Dear Crisis Experts, You Are the Crisis
Assuming there’s a 2020 NFL season and Anthony Fauci attends a Washington Redskins game, it’s not unreasonable to suggest that Fauci will be the smartest individual at the stadium. Some say his intelligence is formidable.
At the same time, Fauci’s mental capacity will be very small relative to the combined intelligence of every fan cheering (one can hope!) at FedEx Field. Whether 50,000 are in attendance or there’s a full-house of 82,000 (maybe the Dallas Cowboys are in town), one brilliant mind is no match for the collective wisdom of the masses. Their combined knowledge puts them at a major advantage against one, or for that matter, many.
All of the above very neatly explains why free, unfettered markets correlate so well with positive economic outcomes. Market signals are arrived at through the combined genius of tens of thousands, millions, and billions of human beings.
At the same time, it hopefully also explains why central planning always fails in miserable fashion. It’s not that there weren’t intelligent people running some of the Iron Curtain countries of the late 20thcentury, and it’s not that those in power didn’t avail themselves of expert opinion at times. The problem then was that individual genius, no matter how substantial, couldn’t come close to measuring up to the combined knowledge of the masses of people who make up what we call a market.
This rates mention at the moment in consideration of how much members of the political class are relying on experts in pursuing an effective response to the new coronavirus. In empowering individual genius, it’s not unreasonable to suggest that politicians are creating a crisis where there otherwise wouldn’t be one.
Consider Fauci. In a recent press conference, he said it would be necessary for coronavirus testing to double so that the lockdowns asphyxiating economic activity could be lifted. Is Fauci correct? It’s fairly easy to say he’s not correct, and not because he supports the lockdowns.
It’s likely Fauci’s incorrect simply because just as central planners routinely failed when it came to planning economic outcomes in the 20th century, so does that same central planning fail now. Fauci once again may be brilliant, but he’s no match for a U.S. economy comprised of hundreds of millions of individuals making infinite informed decisions every second of every day.
The same applies to Bill Gates. Some believe that his undeniable genius as a businessman positions him to knowledgeably opine on how we the U.S. and the world can come back from the virus. Gates has observed that businesses would be troubled with or without the lockdowns, unemployment would be higher with or without them, so the plan should be to continue them until we’re better situated in terms of a vaccine.
Is Gates right? It’s once again difficult to know. For one, his analysis ignores the “unseen”; as in what would individuals and businesses have done had the response of politicians to the virus been something like “You’re all adults. Be careful.”
If so, it’s not unreasonable to suggest that Fauci, Gates and other intelligent individuals would have strongly called for Americans to shelter-in-place, and tens of millions would have done just that. At the same time, Elon Musk and investors like Michael Burry might have responded in more intrepid fashion; calling for individuals and businesses to work around a virus of unknown lethality.
And with the truth about the virus more than vague, some businesses would have shut down in total, wholly fearful of brand risk related to “hot zones” emerging on their property. Others, perhaps staring bankruptcy in the face, would have risked the reputational pitfalls related to the new virus spreading on their property. Other businesses might have tried something in between. The main thing is that the varied responses, which could only have emerged from a less muscular response from experts and politicians, would have produced essential information about what the best economic solution(s) to the virus might be.
It should be added that “venture buyers” would have helped guide the decisions of businesses. We all know some individuals who, upon being made aware of the virus, bought weeks’ worth of groceries, hand sanitizers, books and hand soap with an eye on quarantining for weeks. At the same time, others continued to live as they did before; patronizing any business, park, public or private place that would have them. Crucial about the actions of free people is that their surely varied reactions in response to “You’re all adults” would have amounted to highly valuable market intelligence for businesses.
Which is the problem with expert-driven, government solutions no matter how locally they’re made. What’s one-size-fits all amounts to politicians and those close to politicians substituting their highly limited knowledge for that of a marketplace that incorporates the knowledge of everyone. In other words, reliance on experts for decisions about how we should live and protect our health in an all-new era leads to blindness.
Just as centralized decision-making by the very few led to immense desperation during the 20thcentury, so logically does it lead to sub-optimal outcomes in the 21st. Some have said that expert-informed political responses to the new coronavirus have resulted in cures worse than the disease, which is really a blinding glimpse of the obvious. Anytime the possible brilliance of the few is substituted for the decentralized knowledge of the marketplace, odds are high that something resembling “crisis” will reveal itself. Experts are routinely called on as the answer to “crises,” when it’s more realistic to assert that the experts are the crisis.
So are Fauci and Gates wrong, or are Musk and Burry incorrect? Should local, state and national politicians seek economic re-opening, or is this virus so lethal that we must remain locked down for weeks? No one really knows. Since no one does, better for governments and experts to do nothing so that well-informed markets can bring clarity to that which is opaque.