The Pretense of Knowledge

Trawling through my collection of quotable quotes, I turned up this one from Hayek's above titled acceptance speech for the 1974 Nobel Prize in Economics:

To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm. In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights. But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims.

Opportunity cost, by which is meant the possible benefit foregone when options are reduced or even eliminated, is rarely factored into policy decisions. Cost-benefit analysis, even if carried out by an independent body, addresses only part of the problem - although it would, for example, rein in the wilder excesses of the Health and Safety Executive.

More generally, the desire of politicians to be seen to be 'doing something', and of bureaucrats to extend their own power surreptitiously, tramples on the precepts by which most people factor opportunity costs into their lives:

• First, do no harm;
  
• Leave well alone;
• If you're in a hole, stop digging;
• Mind your own damned business.