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Quotation of the Day…
Posted By Don Boudreaux On April 2, 2014 @ 7:23 am In Economics,Reality Is Not Optional,Seen and Unseen | Comments Disabled
… is from page 254 of Frank Knight ‘s 1956 collection On the History and Method of Economics ; specifically, it is from Knight’s 1950 address, to the American Economic Association, entitled “The Role of Principles in Economics and Politics “:
The serious fact is that the bulk of the really important things that economics has to teach are things that people would see for themselves if they were willing to see. And it is hard to believe in the utility of trying to teach what men refuse to learn or even seriously listen to. What point is there in propagating sound economic principles if the electorate is set to have the country run on the principle that the objective in trade is to get rid of as much as possible and get as little as possible in return, if they will not see that imports are either paid for by exports, as a method of purchasing the imported goods more efficiently, or else are received for nothing, or if they hold that economy consists in having as many workers as possible assigned to a given task instead of the fewest who are able to perform it? Of late I have a new and depressing example of popular economic thinking, in the policy of arbitrary price-fixing. Can there be any use in explaining, if it is needful to explain, that fixing a price below the free-market level will create a shortage and one above it a surplus? But the public oh’s and ah’s and yips and yaps at the shortage of residential housing and surpluses of eggs and potatoes as if these things presented problems any more than getting one’s footgear soiled by deliberately walking in the mud. And let me observe that rent freezing, for example, occurs not at all merely because tenants have more votes than landlords. It reflects a state of mind, a mode of reasoning, even more discouraging than blindness through self-interest.
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URLs in this post:
 Frank Knight: http://www.econlib.org/library/Enc/bios/Knight.html
 On the History and Method of Economics: http://www.amazon.com/History-Method-Economics-Frank-Knight/dp/B002B9OBQW/ref=sr_1_2?s=books&ie=UTF8&qid=1329055072&sr=1-2
 The Role of Principles in Economics and Politics: http://www.jstor.org/discover/10.2307/1815957?uid=3739936&uid=2134&uid=2&uid=70&uid=4&uid=3739256&sid=21103783158887
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