It’s from Dick Morris, writing with his wife Eileen McGann at FrontPage. It’s both their conclusion and their premise, regarding Obama:
We’re stuck not only with a socialist but seemingly an incompetent one.
The knowledge problem makes it impossible for a socialist to be competent. Therefore, all socialists are incompetent. It’s axiomatic.
Simply stated the knowledge problem refers to the incapacity of a central economic plan to successfully substitute itself for the detailed buy-sell decisions of individuals. Why? Because the central economic planners can never know the complex factors that go into those decisions to produce, sell, buy, or consume at the time they are decided. Free economies, as opposed to socialist economies, form spontaneously from and around those individual complex decisions and allocate resources in the most efficient manner possible.
Government planning bureaucracies can’t do that and can never improve their productivity because in the place of free informed individual decisions they use centralized compulsion. The individual information feedback loops that culminate at the point of each contract or sale are taken out, amputated, and the central plan has no means by which to apprehend such complexity. That’s how you wind up with a ride on Amtrac being subsidized at many times its price to a rider.
All “successful” socialist enterprises within a free economy are subsidized by the “golden goose” (the goose that lays the golden eggs) of free enterprise. All so-called “mixed economies” are efforts to take advantage of the goose without killing her. That is the point at which government is in business for itself, as a bureaucratic enterprise supported by unjustifiable mass theft from creators of wealth.
That’s why the bigger the socialist project gets, the larger the bureaucracy grows, and the greater the economic wreckage that follows.
And it always starts with geniuses who believe they know what goods people really need and how much they should and must pay for them via compulsory taxation, i.e., with other people’s money. It has frequently ended with the planners shifting from economic compulsion to political compulsion that leads to mass murder. (Sometimes it starts with political compulsion and mass murder, in fact.) Social democracy, the slow alternative to socialist revolution, can be just as bad, only falling into the “not with a bang, but a whimper” variant of social catastrophe.
This is not about a clash of competing theories. The competion from any theoretical point of view is long over. It’s about the difference between something that doesn’t work and something that does work, born out by the facts of history.