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Comment by ttoinou | Hacker News Reader

But politicians that make decisions like this are more rational and have access to more information, benefiting in the long term ? Let me doubt it

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No system involving human decision-making approaches perfection, but politicians and civil servants are tasked with making decisions in the collective interest on the advice of experts. In countries with strong institutions and the requisite checks and balances, they do a better job than the invisible hand of the market and the transitory utility of individual citizens. That's why most of us would rather live in Europe or the US than in Somalia or Turkmenistan.

Aren't both those places the result of policies that were purported to be better than the free market?

You are right, there are no systems that are perfect when they involve humans. However, you used two countries that are, respectively, failures of socialism and communism as an argument against the "invisible hand of the market".

I prefaced the sentence mentioning the invisible hand with "in countries with strong institutions and the requisite checks and balances" in anticipation of that objection. Collective decision-making is open to abuse, but it is possible to create institutions, traditions, and laws that limit that abuse while allowing us to enjoy the benefits of a longer-term view of the public good.

Presumably Smith's 'invisible hand' also applies to competition between economic systems. Looking at migration patterns, while people generally try and move from poor to rich countries, in cases where the economies are roughly equivalent in personal wealth, they also tend to move towards social democracies with strong safety nets. Migration between the Nordic countries and the USA tends to flow east, for instance.

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