Are people smart enough to run their own lives? Probably not. Are other people smart enough to direct everyone else’s lives? Definitely not.
So if no one is smart enough, what then can we do?
“Individually, we may not know much,” says Steven Horwitz, “but together, with the right institutions, we can learn from each other and, collectively, know a lot.”
The justification for human freedom is not that we are so smart that we can manage our own lives really well, but rather that we are not all that smart individually and the only way we can get smarter is by learning from each other.
Such learning requires the freedom to innovate and the freedom to imitate, and it must involve some sort of reliable process for indicating success. None of us knows enough to run our own lives flawlessly, nor enough to do so for others. That is why we need freedom, and especially economic freedom, to experiment, succeed or fail, and imitate to improve. Similarly, what John Stuart Mill called “experiments in living” are just as important for social and cultural progress as entrepreneurship is for economic progress.
The case for freedom made by classical liberals such as Hayek is premised not on highly rational individuals capable of making optimal decisions. Instead, it is a humble creed that assumes that we have real limits to our rationality.
And it is that humility that is the foundation for the case for freedom: the only way we can progress is by leaving people free to innovate and imitate by developing institutions that provide the information and incentives necessary to gauge success and motivate imitation.