In the world of politics, governments are often imagined as benevolent, armed with perfect information and hearts of pure gold, ready to deliver us to the promised land. Australians, however, might be feeling a little less starry-eyed these days, having lived through years of pandemic-era central planning, ballooning government interventions and bureaucrats who believe they understand Australians’ lives better than they do themselves. It is high time to revisit two great intellectual traditions that dared to suggest the emperor might not be wearing any clothes: public choice theory and Friedrich Hayek’s critique of centralised knowledge.

Public choice theory, particularly the work of James Buchanan and Gordon Tullock in The Calculus of Consent, offers a radical idea. What if politicians, bureaucrats, and interest groups are not altruistic angels but ordinary people? People who respond to incentives just like everyone else? Politicians chase votes. Bureaucrats chase bigger budgets and cushier jobs. Interest groups chase favours.

The Covid-19 response in Australia was a case study in this delusion. Politicians and bureaucrats, cloaked in the infallible robes of ‘the science’, issued edicts with the swagger of Renaissance monarchs. Lockdowns, curfews and border closures rained down with an astonishing absence of humility with the pretence that they were based on ‘health advice’. But as Hayek so dryly warned in his 1974 Nobel lecture, the real task of economics is to show people ‘how little they really know about what they imagine they can design’.

Hayek’s concept of the ‘pretence of knowledge’ fits the current era like a bespoke suit. The fatal flaw of central planners is the belief that human beings, with all their messy preferences, biases and private information, can not only be modelled but forced to follow their dictates. But people are not particles to be directed by magnetic forces. Pandemic-era policymakers learned this the hard way; except they did not, because admitting uncertainty is apparently forbidden once you have appointed yourself society’s omniscient guardian.

The models that guided our fate? They were not exactly monuments to precision.  Epidemiological forecasts were designed to elicit panic, leading to significant and numerous unintended consequences. Yet the aura of scientific certainty remained despite Stanford health economist, Jay Bhattacharya, pointing out that lockdowns were counterproductive in fighting Covid-19.

A case in point was the infamous modelling by Neil Ferguson, epidemiologist from Imperial College London, not to be confused with the historian from the Hoover Institution. Ferguson’s team predicted Covid-19 would kill up to 510,000 people in the UK and 2.2 million in the US if left unchecked.  Despite Ferguson’s earlier equally alarmist and vacuous predictions for mad cow disease, bird flu and swine flu, governments everywhere, apart from Sweden, decided that collective economic suicide in the form of the dictatorial and draconian lockdowns were the right solution for supposedly democratic countries.

The foundation for these apocalyptic predictions? Ferguson’s model assumed that 37 per cent of transmission occurred in schools and workplaces, with schools having double the transmission rate of workplaces, despite knowing that few if any deaths occurred in the young. Not quite groundbreaking research. As it turns out, this number was flagged in the notes as ‘arbitrary’. Global economies were shut down based on a guess.

This epistemic arrogance is not reserved just for pandemics. It is the dominant mode of operation across Australian politics. Ambitious climate mandates? Housing interventions? Energy market interventions?  Regulatory crusades? All cooked up in well-appointed meeting rooms by people convinced they can outwit millions of individuals making decentralised decisions every day.

Remember that pre-election promise from the Australian Labor party about electricity bills being $275 cheaper? If you believe that one, we have a bridge in Sydney to sell you.

It even comes with a glossy model, complete with ‘arbitrary assumptions’ buried deep in the fine print.

Hayek pointed out the obvious: no single mind or committee of minds can ever grasp the scattered, tacit knowledge embedded in a society. Markets, messy and imperfect as they are, still beat top-down dictates by a country mile when it comes to processing information and coordinating human action.

Governments and bureaucrats are always quick to point out market failures, but somehow never manage to notice government failures, even though theirs are usually bigger, messier and far more expensive. Remember how the Productivity Commission estimated the National Disability Insurance Scheme would cost $22 billion annually at full operation, covering approximately 475,000 participants? This year, it will have cost $49 billion and counted approximately 700,000 participants.

Put together, public choice theory and Hayek’s epistemology deliver a cold splash of reality that centralised power breeds not only corruption but incompetence, a particular brand of ignorance masquerading as expertise.

Look around: bloated government agencies, the revolving door between the public and private sectors, and regulatory capture so blatant it could star in its own reality show. Even well-meaning policies often end up serving the few at the expense of the many.

What is the alternative? A politics that starts by admitting its own limitations. Decentralisation over command-and-control. Markets over mandates. Hard constitutional rules over ‘trust us, we know best’ improvisations. Maybe, just maybe, trust individuals to make better decisions about their own lives than a roomful of bureaucrats ever could.

Hayek was not an enemy of science. He was its defender, warning against the political weaponisation of scientific authority. It is a warning we ignore at our peril. The pretence of knowledge is deeply seductive. But in politics, as in economics, true wisdom begins with the modest admission that we do not know nearly as much as we think we do.

Politicians are not philosopher-kings.  They are ambitious individuals trying to survive in a brutal marketplace of perverse incentives. Give them sweeping authority and they do not turn into wise stewards.  They turn into empire-builders, blame-shifters and favour-dispensers.

Australia is not short of smart people in government. It is short on the kind of intellectual humility that would stop them from pretending they can engineer society. What is needed is not a changed political model but rather a more modest political class.

Consider this when you cast your vote.