Peter Boettke summarizes’ F.A. Hayek’s famous 1974 Nobel Prize lecture on p. 83 of his new book The Struggle for a Better World:
At the start of Hayek’s lecture, he implores his audience to fess up to the fact that those in the economics profession had nothing to be very proud of, as they had made a mess of things.
This is not how one wins hearts and minds. No wonder Hayek was unpopular in his own profession! But he makes an important point that better diplomats still need to make today, again and again:
Hayek goes on to argue that the cause of the mess was the misconstruing of what economics can, cannot achieve as a science. Economics is a science of complex phenomena, yet the modern administrative state demanded an economics of simple phenomena to accomplish the policy tasks conceived.
Economists and the policy makers they work with need to be more humble. But humility does not come easily to people in public policy. In fact, there is a selection bias against it. People tend not to enter the field unless they believe they can come with a plan that’s better than what everyone else has come up with. This audacity is desirable to some extent–things would rarely improve if nobody thought improvement was possible. Market entrepreneurs must have the same audacity to succeed in their world. But many policy makers do not check their ambitions with enough humility. And unlike private entrepreneurs, there is no profit-and-loss system to let them know when they’re wrong.
Inertia Wins! 