In the Constitution of Liberty Hayek claims that society would be well served if we randomly selected 1 in 1000 people and endowed them with enough wealth so they could independently pursue any project of their choosing! The random part is important – if we had to decide as a “society” to reward a particular person for this windfall, we would be overselecting on existing known (mis)conceptions of meritorious activities and underselecting for characteristics that are representative of new, dynamic, earth-shattering, unknown ideas.
He even argued that most of these recipients would “waste” the money but that if only 1 in 100 recipients were successful, it may be well worth it. The evidence against this is that we’ve run this experiment in modified form via the various lotteries and tv contests and the like. Has there ever been a lottery winner or game show winner that went on to generate an earth shattering idea? A masterful novel or work of art? A change in how we view or consume culture generally? Offhand I cannot think of one, but we sure could test it. This guy surely fails the test. I feel bad for this guy. Here’s a greatest hits of lotto winner failures.
We’ll say more about this in the future. I was surprised when I first read it, but I think it has some merit. I would like about $4 million in the bank in order to feel “independent” enough to do great things. At 5% after-tax returns, that leaves $200,000 per year in income – enough to travel the world’s libraries and to purchase whatever I need to purchase to do great things. For the US to do this for every thousandth person, it would require an expenditure of $1.232 trillion.
Would that be a better use of $1.232 trillion than funding half the federal government? What would qualify as a good return?