H-WEB: De Long on Scott, Planning & Hayek

[Robert Hettinga <rah@shipwright.com>]

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Date:         Sun, 1 Nov 1998 01:37:43 EST
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Subject:      H-WEB: De Long on Scott, Planning & Hayek
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>>  Hayek On The Web  <<   --   Modernism  /  Government Planning

J. Bradford De Long, "Not Seeing One's Intellectual Parents"

On the Web at:

http://econ161.berkeley.edu/Econ_Articles/Reviews/Seeing_Like_a_State.html


>From the review:

"There is a lot that is excellent in James Scott's _Seeing Like a State_.  It
begins with a romp through eighteenth- and nineteenth-century German
forestry--and the failure of the foresters to understand the ecology of the
forests that they were trying to manage.  It continues with a brief digression
on how states tried to gain control of their populations through maps,
boulevards, and names.  These are prequels to a vicious and effective critique
of what Scott calls "high modernism": the belief that the planner--whether Le
Corbusier designing a city, Vladimir Lenin designing a planned economy, or
Julius Nyerere "villagizing" the people of Tanzania--knows best, and can move
humans and their lives around on as if on a chessboard to create utopia.

Then the focus appears to waiver.  There is a chapter on agriculture in
developing economies that characterizes agricultural extension efforts from
the first to the third world as analogous to Lenin's nationalization of
industry, or Nyerere's forced resettlement of Tanzanians.  But the targets --
the agricultural extenders who dismiss established practices -- lose solidity
and become shadows. They are no longer living, breathing, powerful rulers,;
instead they are the "credo of American agriculture," the "catechism of high-
modernist agriculture," the "high-modernist aesthetic and ideology of most
colonial trained agronomists and their Western-trained successors" -- truly
straw men.

The conclusion is a call for social systems that recognize the importance of
what Scott calls "metis": a Greek word for the practical knowledge that a
skilled and experienced worker has of his craft.  Most such practical
knowledge cannot be easily summarized and simple rules, and much of it remains
implicit: the devil is in the details. T he key fault of "high modernism," as
Scott understands it, is its belief that details don't matter -- that planners
can decree from on high, people obey, and utopia result.

Well before the end of the book an economist is struck by a strong sense of
deja vu. Scott's declarations of the importance of the detailed practical
knowledge possessed by the person-on-the-spot -- of how such knowledge cannot
be transmitted up any hierarchy to those-in-charge in a way to do any good--of
how the locus of decision-making must remain with those who have the craft to
understand the situation--of how any system that functions at all must create
and maintain a space in which there is sufficient flexibility for craftsmen to
exercise their metis (even if the hierarchs of the system pretend not to
notice this flexibility)--all of these strike an economist as very, very
familiar.

All of these seem familiar to economists because they are the points made by
Ludwig von Mises (1920) and Friedrich Hayek (1937) and the other Austrian
economists in their pre-World War II debate with socialists over the
possibility of central planning.  Hayek's adversaries--Oskar Lange and
company--argued that a market system had to be inferior to a centrally-planned
system: at the very least, a centrally-planned economy could set up internal
decision-making procedures that would mimic the market, and the central
planners could also adjust things to increase social welfare and account for
external effects in a way that a market system could never do.  Hayek, in
response, argued that the functionaries of a central-planning board could
never succeed, because they could never create both the incentives and the
flexibility for the people-on-the-spot to exercise what Scott calls metis.

Today all economists--even those who are very hostile to Hayek's other
arguments (that government regulation of the money supply lies at the root of
the business cycle, that political attempts to reduce inequalities in the
distribution of income lead to totalitarianism, that the competitive market is
the "natural spontaneous order" of human society) -- agree that Hayek and
company hit this particular nail squarely on the head.  Looking back at the
seventy-year trajectory of Communism, it seems very clear that Hayek (and
Scott) are right: that its principal flaw is its attempt to concentrate
knowledge, authority, and decision-making power at the center rather than
pushing the power to act, the freedom to do so, and the incentive to act
productively out to the periphery where the people-on-the-spot have the local
knowledge to act effectively.

In short, by the end of his book James Scott has argued himself into the
intellectual positions adopted by Friedrich Hayek back before World War II.
Yet throughout the book Scott appears to be ignorant that the intellectual
terrain which he has reached has already been well-explored.

This is quite distressing ... "

J. Bradford De Long, "Not Seeing One's Intellectual Parents".  Review of
James Scott (1998), _Seeing Like a State: How Certain Schemes to Improve the
Human Condition Have Failed_. (New Haven: Yale University Press).   7/4/1998

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References

Peter Boettke (1990), The Political Economy of Soviet Socialism (Boston:
Kluwer Academic Publishers: 0792391004).

Friedrich Hayek, ed. (1935), Collectivist Economic Planning: Critical Studies
on the Possibility of Socialism (London: Routledge: 0678007659).

Friedrich Hayek (1937), "Economics and Knowledge," Economica 4, pp. 33-54.

Friedrich Hayek (1945), "The Use of Knowledge in Society," American Economic
Review 35, pp. 519-30.

Frank Knight (1936), "The Place of Marginal Economics in a Collectivist
System," American Economic Review 26:2, pp. 255-6.

Abba Lerner (1934), "Economic Theory and Socialist Economy," Review of
Economic Studies 2, pp. 51-61.

James Scott (1998), Seeing Like a State: How Certain Schemes to Improve the
Human Condition Have Failed (New Haven: Yale University Press: 0300070160).

Ludwig von Mises (1920), "Die Wirtschaftsrechnung im sozialistischen
Gemeinwesen," Archiv fur Sozialwissenschaften und Sozialpolitik 47:1, pp.
86-121."

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Professor of Economics J. Bradford De Long, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://econ161.berkeley.edu/




Hayek On The Web is a regular feature of the Hayek-L list.

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-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'