F.A. Hayek Is The Key To Overcoming CovidMania Self-Destruction
The human body and the numerous “systems” that coordinate it like the respiratory, nervous, and digestive “systems”, is the result of the actions of some 30 trillion cells but obviously NOT the result of any conscious planning, designing, or conspiring by them. Thanks to the likes of Darwin and a modern understanding of genetics we can understand how natural selection was the inadvertent “designer” of such systems and complex order. The global socioeconomic order/matrix is also coordinated by a “system”, by what economists of the so-called ‘Austrian School’, like 1974 Nobel Laureate in Economics F.A. Hayek and his great mentor Ludwig von Mises, referred to as “The Market Process”. ‘The Market Process’ and the “parts” it is composed of like money, prices, economic competition, interest rates, and the legal/religious/governmental frameworks that sustain it, “are indeed the result of human action, but not the execution of any human design” . The ‘market process’ shares this trait with language which is also a complex mechanism that is the result of human action but was not consciously designed or invented by people/cells. Just like cells are unaware of why they act the way they do and how natural selection has evolved them over billions of years to be parts of complex multi-cellular organisms, so is mankind ignorant of how “processes of selective evolution” have shaped “the brain and society” and created “the market process” which coordinates our actions to create the global socioeconomic order/matrix/’Social Organism’, and coupled with the fact that we are biologically slightly smarter vicious tribalistic apes, it is what keeps plunging mankind into wars and the current CoronaVirus socioeconomic collapse. Let’s briefly discuss how Mises/Hayek’s ideas are the keys to overcoming our troubles. To do this we have to understand how the ‘the market process’ works, how it has evolved to transform slightly smarter apes into civilized members of the global commercial socioeconomic order, and then see how economic ignorance and tribalism constantly leads to our disastrous economic policies and current CovidMania self-destruction.
Your life, the wealth you consume, the entire global economy and thus all of human civilization is the inadvertent result of a simple concept or better said, tradition. The tradition of private property. Private property means that a person owns and has the freedom to use his property as he desires/calculates. Our freedom to trade our private property with anyone in the entire planet inadvertently transforms billions of free people into a global super-computer where all companies are motivated to innovate and learn from each other thus inadvertently cooperate to discover superior information with which to serve customers and reorder all of mankind. Companies that don’t successfully compete (innovate/learn) won’t get enough revenue to pay a competitive wage, motivating employees to once again use their freedom to trade, this time their labor, to quit and join the increasingly better-informed and thus more productive and thus higher-paying companies. A mind/CPU anywhere in the planet that comes up with an improvement will benefit everyone in the world if they are free to trade for his product/service which will also motivate all competitors in the world to likewise improve their actions/order. So we can see how just like in the Olympics we can discover the best athletes in the world due to global competition, so does having the freedom to trade with everyone in the world allows the best ideas to compete/spread globally thus ensuring the best possible global order. As cost-cutting ideas emerge and inevitably spread via competition leading prices to continuously fall, new profitable ideas easily arise and once again spread via competition in an endless cycle of knowledge generation/innovation. For example, computers were once very expensive, but once the price of making them came down enough, people easily realized that every home could have them, which gave birth to our computerized world and the Internet and all the great things that flow from it. The more wealth is produced, the more wealth has to be offered in exchange for labor as companies/orders compete against each other for the labor they need which helps explain why the economic pie grows for everyone. For example, imagine that after a shipwreck you end up in an island where everyone has a machine that can turn dirt into food. Tom wants your labor to build a home, Mark, to build a boat, and Gina to plant a garden. Competition will motivate them to offer you all the food you want and more.
It is important to envision the socioeconomic order as it really exists as if looked at from high above. Envision people coming together/apart as companies/orders emerge and dissolve in ever-changing conditions. Superior information arising and rippling/restructuring the social order thanks to competition. As orders get more productive they lure other people to ‘trade-with’/’join-them’ by offering more money/wealth for their labor relative to other companies/orders, eventually causing the least productive orders to sort of dissolve as their ‘factors of production’ like labor, buildings, etc. are bid away to be parts of more productive plans/orders. A sort of swarm intelligence emerges as the all-pervasive public quickly nourishes the growth and spread or superior orders/companies/information, inadvertently expanding the worldwide “division of labor and information” as entire neighborhoods/cities morph themselves in specialized ways as complementary pieces of information/orders segregate themselves in distinct geographical locations like the software industry in Silicon Valley, California and manufacturing in Guangdong, southern China. As Mises reminds us “The division of labour is a fundamental principle of all forms of life.” The division of labor is a pattern/way which natural selection rediscovers to enable smaller units/orders to efficiently compartmentalize labor/information as they contribute-to (and are nourished-by) a larger organism they become parts of(Organelles -> Cells -> Organs -> Humans -> Social Organism).
We should quickly add that morals are simply ways of acting, they are knowledge which also emerges and spreads via economic competition. Companies/orders that hire/nourish/’trade with’ lazy, disrespectful, or corrupt people will be less competitive and be inevitably pressured/selected to hire people with better morals which in turn forces everyone to be respectful and hardworking regardless of race, sex, etc. Similarly, it is hard-working, tolerant, courteous people who thanks to competition inevitably force everyone else to be likewise. As Hayek tells us:
As millions of Italians, Britons, Germans and others from all over the world came to America, it was ultimately the competition which grows from ‘private property’ and thus individual liberty/freedom which stripped these people of their otherwise nationalistic/ethnocentric/tribalistic identities and evolved what came to be seen as the classic American character/ethos of wanting to be seen as a reputable/honest businessman/professional who treats everyone with respect and wears a business suit as opposed to older religious/ethnocentric dress. So not only does ‘private property’ “turn on” or leads to economic competition and other aspects of the market process and resulting social order/civilization, it also evolves our culture/identity to be ideally suited for participation in the ‘Social Organism’.
Finance/banking and interest rates are other vital aspects of the ‘Market Process’. Besides the more obvious function of safeguarding savings and pooling the savings of many people to allow the execution of bigger projects which would have been impossible if entrepreneurs were limited to the few savings/wealth of friends and family, banking/finance and more specifically the phenomenon of ‘interest rates’ also play a nearly miraculous role. For example, assuming interest rates are at around 8%, some people, those who have no desire to start a business or have inferior business ideas/information they expect will have a return on investment (ROI) lower than 8%, will be motivated to lend their money to banks to earn ~8% interest and by doing so they refrain from consumption/spending, thus increasing the amount of wealth/savings available for the future borrowers to then consume. Something amazing is going on here!!!. Interest rates motivate the accumulation and movement of wealth from minds/CPUs that have inferior ideas that can grow the economic pie slowly (0–8% rate) to minds that have superior ideas and can grow the economy faster (> 8%) thus giving a tremendous sort of ‘computational boost’ to society.
Governmental/’public sector’ orders, being COERCIVE MONOPOLIES which get their life/order-sustaining wealth through taxes/compulsion are immune to the competitive-information-spreading incentives/pressures which motivate/force private sector orders to be efficient/innovative/hard-working. This helps one understand how Communism, which abolishes competing orders and replaces them with a single competition-less monopolistic bureaucracy, leads to a massive lack of production/innovation and eventually socioeconomic chaos/starvation as the economic pie continuously shrinks as has happened in every country that consciously attempts Communism/Socialism or inadvertently drifts in that direction as their governments get bigger and bigger (USA/World). Central plans can’t work if people are free to not go along with them — so they inevitably require compulsion/tyranny. For example, it is a criminal act in Communist countries like Cuba to start a business, in other words, to attempt a superior restructuring of society because it interferes with the plans of “the experts” who run the government. It is also a criminal act everywhere to not pay taxes that sustain public sector bureaucracies like “public education” so there is little incentive or wealth to sustain other, more desirable/superior competitors. For example, the NYC public(monopolistic) school bureaucracy consumes about $29,000 per year to “educate” a K-12 student. Refusing to pay a single dollar that goes to this bureaucracy is a criminal act. Taxes and all transfers of wealth from the private sector to the government, besides being an obvious burden to the human beings that had to sacrifice a part of their lives to earn such wealth and now have less wealth to trade for the things they want, simply destroy the private sector jobs the taxed-away spending would have sustained in the private sector and replaces such productive/efficient and pie-increasing jobs for inefficient government ones or worse like militarism/wars. The former Soviet Union had plenty of highly educated scientists/’experts’ whose plans required the coercion of millions, but they were thoroughly crushed by free Americans and their competitive knowledge discovery as they worked hard towards the American Dream. The image below is another one of our most powerful memes for explaining the difference between competitive/private/free orders(South Korea) and monopolistic/government/coerced orders (North Korea). Again, keep your eye on how information arises/spreads via competition and continuously restructures the social order.
A government regulation is essentially a “way” of doing things, it is information. But unlike information that arises in the private/competitive sector and is constantly being replaced by superior information due to economic competition, a government regulation is information that arises out of a few brains and is then forced upon the entire social order via the law and can only be changed via a painfully slow monopolistic/bureaucratic apparatus made up of economically ignorant politicians, scientists, lawyers, lobbyists, etc. who are then incentivized to fight/slow-down change (superior competing ideas). The more the government regulates, the more it paralyzes competitive knowledge discovery. As government regulations have increased in the health care sector, turning it into a sort of island of paralyzed top-down competition-less/socialist central planning, so have costs. These increased costs have led the sector to grow from consuming just 1.6% of the American economic pie in 1960 to 4.2% in 1980 to a whopping 16% in 2006 and about 20% by 2020. The image below helps explain the regulatory paralysis/bureaucratization of the entire medical sector which is responsible for the skyrocketing costs.
Below one can see how the less regulated a sector is the better it functions.
The IT sector is relatively unregulated, teens can work at Google/Microsoft and write the software in medical equipment that keeps people alive, yet there is no American Association of Computer Programmers dictating what or where such knowledge can be obtained similar to how the government via the American Medical Association regulates/paralyzes the medical sector via the licensing of doctors, medical schools, insurance sector, etc. At places like freecodecamp.org people learn to be highly-paid computer programmers for free. In the IT sector millions of people are ordered efficiently via smooth competition and are highly productive thus most make good salaries. If the medical sector, or better yet, the entire world-wide economy was as deregulated/free/competitive as the Software/IT sector, the rate of innovation and prosperity would skyrocket and I would guess that people who as of today have 10 years left to live might be able to beat dying of old age.
Coercive and thus competition immune knowledge monopolies can force disastrous ideas upon millions, Communism/‘Central Planning’ itself could be seen as such a disastrous coerced idea, but ‘monopoly “science”’ can be just as bad. It is not “science” or men with lab coats managing coercive and competitionless monopolistic government bureaucracies that discovers superior information. It is competition which requires freedom, especially from such knowledge monopolies. For example, in 1940 Trofim Lysenko became director of the Institute of Genetics within the Soviet Union’s Academy of Sciences, and he used his political influence and power to suppress dissenting opinions and discredit, marginalize, and imprison his critics. Lysenko’s erroneous ideas regarding farming led to famines that killed millions in Russia and then many more millions in China.
America’s Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases (a competition-immune position he has held for over 36 years), has immense influence over much of America’s medical/research establishment and he has been the main scientist/ideologue pushing for coercive monopoly of information and action via his pro lockdown, forced masking, and forced ‘social distancing’ for handling Covid which have paralyzed the USA economy leading to immense suffering. Thousands of world-renown scientists/experts have disagreed with him and came together to sign/advertise their views via the ‘Great Barrington Declaration’ . But, just as with Lysenko, Fauci has knowledge monopoly power that prevents competitive knowledge discovery, and called the declaration and thus competing information/views, “ridiculous”, “total nonsense” and “very dangerous”.
Having discussed several aspects of the market process like economic competition and interest rates, as well as how ‘private property’ inadvertently leads to its emergence and civilization, we can now discuss how ‘processes of selective evolution’ evolved the ‘market process’/’Social Organism’ without conscious human planning or design. In other words, how vicious tribal slightly smarter apes had their culture/ideologies/software changed from their instinctual ‘Law of the Jungle’ which they have been practicing for millions of years to civilized commerce, tolerance, and at its very core, respect for private property. We discuss the process that tamed/civilized us, a process that was the result of our actions, but not of our conscious planning, similar to how cells inadvertently created the respiratory, circulatory, nervous, etc. systems that made up multicellular organisms. As Carl Menger asks:
“How can it be that institutions that serve the common welfare and are extremely significant for its development come into being without a common will directed towards establishing them?”
Hayek answered this monumentally important question via an evolutionary/competitive process that goes more or less as follows. If we envision mankind about 100,000 years ago, we would see a sort of petri-dish of competing cultures(languages/concepts/rules/laws) that are being ‘naturally selected’ based on their ability to grow the groups that contain them relative to other groups. Customs/concepts/rules/etc. that inadvertently cause their respective social orders to grow whether it’d be via conquest, successful defense, migration into, imitation, etc., will expand their order AND the very customs/concepts/rules/ideologies/etc. which helped them thrive. Every rule/law has an effect in the productivity/growth/survival of a social order. Given that a society/tribe is likely to have dozens of such rules it is impossible to know the exact impact of any one of them when considering the overall competitiveness of a society/order. For simplicity’s sake let us focus on just one rule, what is the optimal punishment for theft? In the tribal past a sterotypical tribe might believe in some Sun-god. The very existence/discussion of the concept among members of the tribe, coupled with inevitable dreams which would make such concepts seem real and shared among the tribe, would be enough to greatly solidify such mythology/religion. The shaman sacrifices the virgin and it happened to rain the next day thus making the “science” certain/settled. If the rains didn’t come, perhaps she had to be sacrificed facing another direction. Again, what matters is how certain ideas make enough sense to create the ‘echo chamber’ that leads to them being carried out and propagated. Let’s assume that in culture/tribe ‘A’ when a man steals he is killed which might deter many thefts but decreases the number of people in the group and all the productivity that this person might contribute in the future. In tribe ‘B’ they cut off a hand, and in tribe ‘C’ 10 lashes. Let’s assume that tribe A’s custom/rule of killing the thief actually proved to lead to a “fitter” social order. Perhaps it turns out that cutting off the hand led to an unproductive person that became a big drain on rest of tribe and a weak/useless fighter when it came to offense/defense so it was better if he was dead, and that lashes proved to not be enough of a deterrent which led to many thefts and retaliatory violence which turned out to be more costly than losing a member of the tribe. For simplicity’s sake let us assume that this was by far the most important custom/rule affecting the growth/fitness of the social order, and that because of this, tribe/culture ‘A’ eventually displaced the others so that its kill-thieves rule/custom survived while the other punishments disappeared. The kill-thieves rule, is the result of human action, yet not the result of conscious human planning or design with the reasoned or conscious goal of having a more competitive/fit social order. The real designing of this rule or cultural element was made, not by innate instinct or human reason, but by ‘natural selection’/competition/’group selection’/’cultural evolution’.
This concept of ‘cultural evolution’/’group selection’ allowed Hayek to identify a sort of ‘third dimension’/source/mechanism for discovering/spreading knowledge which was neither instinctual (tied to our genetics/biology), nor the result of our conscious reason. As Hayek liked to refer to it, it was a mechanism for creating/spreading information which laid “between instinct and reason” and is the largely unknown/understood source of knowledge that played the vital role in the evolution of the market process and those related social institutions. Omnipresence, the ability to be everywhere at all times is another concept that would provide a great benefit to religions that used it to describe their God. Without God’s omnipresence you could get away with breaking the rules that give society order and only have to face the consequences brought upon by fellow men. But if God is everywhere, watching your every move, you will be much more likely to follow those rules that give your society a productive social order. A similar case can be made for the concepts of “sin” and “evil”. Did clever men “conspire” to create our religions to control us? Of course not, like the ‘market process’ they too “are indeed the result of human action, but not the execution of any human design”. These concepts/rules help enforce constraints on what for brevity’s sake we’ll refer to as our evolved tribalistic(‘small group’)/primate-like nature/instincts/’law of the jungle’, which for millions of years were shaped by things like cannibalism, rape, tribal warfare and other practices which are now generally seen as abhorrent and whose relatively recent suppression via culture/religion/law enabled the emergence of the ‘Social Organism’/civilization. Growing up is about programming/molding our flexible brains into learning all of these rules and thus rewiring them to be as happy as possible even though many of these restrictions go counter to our ‘uncivilized instincts’. We have tentacle porn, Q.E.D. Obviously the molding/brainwashing fails quite often when we engage in rape/torture/militarism/war/”sin” and more. One can easily speculate about how the simplicity and pro-private-property character of Judaism’s Ten Commandments (‘Thou shalt not steal/murder/’commit adultery’/ ‘covet(neighbor’s…)) and monotheism helped it be more ‘viral’ and thus be ‘naturally selected’ over other beliefs/religions that might have been more complex/confusing/contradictory and also be less respectful of private property thus inadvertently foregoing the emergence of the market process and corresponding ‘Social Organism’/Civilization.
Rules relating to sex are crucial given the biological importance and potential turmoil relating to it. For example, at some point we developed strong taboos/punishments for sex with animals. For example, the Hebrew Bible mentions:
Whosoever lieth with a beast shall surely be put to death.” Exodus 22:18
And thou shalt not lie with any beast to defile thyself therewith; neither shall any woman stand before a beast, to lie down thereto; it is perversion.” Lev. 18:23
For the Hittites we have:
If a man has sexual relations with a cow, it is an unpermitted sexual pairing; he will be put to death
However,
If a man has sexual relations with either a horse or a mule it is not an offense
We are now in a position where we can appreciate the following Hayek quotes:
So… Since the increasing respect for private property (freedom) and resulting superior competitive knowledge discovery and subsequent order and civilization was not so much the result of our “reason” (no wise economists designed Capitalism/free-markets), our “reason” usually falls for coercive competitionless central planning which destroys the evolution-evolved and far superior ‘competitive knowledge discovery’ that created our social order to begin with, which helps explain why the economically clueless masses and their “experts” as a whole constantly attempts to self-destroy via Socialism/Communism/‘massive public sectors’/‘Great Leaders’ with the best of intentions.
Again, we must see Communism/’Central Planning’, Lenin’s Bolshevik Revolution, as well as all other Socialist/Communist uprisings and our own modern push for ‘Democratic Socialism’ as an almost inevitable spread of viral self-reinforcing economic fallacies and incentives that were just bound to finally spark in truly sustainable reactions. A young idealistic Russian could worry about how to make a good living in the always-uncertain and competitive private sector, or by joining Lenin and his Socialist Bolsheviks he could become a hero to mankind by just forcing farmers/others to give up (share) their grain/wealth to feed a bureaucracy/monopoly of “experts” who would plan a superior order. Sign me up! Again, we must focus on how the ideas (echo chambers) create ‘incentive structures’ that lead the slightly smarter apes into either carnage or civilization. Mises:
CovidMania self-destruction is essentially rooted in the same economic ignorance that led to the Communist/Socialist uprisings of the 20th century. Instead of the seeming complexity of the socioeconomic order leading to ignorant/destructive economic central planning/paralyzing by “experts”, we have the complexity of the biochemical order/’immune system’, motivating the slightly smarter apes into a similarly draconian Soviet Union-like paralyzing “rule by experts/scientists”. The slightly smarter apes, due to their tribalistic nature and economic ignorance, are always intensifying an ‘echo chamber’ of central planning wherever there is seeming complexity like with the environment, pollution, economy, racial disparities, ‘climate change’, and so on, and CovidMania has just helped all of those economically clueless minds accelerate the growth of the ‘central planning by experts’ echo chamber and resulting self-destruction. Just like a simple comparison making use of competitive knowledge discovery could have easily shown that Communism was inferior to free-markets yet it lasted for over 70 years in the Soviet Union and still persists in Cuba, we see the same thing with CovidMania via simple comparisons of non-lockdown/mask countries like Sweden vs. others, and bureaucrat’s increasing ‘cognitive disonance’ or desire to look away, ignore, or silence their critics.
Thus an ‘echo chamber’ of ignorance, ‘cognitive dissonance’, perverse economic incentives, etc. is materializing and destroying the global economy similarly to how the Soviet State formed. This global socioeconomic calamity is NOT some sinister conspiracy, the leading apes of Communism like Marx and Lenin proudly persuaded the masses in the open, and so does the new crop of economically ignorant “expert” apes like Bill Gates and Klaus Schwab (head of the World Economic Forum whose book ‘The Great Reset’ beautifully captures all the ‘central planning’ fallacies just like Karl Marx’s Communist Manifesto did for the 20th century). The ‘echo chamber’ of central planning fallacies and accompanying socioeconomic hardship simply attracts more minds faster than the proper free-market understanding can make them immune to it. It is monumentally important that we see the rise/spread of Socialism/Communism in the 20th century and our new Coromunism and similar ‘Great Reset’ central planning ideologies, not as the result of malice/“evil” or stupidity, but out of understandable economic ignorance. As Mises so eloquently warns:
Again, the politicians, “experts” and masses are just the slightly smarter apes destroying themselves with what they think they see and understand with electron microscopes, similarly to how we destroyed ourselves with how we thought Communism/Socialism would improve society. In just the last 105 years the economically ignorant slightly smarter apes and their “experts” have been fully behind two massive tribalistic world wars and have the planet littered with nukes. It is just uncivilized slightly apes running wild, without the slightest clue of how freedom works because their “reason” had little to do with it.
How do we fix this? Easy, we become “civilized” slightly smarter apes by understanding how freedom and resulting decentralization and emergent competitive knowledge discovery is what leads to peace, superior morals, harmony, and socioeconomic order, instead of coercive/monopolistic ‘central planning by experts’.
Just like Mises/Hayek/Hazlitt/friends saved the Western world in the 1920–40s by educating the masses via seminal works like Hayek’s “The Road to Serfdom”, whose brilliant and condensed version reached millions of US homes, and Henry Hazlitt’s ‘Economics In One Lesson” which became the intellectual foundation of many future economic educators, It looks like we just have to repeat their formula, hopefully for the last time.
