In chapter fourteen of Friedman’s book he states that ‘the simplest solution to the problem of externalities’ is a ‘central authority figure who figures out what everyone should do and tells them to do it.’ However Friedmen then points out that in the world in both ‘theory and practice’ having a central authority figure is rarely if ever a good idea. His reasoning is simple. Because a normal person, say you or me, doesn’t know every detail of a situation we can’t give you an absolute solution that will automatically lead to an efficient outcome. We are bound by our lack of knowledge to make bad decisions in any central authority case despite our best intentions.
Perhaps you’ve experienced this personally with out realizing it. I’ve experienced it specifically with relationship advice. I have a wonderful friend who loves to tell me what to do with my life. Maybe you’ve met similar people. They seem to know the solution to every problem without knowing all of the facts. But the problem is they’re often wrong. They don’t know all of the facts and although they may be supremely confident in their advice and they sincerely believe that is what we should do if we were to follow their direction they might lead us to extremely inefficient outcomes.
This isn’t new to us as a society and a combination of these type of situations in everyday life and a sad history of abuse of authority by different central authority figures over the expanse of human existence has deposited a strong mistrust of authority deep into our collective self conscience. But as opposed to just finding another way to come to efficient outcomes and remove externalities we’ve come to instead find ourselves another authority figure.
That figure is God. An all knowing, loving, powerful being who many follow and look to as a central authority on many of life’s decisions. While his existence can be debated, and while I personally believe in him strongly, an idea of an omnipotent authority figure bring into many people’s lives and societies help to eliminate negative externalities caused by people’s immoral behavior. We are willing to trust God because of the attributes he has. He’s all knowing and so he can give ‘advice’ or tell us what to do with a knowledge of what is actually going on. A belief in god isn;t just a belief in an supreme being, it’s a belief in supreme efficiency that comes from such a beings existence.