Diversified knowledge required in the modern economy requires relying on experts, but imbuing these experts with political authority has disastrous consequences.
The additional power that is being granted to experts under the Obama administration is indeed striking. The administration has appointed “czars” to bring expertise to bear outside of the traditional cabinet positions. Congress has enacted sweeping legislation in health care and finance, and Democratic leaders have equally ambitious agendas that envision placing greater trust in experts to manage energy and the environment, education and human capital, and transportation and communications infrastructure.
However, equally striking is the failure of such experts. They failed to prevent the financial crisis, they failed to stimulate the economy to create jobs, they have failed in Massachusetts to hold down the cost of health care, and sometimes they have failed to prevent terrorist attacks that instead had to be thwarted by ordinary civilians.
Ironically, whenever government experts fail, their instinctive reaction is to ask for more power and more resources. Instead, we need to step back and recognize that what we are seeing is not the vindication of Keynes, but the vindication of Hayek. That is, decentralized knowledge is becoming increasingly important, and that in turn makes centralized power increasingly anomalous.
“We know best and the related Madison’s long term, disastrous reading results.