The machinations of the global elites attending the World Economic Forum’s annual conference in Davos this week epitomize what economist Friedrich Hayek called The Fatal Conceit. The conceit arises from overconfidence in one’s ability to plan the economy and other people’s lives. Free markets also preserve greater freedom and facilitate broader human flourishing than government planning does. This could be the mission statement of the Davos crowd. Afterall, they came up with plans for a “Great Reset” after the pandemic. And they market their conference as solving the world’s problems. The real problem, though, is that they can’t. Klaus Schwab, the architect of Davos elitism, was trained as an economist but he apparently failed to understand Hayek’s critical insights about the market economy. The main economic problem we face is not finding the “optimal” way of arranging resources, but rather of how to utilize the decentralized knowledge of time and place towards satisfying human desires and enabling people to accomplish their various goals. Much of the knowledge relevant for economic calculation cannot be aggregated or represented statistically. It is local knowledge. Central planning cannot work because a single authority cannot access all this important dispersed knowledge, which Hayek calls “fragmentary and contradictory.” We can only utilize this information by leaving “the man on the spot” free to make his own decisions. And those decisions, to be effective, must be able to adjust to myriad changes in the economy — changes that are conveniently (and perhaps miraculously) transmitted via prices. But for prices to convey knowledge of relative scarcity, they must be allowed to fluctuate. And people must have an incentive to respond. Profit and loss, then, are important signals and incentives along with prices. Free markets have a robust price system that creates incredible wealth in free societies with limited government, rule of law, and private property. Highly restricted societies don’t. Yet the plans of Davos elites involve placing ever more restrictions on how people can generate energy, what kinds of vehicles they can buy, what kinds of materials they can use to build, and even what they can eat. These elites claim to know what the world’s biggest problems are: limited resources, income and wealth inequality, destruction of the environment, climate change, etc. In the name of these broad, and often ambiguous, problems, they impose “solutions” on the rest of the world. Hayek would have roundly criticized them for stifling human ingenuity by imposing their own agenda and plans on everyone else. The calamitous impact on freedom and economic prosperity of Davos elitism is plain to see. European countries are home to many of the Davos elite and they have been much more influenced by these elites over the past few decades than the rest of the world has. And their economies have suffered as a result. Germany, France, and the United Kingdom have grown much more slowly than the U. S., whether you look at the past 15 years or the past 30. What about freedom? The European Union has moved closer to China in its policy on speech, as has the UK, and the internet. It’s no coincidence that there are no trillion-dollar companies based in Europe, or that their tech sector has been hamstrung by regulations. And farmers across Europe have been protesting rising energy prices and restrictions on fertilizer. Davos elitism has led to stagnating European living standards. Even more dangerous, Europe’s global influence has declined precipitously too. The Russia-Ukraine war has revealed Europe’s weakening position. So has China’s rapid dominance in the electric vehicle market and its growing geopolitical influence around the world. Rather than ceding global dominance to China, the political regime in the U. S. has accepted the challenge of geopolitical competition. It’s not surprising, then, that President Trump had some harsh words for the Davos elites’ agenda. Yet even Trump and his administration are not immune to the Fatal Conceit that so worried Hayek. Trump and his team think they can fine-tune tariff rates across thousands of goods and dozens of countries to favor U. S. industry. But the more “tailored” their tariff policy, the greater the odds of favoritism and manipulation; and the more trade officials substitute their own plans for those of millions of people in the market. This planning mindset differs little, philosophically, from Davos elites who think they know what renewable energy production or recycling rates should be. Tariffs distort market calculation, just as green energy subsidies and mandates do. Hayek advocated free markets not only for their efficiency, but for their ability to address complex and difficult problems with human ingenuity. Free markets also preserve greater freedom and facilitate broader human flourishing than government planning does. If Schwab and the Davos elites spent their time developing plans for deregulation and strengthening the rule of law, they would be worth supporting. They don’t, though, because they doubt the effectiveness of markets. What’s more, advancing deregulation and the rule of law will not increase their influence or get their “solutions” implemented. In fact, it would undercut their status as “elites” altogether. But as Hayek might say, “That’s the whole point.” READ MORE from Paul Mueller: The Children of Elites Are in Trouble The Real Climate Change Disaster The post A Better Alternative To the Davos Elites appeared first on The American Spectator | USA News and Politics.