Pessimistically optimistic about the future.

Author:Boettke, Peter J.
Position:Report
 
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At fifty-five years of age and having been a professional economist for thirty years, I am pessimistically optimistic about our economic future. My bottom line is optimistic because, like the great Julian Simon (1983), I believe that the ultimate resource is the human imagination and that the great diversity of human ingenuity and creativity will help us find our way out of the numerous troubles that we have made and may make for ourselves. But I am pessimistically optimistic because the dominant mental models that human beings deploy to make sense of their interaction with each other and with nature are so fundamentally flawed and grounded in zero-sum and negative-sum moral intuitions.

We systematically underestimate the costs of blocking trading opportunities with one another and of curtailing the creative powers of the entrepreneurial spirit, and we systematically overstate the benefits of attempting to curb the excesses of self-interest through collective action by state power. I am an optimist because of the creativity of individuals and the power of the market; I am a pessimist because of the moral intuitions hard-wired into humans through our evolutionary past in smallgroup settings and the tyranny of government controls in the affairs of men. The logical outcomes of both are fundamentally opposed: complete and unregulated trade with all or isolation and war against all. Human history, I contend, can be seen as the long drama of these two forces battling it out to determine which norms of interaction will be dominant. Put another way, we can follow the Smithian propensity to truck, barter, and exchange, or we can follow the Hobbesian propensity to rape, pillage, and plunder. Optimism comes from Smithian propensities winning out over Hobbesian ones, whereas pessimism comes from the Hobbesian propensities sweeping aside the Smithian ones.

Which force will ultimately determine our future path will be a function of ideas. Economic logic and reality are not subject to popular vote any more than the law of gravity or the physical laws governing the flow of water in a river. Reality simply is not optional. But politicians, pundits, and the public often communicate a message as if economic policy is a question of popular will. There is no doubt that populations can vote for this or that economic policy, but whether the policy decided on will have the intended desirable consequences is not a matter of good wishes. Policy effectiveness is a...

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