Here is something that caught my eye this afternoon. It is a quote by Friedrich Hayek, an economist who was a contemporary of John Maynard Keynes and one of his greatest critics. It speaks to a question that is, and ought to be, fundamental to our times. Namely, who knows better how to allocate our economic resources, individuals or government?
The real question is not whether man is, or ought to be, guided by selfish motives but whether we can allow him to be guided in his actions by those immediate consequences which we can know and care for or whether he ought to be made to do what seems appropriate to somebody else who is supposed to possess a fuller comprehension of the significance of these actions to society as a whole.
Hayek was firmly against Keynes’ theory of aggregate demand, which led Keynes to the belief that government ought to maipulate the economy to maintain aggregate demand (and thus, full employment). To make the point a little more clearer, Keynesian economics is what is driving our government wanting to bail out and “stimulus” the country back to economic health.
Just as an aside, I strongly suggest (if you are interested in economics) to read some of Hayek’s writings. His defence of classical economcs is in large part where the economic and fiscal principals of modern American conservatism come from.