This article was originally published by Austin Padgett at The Mises Institute.
Much of the developed world is slipping into a hyperregulated malaise. Growth rates are down across most major economies, and the developing countries are catching up to our errors almost as fast as they are growing.
Increasingly, even in the US, you would have to be outside the norm to afford a house by age forty. The median age of a first-time homebuyer in 2023 is the same as a repeat buyer in 1981. We’re not allowed to build and grow, but we’re told everything is ok as long as the stock market hasn’t crashed. When we point out that the system isn’t working, we are told we should be happy because degrowth is good for the environment.
It is time people stopped feeling obligated to justify their existence to a managerial class of unelected bureaucrats. Their incompetence and capture to powerful interests has been demonstrated enough times. There is utility in fighting propaganda by painstakingly digging through studies to highlight flaws in the constant stream of bad data and assumptions being used to rationalize our slavery. However, the only reason they can presume to have authority over our lives in the first place is that our society has broadly lost belief in our own agency.
The United States was founded based on the ideas of individual sovereignty and natural rights. Whether these values have receded in the West as a result of the death of God, some failure of the Enlightenment, or the incentives of the system, they are diminished and need reviving.
The presumption that leads Environmental Protection Agency consultant Professor Naomi Oreskes to generously tell us we “can still eat some meat” on a World Economic Forum panel also generates our impulse to negotiate for freedom rather than assert it. We try to prove we aren’t a cancer on the planet so they will let us go free as if begging a captor for our worthless lives. There is a shared presumption of control, a master-and-slave mentality. Unless we cut to the core of that mentality, we will exhaust ourselves having to endlessly justify every ounce of our existence.
A common criticism of our appeal to agency is that people are not rational; therefore, they must be protected from advertising, making their own healthcare decisions, or any number of freedoms the appointed experts deem us to be unworthy of or too stupid to be trusted with. It is a mistake to respond to this by arguing that people are rational or that a belief in freedom relies on that assumption.
Libertarians explain agency through the observable fact that people act purposefully, not rationally. Violating someone’s intent when they are not interfering with anyone else’s is a violent rejection of our individual sovereignty. While an individual’s ability to reason can lead to rational action, it does not presuppose it. Nor can we presume to declare ourselves as arbiters of rationality.
Much of traditional economic theory assumes that people are self-interested rational maximizers. Some advocates of free markets lean into this presumption as a justification for our ideas. When people are then inevitably seen to make suboptimal or seemingly random decisions it is labeled as a failure that needs to be corrected for their own good.
It still holds true that freedom increases rational action, but it is not from an individual perspective; it is from a collective evolutionary perspective. The deepest evolutionary incentive is for the propagation of the species, not the individual. This is why a free market that allows purposeful action benefits the collective, while social planning benefits a parasitic class of individuals.
The only way to maximize rationality within a collective is to allow for seemingly irrational, idiosyncratic individual behavior.
During World War II, there was a bombing mission so dangerous only volunteer pilots were assigned to fly. When flying these bombers, there was roughly a 90 percent chance you would be killed by shrapnel and a 10 percent chance of losing your engine and crashing. Unfortunately, the planes could not handle the additional weight of both a parachute and a flak jacket, so they could only wear one.
At first, the military was adamant that all the pilots should wear the flak jackets considering there was a significantly higher risk from shrapnel, but the pilots revolted, insisting on having a choice. Because it was a volunteer mission, the officers acquiesced, and the pilots matched the distribution of risk with 90 percent picking the flak jacket and 10 percent choosing the parachute.
This choice demonstrated a deep, evolutionary instinct to match the probability of the scenario, maximizing the upside while minimizing the chances of catastrophic failure (an instinct our public health officials failed to demonstrate when they locked us down and insisted on population-wide mandates for experimental RNA treatments in response to a government-engineered cold).
It may seem irrational for someone to dig a bunker or store a year’s worth of canned food, but the percentage of people who do will generally reflect the likelihood of requiring such preparation. This is perfectly rational from a collective evolutionary perspective. This process of matching the distribution of likely outcomes is routinely demonstrated in nature:
Probability matching has been observed in thousands of geographically diverse human subjects over several decades, as well as in other animal species, including ants [32–35], bees [36–38], fish [39, 40], pigeons [41, 42], and primates [43]. In virtually any setting where an animal is able to make a choice between A versus B in a randomized experiment, we observe probability matching.
The way all creatures make decisions is through adaptive probability matching. For example, let’s say you have a fish tank. If you feed your fish on the right side of the tank 75 percent of the time and on the left side of the tank 25 percent of the time, the fish will match that distribution, with 25 percent of them swimming to the left side of the tank and 75 percent to the right at feeding time. If you change the feeding pattern, they adapt their behavior. This distribution results in the least amount of food being wasted by hitting the bottom of the tank.
If you ask a social planner what the rational thing for a fish to do at feeding time, she might say it’s to swim to the right side of the tank since that would maximize its potential food intake. This is similar to how propaganda in public schools prioritizes four-year university attendance above other options, and how federal loan policies were put in place to push everyone to go to college based on the fact that on average, university graduates have a higher salary.
Metaphorically, public policy encouraged everyone to go to the right side of the tank. Of course, all this artificial tipping of the scales did was devalue college degrees and create devastating shortages elsewhere in the economy.
You will never be able to forcefully plan behavior in a way that maximizes rational collective action. An infringement of agency prevents the development of an individual’s character and capabilities, leading to an unconscious and weakened collective. The more freedom people must seek out through information and making their own choices, the better we can adapt to the fundamental uncertainty of life. This uncertainty requires a differentiated, antifragile approach, something a central planner would not even have the theoretical ability to do, due to their lack of distributed knowledge.
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