Mises's Answer to Would-Be Conspirators: You Will Lose

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Over half a century ago, Ludwig von Mises made a crucial observation.

 

The capitalistic social order, therefore, is an economic democracy in the strictest sense of the word. In the last analysis, all decisions are dependent on the will of the people as consumers. Thus, whenever there is a conflict between the consumers’ views and those of the business managers, market pressures assure that the views of the consumers win out eventually.

I have long believed he was correct. Like Mises’s disciple Murray Rothbard, I am a student of conspiracies. They all have this in common: the seek leverage through the state. They instinctively know that Mises was correct, that they are the servants of customers in a free market order. So, they seek to rig the markets by means of the state.

Once a person comes to grips with Mises’s observation, conspiracies appear less formidable. The state is a week reed when compared to the long-run effects of liberty. The free market prospers under liberty. It expands its control over production and distribution.

This leads me to the topic at hand.

Alex Jones and Paul Watson wrote a really interesting report on the CEO of Google, Eric Scmidt. He is a big supporter of Obama. They say that he is behind a new organization, Zeitgeist. It is a supplement to the Bilderberg organization. It may be about to absorb Bilderberg.

I have been fascinated for almost half a century with the attempts of various conspiratorial groups to influence the affairs of men. This has been the goal of power-brokers for as long as we have records of human societies. The quest for power, by way of specialized knowledge and behind-the-scenes influence, goes back to the story of the Garden of Eden. Men are always trying to get shortcuts to power. They want to have inside information. They want to be the powers behind the throne, at least in those cases in which they are not convinced that they sit on the throne.

POWER AND THRONES

One of the basic themes of writers who specialize in conspiracy historiography is at the people on the thrones are really not the true source of their own power. It becomes difficult to maintain this when you are dealing with somebody like Josef Stalin or Adolf Hitler. When you get a true megalomaniac on the throne of power, and he personally tells everyone what to do, on pain of death, it is difficult to maintain that there are any powers behind the throne. These rulers seem to have a kind of built-in sniffer that enables them to locate people who think they are the powers behind the throne, and those people tend to disappear.

Nevertheless, when it comes to the exercise of power, every person on a throne is dependent on information. The better the information he has access to, the more effectively he can wield power. The difficulty is this: people do not want to tell strongmen on the throne that what they had been told before is a pack of lies, or worse, utter nonsense. That can get you killed. So, the quality of the information that flows upward to the person on the throne is always suspect. So, the man on the throne attempts to have multiple pipelines of information. But the more pipelines of information there are, the more confusing events get.

The flow of accurate information is the crucial resource. The person without accurate information is flying blind. I think that this, more than anything else, is what brought down the Soviet Union in 1991. The more complex that a society gets, the more difficult it is to gain access to reliable information.

Then there is bureaucracy. It is difficult to enforce your decisions, no matter how powerful you are.

It would not surprise me if some of the non-technicians at the top of Google have some vision of a future which they think they are capable of engineering, the way that a technician engineers a circuit. But if you look at the history of the Internet, you see how things get out of control very fast. The Internet was the product of DARPA. DARPA is a military research organization. The reason the Internet was invented in the late 1960s was because of the threat of nuclear war. The military wanted a communication system that would withstand multiple nuclear attacks. It had to be decentralized. So, they invented the Internet to provide this decentralized communication system. But what grew out of that project is vastly beyond anything that anybody could have conceived in the late 1960s. The whole world is being restructured by that project, which now has little to do with nuclear war or military communications.

The same is true of the bright fellows who think that this massive decentralized flow of information can in any way be controlled by a group of technicians at the top of the system. There is no top of the system. That is the whole point. That was why the Internet was invented. It was specifically designed so that there would be no top to the system. In this respect, it is clearly the most ingenious technological invention of all time. It was centrally planned to be totally decentralized.

THE NEXT BIG THING

The ability of any group to identify the crucial piece of information does not exist. A few people may spot it, but they probably have no power. Furthermore, even if they have access to people with power, they are in competition with so many other people, who also claim to have spotted the next big thing. Nobody knows what the next big thing is. Or, at least if somebody out there knows it, he probably does not have any money, and he probably does not have any influence.

We are back to the dilemma that was posed centuries ago by a Scottish philosopher named Adam Ferguson. He discussed society as the product of human action, but not of design. Anyway, it is not of human design. In our day, the premier exponent of that position was F. A. Hayek. Hayek made it clear that the decentralized knowledge that the free market can draw upon is vastly greater than the knowledge possessed by any committee. Centralized knowledge cannot compete effectively with decentralized knowledge, when people who possess this decentralized knowledge seek out ways of profiting from it. The more intensely capitalized the free market is, the better the knowledge available to entrepreneurs.

Nobody knows which entrepreneurs will be successful, and which will fail. All we know is that most of them will fail. But the knowledge which they bring to the marketplace benefits specific customers. Customers pay for this knowledge and for the results of this knowledge. There is this massive, decentralized, profit-seeking system that traffics mostly in information. The Soviet Union could not possibly keep up with this. No centralized tyranny can keep up with it. That was Hayek’s point, beginning in the mid-1940s.

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