We’ve talked about our disagreements with universal basic income (UBI), or basic income guarantee (BIG), here before, but it still surprises me when some libertarians come out so strongly in favor of it. I experienced this again today when I tweeted, “This one goes out to all of the libertarians supporting a universal basic income…” and posted the famous F.A. Hayek quote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
It’s a devastatingly good quote by Hayek. It perfectly sums up the economic calculation problem, which shows the flaws of central planning. Everyone likes to imagine they can think up a wonderful government program to solve some problem, but without perfect knowledge or the information that prices unfettered by government interference provide, it is impossible to ensure that resources can be adequately directed to their most efficient uses (or even their nonuse to be accumulated for later capital investment).
While most people seemed to agree with my point about universal basic income—a government program that is certain to run out of control from its original design—some people countered back by pointing out that Hayek supported a basic income.
So what? If we’re going to say that the economic calculation problem is a serious concern for central planners, then why shouldn’t we say that Hayek should have taken his own advice? If we accept that this quote by Hayek is an argument against central planning (it is) and also accept that a basic income provided by the state is a product of central planning (it is), then it is obvious that Hayek contradicts himself. There are no exceptions as to whether central planning is in line with libertarian principles: it can either be workable or it cannot.
A claim that you have the ability to rise above the typical mistakes made by other designers of government programs due to your superior knowledge of economics and politics because you’re a libertarian serves to demonstrate the point that Hayek was making about the “curious task of economics.” The mistake of thinking you can centrally plan some solutions no matter the reason can happen to even some of the best and brightest as we see with Hayek’s mistake.
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