Future Industries and Prosperity Unknowable

A group of economists wants:

The group called for a green “new deal” and a focus on targeted industrial policy, a clamp down on tax avoidance and evasion, as well as raising taxes on those best able to pay and real financial reform and job creation, “un-squeezing” the incomes of the majority, empowering workers and the promotion of a better work-life balance.

“Clamp-down”? Sounds downright authoritarian. Will tax agents bust into your home?

If it were obvious which industries offered the best path to a better life, people would rush in to exploit that situation. There would be massive investment and training.

But it is not obvious which industries offer the best path to a better life. That is one reason why central planning fails. Politicians make huge, risky commitments of a country’s resources on an unknowable future. If they are wrong, the country is worse off and it takes years and political will to end it. Resources were wasted on a failed effort.  Further, not everyone wants to work in that industry. People need to find work that they like, are good at, and add value. That cannot be done by a central planning committee.

Free market processes offer a safer path because they are decentralized trial-and-error experiments. Failures affect a limited number of people and resources, and are ended sooner.  The scope of experiments are limited to companies, industries, some employees, and some investors.  Not an entire economy.



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