The fact that Biden is experienced doesn’t guarantee his ability to strategize the economy.

In a recent interview with MSNBC’s Stephanie Rule, President Biden answered questions about his age, 80, and how it could affect his performance if he were to serve a second term. Biden responded positively, stating that he has gained a lot of experience, saying that he knows more than most people and has more experience than anyone who has ever run for president. However, this answer is not enough as no president, particularly one actively involved in industrial policy and economic planning, can get away with such an answer. While it is easy to see that Biden, having devoted his entire adult life to politics, has a vast amount of experience and stories about the country’s political economy, acknowledging this does not mean that he is more knowledgeable than the majority of us, all things considered.

Biden’s comments raise fundamental questions about the kind of knowledge a president needs. Friedrich Hayek wrote The Use of Knowledge in Society, explaining that human communities face serious knowledge problems since knowledge is distributed among various individuals, each of whom knows more about their particular situation than anyone else. No one knows enough about material extraction, refining, manufacturing, transportation, etc. to make car tires, ballpoint pens, or even paperclips from scratch. Even those who create products as simple as this must find ways to harness this collective knowledge.

The presidential administration cannot replicate the efforts of many parties, nor can they know who each player is. The use of resources, whether microchips, metals, energy, vehicles, or anything legally considered “infrastructure,” so that the right things are produced in the right quantities for the right people requires cooperation, exchange, and trade of vast numbers of people. It is in vain for a regime that has worked so hard to influence to bring together the brightest and best people, find consensus, and oblige all economic actors to enforce the solution. The belief in this concept is what Hayek famously called “fatal conceit.” He proposed the idea of setting broad goals and institutional guardrails.

The Biden administration recently announced air quality regulations for power generators. The EPA proposes to cut carbon emissions from power plants by 90% over the next few decades by implementing “technology-based” standards: national fossil fuels with certain modifications that apply to combustion plants. The more governments use a command-and-control approach, the more they rely on their own knowledge rather than the collective ingenuity of the majority of people. Biden, like many before him, chose to rely on his team’s knowledge.

The United States is ahead of industry in imposing command and control regulations in exchange for allowing markets to achieve desired outcomes. In 2021, Australia had 238,528 federal regulations, while Canada only had 89,569 compared to the United States’ 1,094,447 federal regulations at the end of 2021. While we all have our own self-created knowledge problems to some extent, we need to recognize who has the best knowledge and what we call the best. We make it possible for talented people to take on all the challenges on their own. However, this is also a deadly conceit.

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