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The Fallacy of Simplicity

By Timothy D. Terrell
December 01, 2003

One of the most valued books on my shelf is a compilation of hundreds of R.J. Rushdoony's essays, under the title Roots of Reconstruction. One of the many gems in that book is a five-page article from 1971 on the fallacy of simplicity. In it, Rushdoony describes the yearning men have for simplicity when faced with overwhelming complexity. There is too much about society that one does not understand and cannot control. The individual feels powerless when confronted with surroundings that seem chaotic, and distrusts what he does not comprehend. He yearns for a way out. He wants a quick, simple answer, and will give up both wealth and freedom to whoever promises that simplicity.

A complex society is a highly specialized society. And, because specialization means that a person does not have to be a jack-of-all-trades, but can focus on a handful of things one can do relatively well, a complex society means simplified lives for individuals. As Rushdoony wrote, "When a man no longer has to build his own house, grow his own food, and protect his own family, his ability to be free and productive increases." He understood the principle of the division of labor.

Wages, Prices, and Profits

In a free economy, one can get information on what to specialize in, and how far to specialize, by looking at wages, prices, and profits. Wages, prices, and profits are a way of communicating the availability and desires for various goods and services. They enormously simplify decisions about what to use, what to produce, and how to produce it. To make a decision about buying gasoline, for example, does not require the individual to do a lot of research or understand economic theory. One does not have to know that there has been a war in the Middle East that resulted in a decline of 5 percent in oil exports out of the Persian Gulf, and that one's own need for another gallon of gasoline is more vital than the need of a certain New York City commuter but less vital than the need of a delivery van driver in Denver. One observes that the price has risen, and cuts back on gasoline purchases. The decentralized decisions of millions of individuals results in lower gasoline consumption by those who least need it.

A price system, then, simplifies our society. But because prices are not planned by some visible group "in charge," prices seem to be another inexplicable force making life more unpredictable. Yet here is the problem: people seek visible planning and coordination of society to replace only apparent chaos of the decentralized social order.

The Austrian economist Ludwig von Mises explained how government planning squelches the more effective decentralized planning of individuals:

One of the characteristic features of our day is that people use many names for the same thing. One synonym for socialism and communism is 'planning.' If people speak of 'planning' they mean, of course, central planning, which means one plan made by the government: one plan that prevents planning by anyone except the government. A British lady [Barbara Wootton]' wrote a book entitled Plan or No Plan , a book which was quite popular around the world. What does the title of her book mean? When she says 'plan,' she means only the type of plan envisioned by Lenin and Stalin and their successors, the type which governs all the activities of all the people of a nation. Thus, this lady means a central plan which excludes all the personal plans that individuals may have. Her title Plan or No Plan is therefore an illusion, a deception; the alternative is not a central plan or no plan, it is the total plan of a central governmental authority or freedom for individuals to make their own plans, to do their own planning. The individual plans his life, every day, changing his daily plans whenever he will.1

The Government Planners

Government planners, in their conceit, latch on to the fallacy of simplicity, namely that society is simple enough for the planners to obtain and digest all the relevant information they need to make good decisions. They believe that computers can make up for the deficiencies in the information-processing power of the human brain, and ignore a more fundamental problem - what do they do with relevant information that cannot be observed, measured, or typed into a computer? But the simplicity-seeking mind tosses out this unsettling difficulty, and the fiction of omniscience and omnipotence is maintained.

Number-crunching central planners have long been with us. Jeremy Bentham (1748-1832) developed what he called a 'felicific calculus,' which would help legislators in their planning according to the 'pleasure-pain' principle. Ironically, this was a development from the celebrated Adam Smith, who was not exactly the foremost proponent of central planning. But Smith's simplistic views of mankind (among other errors and inconsistencies) contributed directly to the flaws of later thinkers like Bentham. As Joseph Schumpeter wrote of Smith, "Human beings seemed to him to be much alike by nature, all reacting in the same simple ways to very simple stimuli, differences being due mainly to different training and different environments." This thinking led to essentially anti-Christian consequences in Bentham. Because Bentham's philosophy placed humans in a passive role, being pushed from one place to the next by the search for pleasure and the avoidance of pain, he essentially eliminated morality. There could be only erroneous calculations of pleasure and pain, which presumably could be corrected by education.

The economist Arthur Cecil Pigou (1877-1959), who taught at Cambridge for many years, was an intellectual descendent of Bentham. Pigou is generally regarded as the father of welfare theory. That's not the theory of government checks to the poor, but the theory of human welfare: an attempt to figure out what makes mankind better off by measuring costs and benefits. Bentham's legacy to Pigou was a utilitarian ethic, combined with an idea of deficiencies in the laissez-faire principle. Pigou took these ideas and ran with them, ultimately renouncing Smith's 'invisible hand' idea that found order in decentralized markets. Pigou thought markets would lead to chaos. Instead, he preferred the apparent simplicity of government planning:

It is as idle to expect a well-planned town to result from the independent activities of isolated speculators as it would be to expect a satisfactory picture to result if each separate square inch were painted by an independent artist. No 'invisible hand' can be relied upon to produce a good arrangement of the whole from a combination of separate treatments of the parts. It is, therefore, necessary that an authority of wider reach should intervene....2

R.J. Rushdoony, in the essay mentioned at the beginning of this article, told of a professor of his who wrote on the blackboard the number of acres of arable land in the United States, the number of bushels of grain that could be produced from that acreage, and then the number of people in the world who could be fed "if someone (presumably with his intelligence) organized and centralized all this and gave the right orders." But, as Rushdoony pointed out:

At that time, in the 1930s, a similar plan in the Soviet Union had destroyed production and led to famine; he refused to believe that this was anything but propaganda. If proven to him, he would no doubt have said that the peasants were resisting progress when they resisted collectivization. In any case, he was guilty of the fallacy of simplicity.3

Rushdoony understood that only God grasps all creation in its totality, and that God is therefore the only one who can give simple answers to complex problems. Ultimately, the fallacy of simplicity is the effort to become like God, to be able to know and comprehend everything. It is a failure to submit to the law of God, and to substitute the humanistic law of man.

Notes

1. Ludwig von Mises, Economic Policy: Thoughts for Today and Tomorrow (Irvington-on-Hudson: Free Market Books, 1995), 28.

2. Arthur C. Pigou, Economics of Welfare (London: MacMillan, 1932), 195.

3. Rousas J. Rushdoony, Roots of Reconstruction, Vallecito: Ross House Books, 1991), 775.


Topics: Biblical Law, Economics, Government

Timothy D. Terrell

Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, South Carolina. He is assistant editor of the Quarterly Journal of Austrian Economics and is an Associated Scholar with the Mises Institute.

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