Broadside Books is hosting a symposium to “identify liberalism’s greatest vulnerabilities and determine where and how to wage the war against liberalism.” The whole thing is worth your time, but “National Affairs” editor Yuval Levin’s contribution stands out:
At the center of the health-care debate is the question of whether economic efficiency is best achieved by market forces and open competition or by an expert board of rationers. At the heart of the dispute about financial regulation is the question of whether risk can best be assessed by price signals or by a regulatory agency charged with discerning which companies are most important to the nation’s financial stability based on a complex statutory formula. From what kinds of cars we can buy to what kinds of light bulbs we’re allowed to use, the regulatory state and its pursuit of centralized rational control is once again ascendant
Its ascendance, though, makes the left more vulnerable, not stronger. The regulatory state, and the technocratic premises that underlie it, are big fat targets for both political attacks and empirical critiques. The claim to rational control is, for one thing, deeply anti-democratic, and therefore frequently unpopular in a democracy. At least as important, though, it is horrendously ineffective in its own terms—again and again it produces not competent, effective management but colossal inefficiency. And the reason is obvious: Centralized management suffers from profound ignorance. No one can know enough to make it work; only everyone knows enough and, when it comes to economics, only markets can aggregate what everyone knows.
The intellectual foundation of Levin’s critique was laid many years ago by the Austrian economist Freidrich Hayek. Hayek is undergoing a revival, and for good reason. Even some liberals are waking up to the limits of Keynesian theory. If there is an icon for the right in the age of austerity, it is Hayek. For years now, after all, our government and intelligentsia has been enthralled by the fatal conceit.