Bruddah IZ
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THE CHESS-PIECES FALLACY
Back in the eighteenth century, Adam Smith wrote of the doctrinaire theorist who is "wise in his own conceit" and who "seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board." 3 Such theorists are at least as common today and have at least as much influence in shaping laws and policies. Unlike chess pieces, human beings have their own individual preferences, values, plans and wills, all of which can conflict with and even thwart the goals of social experiments. Moreover, whatever the merits of particular social experiments, experimentation as such can have huge economic and social costs. Although some social experimenters may believe that, if one program or policy does not work, they can simply try another and another after that, until they find one that does work, the uncertainties generated by incessant experimentation can cause people to change their behavior in ways that adversely affect the economy.
Some economists, including John Maynard Keynes, 4 saw the uncertainties about the future generated by the experimental policies of the New Deal administration in the 1930s as tending to discourage investment that was much needed to get out of the Great Depression. Boris Yeltsin, the first non-Communist leader of Russia after the collapse of the Soviet Union, likewise spoke of "our country— so rich, so talented and so exhausted by incessant experiments." Because people are not inanimate objects like chess pieces, the very attempt to use them as part of some grand design can turn out to be not merely unsuccessful but counterproductive— and the notion that "if at first you don't succeed, try, try again" can be a formula for disaster when consumers become reluctant to spend and investors become reluctant to invest when they have no reliable framework of expectations, since they have no way of knowing what will happen next in an atmosphere of unending experimentation.
