Quotation of the Day…

by Don Boudreaux on February 22, 2014

in Complexity & Emergence, Growth, Innovation

… is from page 63 of the manuscript of Deirdre McCloskey‘s forthcoming volume, The Treasured Bourgeoisie: How Markets and Improvement Became Virtuous, 1600-1848, and Then Suspect (original emphasis):

If profit occurs, or doesn’t, the economy is articulating something worth attending to.  It says, “Do more of this.  People want it sufficiently to pay for it.  Don’t do that.  People won’t pay for it.”  The articulation comes from the dollar votes of ordinary people, a democracy of what people are willing to pay.  A market society therefore will not build a pyramid or a Taj Mahal, because ordinary people are not willing to pay for them.  National glory, or more exactly the glory of kings and politicians and their wives, does not get supplied by a profit-making firm except by governmental purchase – itself untested by cash bids from the actual citizens, because the wherewithal for the governmental purchase is compulsory taxation.  The test of governmental purchase is at best the result of a majority vote overriding the preferences of the minority, at worst the result of an elite’s self-interested will.

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