It has long been a saying of mine that economics is so complicated that it’s simple. This, of course, seems like a blatantly paradoxical and invalid statement. Yet to claim it quite so boldly suggests that I must have some sort of explanation behind it. So, what do I mean?
Put simply, the fact that an economy is constituted by an infinite and un-quantifiable number of factors makes policy prescription as basic as allowing it to operate naturally and freely. This is because an economy is made up of tens of millions of individuals all constantly making an infinite number of decisions based off of subjective value scales. These can only be known to the individual who possesses them.
No central planner or team of central planners could ever be capable of knowing all of this information or acting efficiently with it no matter how clever or wise they are. Any attempt at making economic policy based off of “advanced” econometrics is doomed to failure because the economy is just too complex to be inputted into their convoluted and ultimately useless equations.
Therefore, concocting a wise economic policy is as simple as keeping the central planners’ role limited and allowing the economy to progress naturally. Of course, to prove that this is the best route requires complex thought processes that have been expertly put forth by Mises, Hayek, Hazlitt, Rothbard, and the like. However, for the layman who is intimidated by the thought of economics, it is useful to remember that its very complexity is what makes it extraordinarily simple.
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