The very long U.S. election season is here. What to keep on mind? Two things strike me as fundamental.
1. Knowledge is complex and dispersed. This means that innovation (and progress) depend on trial-and-error innovation in a competitive environment – one not encumbered by the heavy hand of you-know-who. This is especially important in a season when the candidates have policies, plans and programs for everything.
2. In fact, there will always be a political class (includes their many private sector cronies) working hard on cronyist plans and policies.
Millions of voters have sat through some version of an economic principles class. How many of them have encountered these two fundamental principles? Too few, I worry.
These two fundamental observations are facts of life and in conflict. That’s what makes it interesting. The economist Peter Boettke has elaborated and even imagined a derby involving “Three S’s”. Smithian gains from trade, Schumpeterian competition, and, third S for stupid.
All three are always in play. And it’s election season.