Quotation of the Day…

by Don Boudreaux on January 2, 2013

in Complexity & Emergence, Hubris and humility, Man of System, Seen and Unseen

… is from page xi of Allan Meltzer’s 2012 book, Why Capitalism?:

Capitalism disperses and limits power while the alternatives concentrate power in a few hands.

Meltzer’s point might sound trivial, but in fact it conveys a truth of great importance.  Here’s an effort of mine from back in 2006 to briefly make the case that those of us who counsel “Let the market handle it” propose a deeply sophisticated method for dealing with economic problems – a method vastly more nuanced and complex than the always-simplistic advice to “Let the government handle it.”  My concluding passages:

People too often suppose that large social problems can be solved only by deciding ahead of time which particular group of people and procedures hold the key to the solution.

While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.

So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.

Solutions to complex social problems require as many creative minds as possible — and this is precisely what the market delivers.

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