One of the things Ha-Joon Chang does in his user guide for Economics is describe the various schools of economic thought. He, of course, covers the Austrian School. And one thing that I discovered is that I, as a social democrat, actually agree with them on one point: that people are not always rational actors and that there is always an element of randomness involved in the history of our economy. Where I depart with them is their conclusions and prescriptions. And social democrats need to understand this and articulate it to the public a little better if they are to have the success I think they’re capable of.
The problem with the Austrian School’s conclusions is that they’re letting the perfect get in the way of the better. Since randomness and complexity is ubiquitous throughout our economic system, why attempt any government interference in the market at all? This, of course, is the false dichotomy we social democrats deal with everyday, even among left of center media outlets such as MSNBC which grilled Elizabeth Warren on whether she was a “Capitalist” or not.
And I bring this up because Social Democrats seem to assume the Austrian School’s point without being forthright about it. They seem to recognize that there is no way the central planning of a purely socialist economy could possibly work. This why they tend to work in more incremental ways. The problem is that they have, thus far, failed to concede that point and left most people with the impression that it is an either/or dichotomy. I mean God forbid any Social Democrat admit any overlap with a FreeMarketFundamentalist.
And it seems to me that now is the best time for them to get that point across by pointing to that other side of that coin (or double edge sword if you will (as expressed in the collection of essays: Can it Happen Here? In it, they make the valid point that while Trump might try to turn America into some kind of authoritarian state, the system is just too complex for him to pull it off. (He, in a weird sense, has mostly attempted to engage in a kind of central planning centered on him.) And thus far our recent history has shown that to be correct. It has been our complex bureaucracy that has resisted him at every turn. Therefore, it would seem imperative upon and beneficial to Social Democrats to show their intellectual prowess by publicly expressing their hesitation when it comes to “central planning” in any general sense.