“At the heart of economics is a scientific mystery: How is it that the pricing system accomplishes the world’s work without anyone being in charge? Like language, no one invented it. None of us could have invented it, and its operation depends in no way on anyone’s comprehension or understanding of it. … The pricing system–How is order produced from freedom of choice?–is a scientific mystery as deep, fundamental and inspiring as that of the expanding universe or the forces that bind matter.”
The human condition is one of limited knowledge, limited foresight, uncertainty and ignorance about the future — everything that doom grand plans to failure. Certainly, humans can engineer machines with some degree of success. However, these machines are inanimate objects made of materials that have no will or volition. Social engineering fails because the material at hand are people who have no particular desire, nor the ability, to selflessly obey someone for some “greater good.”
Apart from the above mystery identified by Vernon Smith, there’s another mystery: why do some people endlessly attempt social engineering when every past attempt has resulted in wastage at best, and at worst, untold misery and death visited on hundreds of millions?
India’s planners have consistently created monstrous disasters. Yet every new set of leaders believe that they will succeed where others have spectacularly failed. It would be interesting if some journalist had the basic curiosity to ask Indian politicians this simple question: why?
And talking of questions, it is time for another “ask me anything.” What’s on your mind?