Reconciling National Vision with Hayek's Knowledge Problem

The Core Question

How can governments articulate meaningful national visions that provide direction and cohesion without falling prey to Hayek's knowledge problem?

The Tension

1. Need for Vision: As Drucker noted, organizations (including states) require "commitment to common goals and shared values" to function as more than "a mob"
2. Hayek's Knowledge Problem: Central planners cannot effectively coordinate dispersed information that only individuals possess

The Importance of National Vision

• Management of any enterprise (including the state) must establish clear objectives

• A country without a positive vision of the future may have no future

• Example: Dominic Cummings' suggestion that Britain's role should focus on becoming "the school of the world" through education and science

  Focus is hard to hold in politics. After 1945, Dean Acheson quipped that Britain had failed to find a post-imperial role. It is suggested here that this role should focus on making ourselves the leading country for education and science: Pericles described Athens as ‘the school of Greece’, we could be the school of the world. Who knows what would happen to a political culture if a party embraced education and science as its defining mission and therefore changed the nature of the people running it and the way they make decisions and priorities. We already have a head start; we lack focus. Large improvements in education and training are easier to achieve than solving many other big problems and will contribute to their solution. Progress could encourage non-zerosum institutions and global cooperation - alternatives to traditional politics and destruction of competitors. However, the spread of knowledge and education is itself a danger and cannot eliminate gaps in wealth and power created partly by unequally distributed heritable characteristics

The Dangers of Vision Implementation

• Government visions can devolve into "picking winners"
• Industrial policy can become justification for unsound economic decisions:
  • Industry subsidies
  • Protectionism
  • Market distortions

The Challenge

Finding a balance that:

• Provides national focus and direction
• Permits free exploration of emergent comparative advantage
• Avoids micromanaging economic decisions
• Creates institutional alignment without distorting market signals