Sizwe Ngwenya: COVID-19 Knowledge-Problem: The Fatal Conceit of Lockdowns
Sizwe Ngwenya: COVID-19 Knowledge-Problem: The Fatal Conceit of Lockdowns
There exists, a permanent and elusive division, between the knowledge that each of us possess – in our own capacity - in order to make decisions in a particular time and place VS the knowledge possessed by others in facilitating decisions for their own circumstances. The characteristic of the knowledge I am interested in here is not scientific, academic or sophisticated - rather this knowledge is raw, informal, rudimentary, unorganised, local and is of the unsophisticated kind: it resides within each person and with which they utilise daily, to make innumerable decisions about how best to conduct their lives.
The owner of a bakery shop in Soweto, Orlando, possesses better knowledge and wisdom, about the operational ecosystem of that business than anyone else on the face of this planet who does not find themselves in those circumstances. An I.T specialist, in a Sandton-based global financial institution, who is tasked with running a systems implementation project, has knowledge advantage (insofar as various facets of that I.T project in question), over anyone in that organisation including the CEO. The bread-winner, of a small family in Cape Town, possesses better knowledge than anyone, about the needs and required resources - in that time and place - necessary to optimise the family’s minimum utility.
Knowledge of society is widely dispersed, diffused and is not concentrated to a few or any individuals: it is the summation, of bits of scattered microcosms of the knowledge of billions of people, each making a legion of decisions (consciously and unconsciously), that ultimately forms the sum parts of macrocosms of the total knowledge of society. The knowledge that each of us possess, is only a drop in the ocean relative to the innumerous decisions that are made by billions of individuals: this unorganised knowledge ultimately forms the end product of our societies and human civilisation WITHOUT ANY DESIGN AND WITHOUT ANY HUMAN CONCEPTION.
We may have a general understanding of this unsophisticated knowledge (in relation to our own lives and the decisions we make), but no one possesses the specificities of this knowledge and insights to comprehend 1.) the complex mental computations and algorithms that reside in the minds of others and 2.) the knowledge and wisdom, that each person has about the circumstances in that time and place.
Someone purchasing a cup of coffee, takes for granted questions as to the cosmology or origins of the milk, kettle, sugar, water, cup, coffee beans, acids, other ingredients and teaspoon used for that 1 hot beverage. That one cup of coffee is a spontaneous invisible order - of the knowledge of numerous people unbeknown to one another - each from different walks of life - each with different knowledge required to make that cup of tea - each scattered all over the world , but without knowing (and without their own design), somehow assist in the contribution of that one cup of coffee: this ultimately forms part of a bigger unplanned cosmic and complex incomprehensible social and economic order.
The albatross-neck of economics, centres on the problem of the allocation of scarce resources – yet what this essay attempts to highlight, is that the knowledge gap and calculus required for this task of resource allocation, appears unsolvable and unattainable (not just in economics, but in many facets of general life). Given that this knowledge is not concentrated to one person - nor is it possessed or collectable by any entity - how then, is it possible, that societies for centuries were able to co-ordinate resources and a myriad aspect of their lives if such information is disseminated, disintegrated and is not monopolised to anyone? Was there a transcendent being that magically systematised and mobilised knowledge on behalf of society?
The answer lies in decentralisation, coupled with the understanding that people left alone can make better decisions for themselves, for their own circumstances, time and place. Decentralisation, fuelled by the edifice of freedom, results in voluntary co-operation, language, traditions, common-law and the use of markets and prices to signal and convey information from one person to other: this leads to a complex, incalculable extended social and economic order - one without any single human design or orchestration - that no mind could Imagine or fathom.
Freedom is an indispensable pre-condition, to the preservation and advancement of human civilisation (including resolving the ‘knowledge problem’). When a crisis occurs, such as the COVID-19 global pandemic, it is easy for voices of collectivists, to spring from all walks of society - from the media, experts, intellectuals, theologians and other community leaders - all singing the same song, urging citizens to surrogate their liberties temporarily to government in exchange for safety. This act is seen by many as desirable, but one always needs to remember that the road to hell is always paved with good intentions.
Little regard is made as to how such actions may lead to fundamental changes and irreversible imprints to social, political and economic orders that may encroach civil liberties. The economist, Milton Friedman, recipient of 1976 Nobel Memorial Prize in Economics, warned that ‘there is nothing as permanent as a temporary government intervention’. History speaks with one voice and is unequivocal: once civil liberties are ceded to central authorities (even temporarily) , it is difficult to reset liberalism to what it was pre-crisis.
During a crisis, individual liberties are replaced with central-planning and paternalism (even if those central authorities do not possess the knowledge of particular time and place, to design an extended social and economic order). As the economist, Friedrich Hayek, the recipient of the 1974 Nobel Memorial Prize in Economics stated in the 1945 seminal paper, ‘The Knowledge Problem’, ‘To assume all the knowledge can be possessed by a single mind…. Is to disregard everything that is important and significant about the real world”.
The 21st century is a hyper-complex social and economic order – even the jobs in one organisation cannot be understood completely from a top-down approach (you need to be in that department or in that ground to have that knowledge). For state officials, to lockdown countries for exceedingly excessive periods, and thereinafter sit in a centralised office, and attempt to: co-ordinate which industries to open and close; to figure out how different economic sectors are inter-connected and how synergies are unlocked; to choreograph which school grades to permit back to class; when to travel and at which times; what capacity of employees to permit back to work without knowing the operational tenets and constrains of millions of businesses; what foods people should and should not consume and deciding how billions of persons should conduct their lives (without knowledge of their circumstances) displays an overt exercise of disregard of the knowledge-problem.
A problem that arises from attempting to plan societies centrally during the COVID-19 crisis or otherwise, is called the “The knowledge problem”. The economist, Friedrich Hayek, outlines, so eloquently, in his influential books ; ‘The Constitution of Liberty’ (1960) and “Law, Legislation and Liberty volumes 1 (1973), and one of the most influential essays of the 20th century ‘The use of knowledge in society” (1945) that in instances where planning of an order is attempted, this leads to what is now known as the ‘knowledge problem’. The knowledge problem is explained as follow: I quote [……. “Data” from which the economic calculus starts are never for the whole society “given” to a single mind which could work out the implications and can never be so given. The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.
The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality”- close quote
Proponents of central planning also fail to fathom, that attempts to orchestrate a social and economic order, through a central office, leads to bigger adverse effects on societies (mainly through other insidious consequences and blind spots that can only be uprooted through decentralisation). Without having the knowledge, that is available through decentralisation, this explains the destruction to economies, liquidity clogs, other innumerable insidious social, economic, health, psychological and unseen problems that are sponsored by the COVID-19 lockdown and central-planning.
To date, policy responses to COVID-19 pandemic have stated that lockdowns (at all costs) are the best solution to deal with crisis. It is very easy, but also tragic, that central-planners can make decisions (without both the knowledge of society to do robust trade-off analysis) since many themselves are never held accountable for those decisions and are exempt from the brute consequences of the realities of those policy choices. The justification for any dire consequences is always suppressed out by stating that if certain decisions were not taken things would be worse than what they eventually played out (In other words. good intentions, at all costs, outweigh even bad consequences).
The idea, that societies and human civilisation can never be conceived from rational central-planning and design, is one of the most difficult principles to accept by central planners and oftentimes some intellectuals. This difficulty is precisely because this principle itself does not appear rational or translucent, but rather it is counterintuitive. The belief, that one or a few minds possess this knowledge and are endowed with the gifts to co-ordinate social and economic orders, solely from the product of their minds, is false No mind could conceive of human civilisation today and how it will be in 5 or 500-years’ time. Instead human civilisation progresses through the spontaneous order of billions of people, traditions, trial and error and experiences to which the mind constantly adopts to.
The complex mind itself functions within a system (societies) which operate at a higher degree of complexity - much vaster than what the apparatus of a few minds on their own can design- let alone imagine they can design - independently. The knowledge problem , is a grim reminder about the limitations of the human mind and offers a resolute argument as to why any attempt to co-ordinate economic and social order, can never be done through a central office: state officials do not possess all decentralised knowledge nor do they have the knowledge as to how this ought to be collected without blind-spots, let alone whether this can be applied before a derivative of change (both in time and knowledge )rendering that knowledge outdated.
To quote Friedrich Hayek’s paper, The pretence of knowledge, 1974, ‘ The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility, which should guard him against becoming an accomplice in men’s fatal striving to control society – a striving that makes him not only a tyrant over his fellow, but which may well make him a destroyer of a civilisation which no brain has designed but which has grown from the free efforts of millions of individuals’- close quote.
Written by Sizwe Ngwenya – Views expressed are only of the author.