Henderson on U.S. Intervention Abroad
By David Henderson
Unfortunately, the basic lesson about intervention has not been learned by the people who need to learn it most: the makers of U.S. foreign policy. A large number of them still seem to believe that they can design the world any way they like and that even if there are unintended consequences, these will be less negative than the positive they hope to achieve. In that sense, they have what Mont Pelerin Society founder Friedrich Hayek called the “fatal conceit.” Hayek applied the term to people who believed that governments could plan economies with many good results and few bad ones. But the term applies just as much to the conceit of foreign policy makers.
In his classic 1945 article in the American Economic Review, “The Use of Knowledge in Society,” Friedrich Hayek drove the final intellectual nail in socialism’s coffin by pointing out that, in the absence of a price system, a central government body could not have enough information to plan an economy. The information is decentralized in bits and pieces in millions of minds.
Although Hayek never applied this thinking to foreign policy, it does apply. A government that intervenes in another country’s affairs faces a similar information problem. The small number of government policy makers at the center have even less information about the foreign country than they have about their own country. The problem, then, becomes one of knowing which countries they should intervene in and, beyond that, even if they appear to have good grounds for intervening, how to intervene.
This is from David R. Henderson, “The Case Against an Interventionist Foreign Policy,” Defining Ideas, May 28. It’s a transcript of a speech I gave at the Mont Pelerin Society regional meeting in Fort Worth on May 21.