Posts tagged with: f.a. hayek

Via the Volokh Conspiracy:

Mario Rizzo and Gerald O’Driscoll point to dueling letters to the editor from 1932 in The London Times by John Maynard Keynes and F. A. Hayek on whether government spending can help cure contemporary economic woes. The letters, unearthed by Richard Ebeling, show that today’s debates over economic policy are, in many respects, a rerun of the debates of the 1930s.

Everything old is new again! Related: Fear the Boom and Bust

Blog author: jcouretas
Wednesday, November 5, 2008
By

We’ve posted Rev. Robert A. Sirico’s Oct. 30 speech delivered at the Acton Institute annual dinner in Grand Rapids, Mich. The dinner also featured a keynote address from Rev. John Nunes, president and chief executive officer of Lutheran World Relief, and remarks from Kate O’Beirne, National Review’s Washington Editor, who accepted the Acton Institute Faith & Freedom Award in honor of the late William F. Buckley, Jr.

Excerpt from Rev. Sirico’s speech:

Today we find institution after institution “in the tank” for unrestrained government intervention. One is reminded of Italian philosopher Antonio Gramsci’s call for the left to begin a long march through the institutions of Western Civilization. The left, it seems, got the memo. How will we respond to this disheartening situation? Now is no time to retreat in disarray. Now is no time to stumble. There remains a remnant … a potent remnant who has not bowed the knee to big government. My call to you tonight is a transparent one: strengthen the soldiers of that remnant. In particular—strengthen that band of brothers gathered with you tonight, the Acton Institute.

Never in Acton’s nearly 20 year history has our message been more essential than right now. As an institution that cherishes the free and virtuous society, we are living through this thing with all of you, and we need your help to continue. Our history of integrity; the quality of our products and programs; the responsible tone with which we approach the questions at hand, all speak to the fact that this work is worthy of your investment. I humbly ask for it with the promise that we will use it well and prudently.

The fact of the matter is that too many of us have become much too comfortable and yielded to a perennial temptation, the temptation to take our liberty for granted. Those of you who have invested in the work of the Acton Institute over the years know—and especially those of you who have had a chance to see our latest media effort “The Birth of Freedom” know—we believe the time has come for a renewal of those principles that form the very foundation of civilization, the same principles that make prosperity possible and accessible to those on the margins.

Liberty is indeed, as Lord Acton said, “the delicate fruit of a mature civilization.” As such it is in need of a nutritious soil in which to flourish. In this sense you and I are tillers of the soil, if you will.

Liberty is a delicate fruit. It is also an uncommon one. When one surveys human history it becomes evident how unusual, how precious is authentic liberty, as is the economic progress that is its result. These past few weeks are a vivid and sad testimony to this fact. As a delicate fruit, human liberty as well as economic stability must be tended to, lest it disintegrate. It requires constant attention, new appreciation and understanding, renewal, moral defense and integration into the whole fabric of society.

Read the entire speech here.

Jim Aune, blogger-in-chief at The Blogora, complained yesterday about his health care treatment. He says, “I have been in constant pain for 36 hours. I actually used a cane to go to the office yesterday for some meetings. The problem? I have a trapped nerve in my abdomen from a double hernia repair a year ago. I got shot up with steroids about 3 weeks ago, and that worked for about 5 days, but I still can’t walk without a ripping sensation (as if my right leg were being separated from my side).”

That sounds horrible. He continues: “I’m about to go see the doctor again today (he’s a nice guy, as family practice doctors usually are, as the anesthesiologist at the pain clinic), so I decided to read up on the Internets about this condition. Now, a little learning, especially online, is a dangerous thing, but it appears that entrapped nerves have gone from happening in 1% of hernia repair patients to closer to 40%, and the speculation is that the new use of plastic mesh is a possible cause.”

It seems that Aune somehow associates John Stossel with his problem. “Enter the biggest jackass on television: John Stossel of 20/20, who believes that the market solves all problems, and that any government intervention in that frictionless market creates no end of bad ‘unintended consequences.’”

What is Aune’s argument against Stossel? After citing a Daily Kos item, Aune contends, “markets are wonderful things, but they only work in cases of ‘symmetric information.’ That is,they work efficiently when both parties to an exchange have nearly similar information.” (Last night’s episode of ER dealt with a very similar issue).

Markets only work in cases of symmetric information. Is this true? Or is the opposite true? Hayek’s observations about the nature of diffuse and unequal information are the basis for his arguments against the practicality of state intervention. As Steven D. Levitt and Stephen J. Dubner put it in their book Freakonomics, “We accept as a verity of capitalism that someone (usually an expert) knows more than someone else (usually a consumer).” Medical care isn’t the only example of information asymmetry, of course. Typical ones include car sales, or especially car repair, but they can apply in any instance where there is particular expertise involved.

Levitt and Dubner go on, “But information assymetries everywhere have in fact been mortally wounded by the Internet.” Now it is true that in practice, as in Aune’s experience, there are all kinds of limits on the potential for the Internet to even out information. It takes time, access, and a certain amount of patience to educate oneself about certain medical conditions, for example. Thus Levitt and Dubner go on to admit, “The Internet, powerful as it is, has hardly slain the beast that is information asymmetry.”

Aune later asserts, “markets do not work efficiently when information is asymmetric.” Maybe they don’t work as efficiently as they might otherwise, but they still seem to work, and perhaps better than any other option available to us. And there are methods for the sharing of information and such that does not necessitate government involvement (independent ratings, consumer reviews, and the like).

It’s not clear what Aune’s solution is (if there is one in his complaint), but I take it that Aune is arguing at least implicitly that the government needs to be the entity that solves the problem of information asymmetry. Would he rather have no choices, even the limited ones he is inadequately informed about, and instead have the government decide for him? Why don’t we just make doctors government employees? Then they can enforce the course of treatment they deem best.