Lorenzo (Thinking Out Aloud) does it again, with a great post on why the anti-free market crowd just doesn’t get Hayek.

Key passage:

Early in his essay, Hayek establishes the central role of individual preferences in his analysis when he writes:

The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

Hayek is taking it for granted that people’s preferences matter and, moreover, if not equally, at least equivalently. That everyone is on the same evaluative plane.

Suppose, however, you have preferences about other people’s preferences and you believe those preference about their preferences—what we might call meta-preferences—have a trumping moral claim. To the extent of having the right to control, in effect edit, what preferences other people can act upon. Such a claim might be straight-out paternalism (editing their preferences allegedly for their own good), but need not be. Then you will be unmoved by Hayek’s analysis because you disagree quite fundamentally with his framing.

I will call such confident meta-preferences inquisitorial preferences (as in “no one expects the Spanish Inquisition”) because there is a presumption of morally trumping right to edit other people’s preferences. As I noted in a recent speech, down the ages:

When one looks at the denunciations of vulgar merchants and “immoral” commerce, again and again one sees the real complaint is that they attend to what people want, not what the critic thinks people ought to want. That they attend to what people are like, not what people allegedly ought to be like.

An observation Milton Friedman had made almost 50 years ago (via):

What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself.

Free commerce and inquisitorial preferences are antipathetic. And any social project that requires strong control over others involves inquisitorial preferences.

In the case of Hayek’s analysis, if you have inquisitorial preferences, then points that Hayek makes such as:

The answer to this question is closely connected with that other question which arises here, that of who is to do the planning. It is about this question that all the dispute about “economic planning” centers. This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.

will lack power, because editing other people’s preferences is so much the point.

Similarly, when Hayek writes:

But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation.

again, if one is concerned about people having and acting upon the “wrong” preferences, then their power to attend to attend to their immediate circumstances is not only not a strong point, it is precisely that you do not want them to do, to a greater or lesser degree.

Extra points for the Monty Python reference!

And, for the win:

To make a claim to the right to inquisitorial preferences is to make a very strong claim of cognitive in-equivalence: to make a claim of seriously greater moral understanding and social knowledge. This is a claim of strong cognitive, particularly moral, superiority. Such a claim of superiority is surely very attractive. It is a fine thing to think of oneself as a member of such a cognitive elite. If one has a strong preference to think of oneself in such a way, then Hayek’s analysis is going to pass you by.

So, when Hayek writes:

… the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.

you are likely to be unmoved on two grounds. First, such actions are likely to be serving preferences that “require” editing by those of “superior” moral understanding. Secondly, granting such actions as eminently useful activities tends to undermine any notion of cognitive superiority based on a profound level of superior knowledge.

For Hayek’s essay is not merely an essay about knowledge, it is an essay about ignorance. About what we do not know and other people do. Worse, what we cannot know and other people will. It is an essay enjoining cognitive humility. If one’s sense of identity is based on a notion of profound cognitive (particularly moral) superiority, then Hayek’s essay will not only be unpersuasive, it will be positively antipathetic to your fundamental views. It will be particularly so to your sense of identity.

In critical thinking terms, we could say that those who claim a right to inquisitorial preferences — i.e., those who claim cognitive and moral superiority, and who should therefore be allowed to overrule the preferences of others via central planning — suffer from intellectual arrogance. They have an inflated opinion of their own knowledge and abilities relative to those of others, and they are also metaignorant — ignorant about their own ignorance — regarding the unique information of time and place required to make optimum decisions.