Dan Sanchez points out the undeniable truth that most of the economic damage we’ve sustained over the last two years wasn’t due to the pandemic itself, but to the incredibly disruptive public health measures almost every western government implemented in response (with huge connivance on the part of the legacy media and the social media companies):
… it will not be the coronavirus making us poorer, but the fallacy, embraced by officials from Beijing to DC, that central planners can manage society-wide problems, like “healing” a global pandemic or “fixing” a global supply chain.
As the great economists Ludwig von Mises and F.A. Hayek explained, societies and economies are inconceivably complex, and it is literally impossible for anyone to centrally plan something so far beyond their comprehension. To think otherwise is, as Hayek called it, a “fatal conceit”.
The fatal conceit of central planners is manifest in the very term “global supply chain”. The metaphor of a “chain” portrays the economy as something static and linear: something simple enough for a single mind to “fix”.
But, as Leonard Read vividly showed in his classic essay “I, Pencil”, even a seemingly simple good like a pencil is not the product of a single supply chain. Every good in the economy is descended from a vast “family tree” of innumerable factors of production. And all the family trees of all goods are intricately interconnected, making the economy, not a “chain”, but as economist Murray Rothbard depicted it, “a highly complex, interacting latticework of exchanges”.
This vast, dynamic latticework is self-healing and self-fixing: through the actions and interactions of its constituent individuals. Blundering, arrogant central planners only get in the way and make things worse.
That has been the lesson of free-market economists and social theorists going back to Adam Smith. The western world partly embraced that lesson, and it flourished as a result, becoming a beacon to the world. Starting in the 1970s, even Communist China emulated its example, opening up its markets. This was a humanitarian miracle for the Chinese people and a boon for us all. If not for Chinese manufacturing being integrated into the global division of labor, it is hard to imagine the west having the modern high-tech living standards and super-comfortable working conditions we enjoy (however precariously) today.
Whereas once China liberalized in emulation of the west, now the leaders of the “free world” are emulating (and, in the case of Canada’s prime minister, openly admiring) the authoritarianism of the CCP. As crises continue to mount, it is clear that this turn toward tyranny is putting our future at risk.
