John Tamny on Experts vs. the Wisdom of Markets

The wisdom of crowds is an extension of the wisdom of markets – and it's better than most experts at processing information.

They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers

By Tamny, John



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John Tamny | Author | RealClearMarkets 

They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers

Don’t Plan to Reopen; Just Reopen – AIER  April 16, 2020

Dear Crisis Experts, You Are the Crisis | RealClearMarkets May 2, 2020

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John Tamny, Director of FreedomWorks’s Center for Economic Freedom, makes several important observations about the problem with lockdowns and bans on “non-essential” business that has eluded the so-called “experts”:

“Experts are routinely called on as the answer to ‘crises,’ when it’s more realistic to assert that the experts are the crisis,” he writes in a recent piece for Real Clear Markets. 

In particular, the one-size-fits all diktats handed down from on high prevent the discovery of information from small-scale experiments. Individuals, acting freely as adults, possess local knowledge, which accumulates and multiplies across the millions of participants in society. This phenomenon has been called “the wisdom of crowds,” but perhaps the “wisdom of markets” would be a better term.

Thankfully, the crowds are beginning to wake up, and along with them, markets are coming back to life without any central planning required.

Two weeks ago, Randal O’Toole showed how government distorts incentives in transportation, and how that distortion has exacerbated the COVID-19 epidemic in New York City via mismanaged mass transit. Yet we continue to pour billions into these failing systems. When the market operates without intervention, mistakes tend to be limited – not subsidized – and the firms and individuals with bad judgment quickly go out of business.

Ideally, Tamny notes, the government wouldn’t need to declare an end to the shutdown – people could simply re-open as they see fit, taking into account the risks and rewards, and learning from each other’s experience.

Some will say that this situation is different because of the invisible nature of the coronavirus, and its infectious potential. Tamny is no stranger to this refrain that “this time it’s different.” He joins me this Sunday to debunk the central planning “one-size-solution” crowd and to discuss his article, “Don’t Plan to Reopen; Just Reopen,” for the American Institute for Economic Research.

We’ll dissect the recent stock market rally – is it a Fed-inflated bubble or something more sustainable? Tamny is an optimist, assuming people are allowed to go back to work on their own schedule, rather than on the governors’ fickle timing.

Finally, we will also discuss the possibility that states are exceeding their constitutional powers in continuing the lockdowns. Are we witnessing the kinds of “grassroots tyranny” that Clint Bolick warned of decades ago? And if so, should the Federal government step in as Trump seems to want to do, or is there another solution?

You won’t want to miss this episode of the show of ideas, not attitude.