Two articles – one from US context and another from Indian context. Both say one should not really hope/wish for a strong/brilliant leader. What we should instead hope is allowing the system to work. In US article, system is the market and in Indian case, it is its democracy.
We usually invoke Fredrick Hayek and the disaggregated nature of information to make a case for the free market. The free market works because, for example, the machinist knows that sticking chewing gum in the nozzle of the machine will fix it, but the central planner doesn’t. In his clumsy Austrian-English, Hayek called this phenomenon the “knowledge of particular circumstances”. Had he been Indian, he might instead have, more correctly and colorfully, called it jugaad. The free market works because no Dear Leader—however strong, decisive, honest or Hindu—could ever know the millions of jugaads it takes to produce, market and sell the good and services we consume.
Information is so disaggregated that no intertemporal model can reliably take a policy proposal as input and spit out GDP growth as output. Indeed macroeconomic models do a terrible job of accounting for observables and making predictions. The Economist reports that models used by the IMF failed to predict a downturn in all 220 instances studied. A random number generator did better with a success rate of 18%!
Because we can’t model a nation’s economy, we have democracy. Just as the market is a process to discover the right price, democracy is a mechanism to discover the right policy. Self-interested politicians go out and try and get information about what their constituents want. Then they come together at a legislature to truck, barter and haggle for the best deal that they can get. And it is this messy resolution of self-interest that you must trust over any pristine policy proposal plucked from without.
US case, obviously Hayek matters:
Why seek brilliance in politicians? There seems to be a widespread belief that America will be well again if a politician with the right plan and the intelligence to carry it out obtains public office.
What if that belief is false?
Just How Brilliant Can Any of Us Be?
FEE founder Leonard Read in his book Deeper Than You Think noted that, despite our intelligence, each of us can know very little: “No person, regardless of his pretensions, glimpses more than an infinitesimal fragment of the Truth.… No person is any more than an intellectual mite, a spiritual speck in the Cosmic Scheme.”
“Intellectual mites” can’t solve the fundamental economic problem of society. In his classic essay “The Use of Knowledge in Society,” Nobel laureate F.A. Hayek explains why. First, he points out the unimaginable powers we would need to centrally plan our economy:
If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic.
Hmmm.. It is is this human fallacy always wanting a strong leader to solve the ills. Least we realise that most problems cannot be solved by a central authority. They actually could make it worse as we heave learnt in several such cases. A strong leader usually gets awed by the power and gets corrupted eventually.
This same idea applies to economists as well. There is this huge belief and wishes for this supreme economist who can rid the country/region of all its ills. Well, people believing is still fine. What is more ironical is that the economist world also believes that he/she can indeed make this happen given how much of his/her training is on market supremacy and invisible hand.