There is a scene in the 1949 movie The Third Man, set in Vienna after the Second World War, when the criminal bandit Harry Lime and the visiting author Holly Martins are at the top of a Ferris wheel. They look down, and Holly asks Harry if he has ever seen one of his victims. Harry answers as follows:

“Victims? Don’t be melodramatic. Look down there. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you 20,000 pounds for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare?”

The allusion to how fighter pilots see the world must have been impossible to miss in those days following the war. The people are just dots from way above, about as valuable as the ants we routinely crush under our feet when walking through the grass.

This is pretty much the way the state sees us. The state is the predatory bird looking down, seeing not thriving and precious life, but dots that can be stopped and eaten or allowed to move in ways of which it approves. It imagines itself to be the master of all things below, but lacking the ability to actually cause beautiful things to be created, it falls back, again and again, only on its power to destroy without mercy.

The great challenge of liberty is to view the world from above, not as a predatory bird, but rather with the awe we feel as passengers when looking out the window of an airplane. We should see precious and awesome complexity, an order that can be observed but never controlled from the top.

This is how I imagine that F.A. Hayek came to see the world when he wrote his famous article “The Use of Knowledge in Society,” which came out during the war in 1945. In his view, the whole economic problem had been radically misconstrued. Economics was not really about how best to employ social resources. Instead, he said, the economic problem was finding a system that made the best possible use of the various forms of knowledge of time and place that exists in the minds of individuals. This knowledge, he wrote, is ultimately inaccessible to central planners:

“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge that all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate ‘given’ resources — if ‘given’ is taken to mean given to a single mind, which deliberately solves the problem set by these ‘data.’ It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”

Looking from above, then, we can only see, but we cannot actually know all the data that go into making the social order turn out the way it does. If we cannot know in totality what drives individual choice and human action, we certainly cannot substitute in their place the will of planning agents and expect a better result.

I admit that I’ve struggled for years to fully appreciate this insight. Even after reading the paper 100 times, Hayek’s core point has eluded me, at least to some extent.

But when I was in Sao Paulo, Brazil, I had an amazing experience that helped to crystallize it for me. I went to one of the highest buildings in the middle of the city. On the roof, there is a very fancy place called the Sky Bar. It looked out over the whole city in all directions. You could spin in circles and see nothing but the evidence of human hands struggling to create a life.

There are some 20 million people in this city, but from the looks of the place, one imagines five instances of New York City all crammed together. There doesn’t seem to be any center to it. It just goes on and on in a way that is impossible for the human mind to grasp in totality. What can you do but just stand in awe of such a sight? That is exactly what I and my friends from Mises Brasil did.

Brazil is a socialist state, but like all modern socialist states, it is only pretending to do what it claims to do. Rather than inspiring some new wonderful thing to happen, it only gets in the way with its meddling and regulation and taxation. Like all states, it is drains productivity and wealth from society, rather than contributing.

Somehow it struck me as more obvious than ever from the height of this Sky Bar. It is the height of arrogance for any group of people to imagine that they can control such a place as this. Black and gray markets thrive. Unauthorized things define life itself. Spontaneity prevails. The whole city is gloriously rebellious of official dictate, and this is precisely what makes the place wonderful.

Yes, there is planning. Plenty of it. Individuals plan their lives. Businesses plan their production. Consumers plan their purchases. But the government plans nothing. It only interferes and lies about why.

It is as Hayek said: “This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.”

Just as I stood on the top of that building trying to imagine and comprehend the expanse of the space of Sao Paulo, a couple stood in front of me and blocked my view. They fell into fond embrace, at length. Who are these people? How long had they known each other? Who between them felt the greater degree of affection? What would this public display of affection lead to? Was this one evening in the making or a lifetime?

I had no clue about any of this, and I wouldn’t dream of interfering. Only these two know and can shape their lives, mistakes and all. These are two of 20 million who live out there. These 20 million are only 10% of the whole population of Brazil, and this country has only 3% of the total population of the world. And every single individual has a mind of his or her own. Thank God for that. Somehow it all works.

No one will finally rule this world.


Jeffrey Tucker

The Daily Reckoning