Russell Roberts does a little myth busting.

Andy Grove (who has helped transform the world and who I respect greatly) makes the following observation in a piece on energy policy in today's Wall Street Journal editorial page:

The first question that needs to be examined is this: If business's task is to generate revenue and profits for its owners, what is the equivalent task for a nation and its government?

But government can't have tasks. . . How can a diverse group of people with diverse interests have a task? . . .

Imagine writing an editorial along these lines, reprimanding these companies for being short-sighted and only caring about staying in business or trying to make profits. We all understand that making profits is what businesses try to do.

So why do we expect politicians to do something other than to try and stay in office? That's what they do. Don't ask politicians to do something they aren't motivated to do.

In the case of GDP, there is some incentive for politicians to pass legislation that enhances the prospects for growth. But that can never be a politician's goal. And politicians will constantly trade off growth for benefits to particular groups as long as those groups loom large in the political calculus of the politician. . .

But of course our "national strategy-setting and -execution machinery often seem broken." It isn't designed to work the way he thinks it does -- to solve problems. Public policy isn't run like a business because there's no gain to the players to run it that way. All the study in the world isn't going to change that reality.

I'm always mystified when people such as Grove show so little comprehension of the functioning of democracies. They long for totalitarian rule where liberty is irrelvant but the trains run on time. . . for a while at any rate until collapse. It may be that we will have a chance to observe a large society that tries to run itself in a way that Grove would like. Watch China.

Note the contrast. China has maintained political and human collectivism while gradually freeing the economic market. This has so far been very successful but is heading for a clash, since economic freedom and political collectivism are not compatible. India maintained political democracy while running a collectivist economy. It is now unwinding the latter, which will strengthen freedom of all kinds, so in that respect it is in a better position than China.

Is it true that "economic freedom and political collectivism are not compatible"? If so, can growth be maintained when economic freedom is constrained to damp down unrest? Can a society long endure without political freedom? It seems to me that societies that do not have both political and economic freedom are doomed to periodic collapse as they either sink into poverty or explode in protest.

We have evidence from the past that this is so, but the time scale was greatly elongated, enough to mask the effects so that they are most visible in hindsight. Times have changed. Things happen faster in large part due to speedy and affordable communication. Mushroom management is much more difficult in the age of cheap jets and ICT.

So it seems to me that we would do well to be rational, to abandon efforts to swim upstream against the tendencies of free societies, and seek ways to go with the flow, limiting our interventions to those that enhance society rather than oppose it. We may have cherished illusions about how things would be better if only yada yada, but it seems to me that there is wisdom in understanding and liking humans as they are.