Vice President Joe Biden recently said that, “Every single great idea that has marked the 21st century, the 20th century, and the 19th century has required government vision and government incentive.” To Biden, progress doesn’t just happen. It has to be systematically ordered, top down. Call it the intelligent design theory of economics. Biden is a classic example of the “man of system,” as Adam Smith explains in his Theory of Moral Sentiments:
The man of system … is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it … He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.
Human beings, of course, are not chess pieces. We move on our own, and have our own wants. And one of the laws of human behavior is that we will move wherever we can on the board to satisfy those wants.
Economists Armen Alchian and William Allen noted in their textbook Exchange and Production (1983) that while the birds and the bees and the sticks and the stones are unaware of the law of gravity, they must still abide by it. Likewise, even though men and women may be unaware of the laws of economics, they must still abide by them. Airplanes do not repeal the law of gravity, but must be designed to work within it. Likewise, sound government policy cannot repeal the laws of economics, but must work within them.
The man of system, however, often works on the assumption that state action can repeal the laws of science, economics, and arithmetic. He convinces people that they can consume more than they can produce, which is akin to saying that two plus two equals five.
When you promise two people two pies when there is only one to be had, disappointment by one party is inevitable. Pies have been promised to teachers’ unions, the elderly, the poor, corporations, public sector pension funds, the middle class, and more. But there aren’t as many pies as promised. Different groups, once in harmony, now fight over the scraps rather than producing more pies. The strikes and rioting over the new French pension fund reforms come to mind.
It need not be this way. The vice president should heed Adam Smith’s advice to the man of system, which today remains as relevant as ever:
In the great chessboard of society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.
It should be noted that Smith contrasted the “man of system” with the man of “humanity and benevolence,” who recognizes the differences in people and seeks to change without the threat of force. Given the vast powers of compulsion we have granted our government, the Bill of Rights notwithstanding, men of system are a very bad thing for the polity.
In the meantime, perhaps the next time Joe Biden gets on his beloved train to Delaware, perhaps he should ask himself whether government had any role in the 19th century development of the steam locomotive. It might surprise him to learn that it did not.
Alex Schibuola is a Research Associate at the Competitive Enterprise Institute in Washington, D.C. Ryan Young is Fellow in Regulatory Studies at CEI.