- The Washington Times - Monday, September 18, 2000

The greatness of Friedrich von Hayek, Nobel Laureate, was confirmed with the fall not merely of the Soviet Union and the East European satellites or the change in the British Labor Party's rhetoric if not its ideology. His wisdom, which merits recognition anew as we enter the presidential campaign, was confirmed even more dramatically over several decades by a quasi-global plebiscite against Marxist socialism by millions of people, victimized for generations by this baneful doctrine, who fled socialist countries.

The voting in this worldwide plebiscite was not only by ballot box where genuine voting was permitted but also by people willing to hurdle high-voltage fences, to sail in leaky tubs in the pirate-infested South China Sea and the Fidel Castro-infested Caribbean, to risk asphyxiation in crowded freight-cars, to fly in home-made planes, anything to get away.

Rejected was the Marxist dogma that society's ills flow from ownership of private property; that only by nationalization and expropriation of private property would civilization change from a world of scarcity to a world of plenty. It turned out the world of scarcity existed in Marxist-Leninist "planned societies."

Marxism wrongly assumed that the market economy capitalism was outmoded and the only solution for the evils of capitalism were the virtues of "scientific socialism." But it turned out Hayek had been right all along, namely, that socialist central planning would not only fail but that its failure would, for the sake of regime survival, introduce dictatorship. Hayek's reason for socialist failure was summed up by Oxford Professor John Gray:

"For Hayek, economics is the study of the unplanned coordination of human activities by market processes, whose function is not to allocate scarce resources as capital or physical plant, but instead to economize on the scarcest resource of all human knowledge."

Market institutions in Hayek's universe, says Mr. Gray, were "epistemic devices means whereby information that is scattered about society and known in its totality by no one can be used by all by being embodied in prices." And "because the planner cannot know relative costs and scarcities, the planned economy will in fact be chaotic and vastly wasteful."

Hayek's theory about economics can be applied to drastic social reforms as well. (Just recall the Hillary Clinton Health Plan.) In a political campaign, left liberalism always proposes, in the guise of remedying social inequities, high-sounding changes to meet problems. Left liberalism of the Gore-Lieberman breed ignores an immutable law that bears repeating even in the Cyber Age: Human knowledge is the scarcest resource of all. Beware of the politicos with grand, sweeping, new ideas for their sweet-smelling, scientific planned society. To be remembered while we listen to the presidential debates: As the power of the state increases, the liberty of the citizen decreases.

Sidney Hook once argued that a social system is a historical phenomenon. Its possible development cannot be predicted by logic or what Professor Gray calls "the hubris of reason." The question of a social system's future can only be based on what he called "a whole web of probabilities." Probabilities not certainties.

Throughout history, especially during the 20th century, we have seen over and over again that leaders at the highest level and presumably in a position to have total knowledge about everything were as utterly ignorant of the consequences of their purposive actions as the lowliest peasant. Kaiser Wilhelm and his advisers, as well as Czar Nicholas and his advisers, had no more idea that their empires would collapse when they opened World War I than Adolf Hitler did when he opened World War II. Nikita Khrushchev didn't know he would be ousted in October 1964 by his Politburo any more than Mikhail Gorbachev expected to be ousted after his five years in office. Neither Presidents Kennedy nor Johnson foresaw the results of the war in Vietnam. Could President Nixon have foreseen Watergate? Could President Clinton have envisioned he would one day be impeached? The stockbroker who guesses right on one day guesses wrong on another. (See Howard Kurtz's "The Fortune Tellers," for confirmation.)

I began with the wisdom of Hayek. But there was another wise man, John Maynard Keynes, who in 1904 wrote:

"Our power of prediction is slight, our command over remote results infinitesimal. It is therefore the happiness of our contemporaries that is our main concern; we should be very chary of sacrificing large numbers of people for the sake of a contingent end, however advantageous that end may appear… . We can never know enough to make the chance worth taking."

Arnold Beichman, a Hoover Institution Research Fellow, is a columnist for The Washington Times.

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