Once upon a time there was a character named Smokey the Bear. Smokey would tell children, only you can prevent forest fires. Be careful with matches and campfires, and the forest will be safe.
Turns out Smokey was wrong — you can’t prevent forest fires. You can avoid tossing a lit cigarette into a bone-dry forest. But fire is an integral part of a forest’s ecosystem. If you try to prevent all forest fires, you create a tinderbox of underbrush. Sooner or later, a small random spark will ignite this tinderbox and millions of acres will burn.
What’s true of forests fires is true of the economy: we can’t control it.
You might say, this is a surprise? Here’s what I’m trying to get at:
- Sometimes I hear some of my fellow lefties describe how a just economy would work and I think, have you spent any time in the real world? What makes you think we could ever control the economy as much as you’re assuming? Life is not Sim City.
- At the same time, I’m not saying the market is inherently smarter than the government. This isn’t about the Wisdom of Crowds. Remember the crowds that were convinced housing prices would never go down? It’s not about whether the market or the government is smarter, it’s about forces outside our control — angry gods to which we can make offerings but cannot dictate outcomes.
How much influence can we have over the economy? Here’s a useful metaphor from forest management: controlled burns. Today, forest managers acknowledge we can’t eliminate all forest fires. Instead they use smaller, strategically placed fires called controlled or prescribed burns to get rid of the buildup of underbrush, dramatically reducing the odds of catastrophic fires. In short, by giving up the idea of controlling all forest fires, they’re able to gain a little control over the most dangerous fires.
Regardless of where we end up when we talking about shaping the economy, one thing is clear. We’ve got to start from a profound sense of the limits of our power.
