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Quotation of the Day…

… is from page 115 of Liberty Fund’s indispensable 1993 collection of some of the writings of H.B. Acton (1908-1974), The Morals of Markets and Related Essays (David Gordon & Jeremy Shearmur, eds.) (original emphasis):

The type of health service, however, which egalitarians support, is one to which everyone belongs and from which everyone can claim medical attention, without fee, for slight as well as for serious illnesses.  Everyone, then, is to receive in accordance with his whim or in accordance with his dire need.  Since the resources for supplying medical services are limited, it can be said that in general there is competition for these services between all those entitled to them, so that the mildly ill compete with the desperately ill.  This is to some extend concealed because not everyone competes for the services of the brain surgeon or the ‘heart-machine’.  But the services of nurses and and non-specialist doctors are, so to say, diluted between those who are seriously ill and those who are hardly ill at all.  The patient with a cold takes up time and expense that might have been employed in giving a more thorough diagnosis to someone else.  Furthermore, in a comprehensive scheme of this sort, the selfish, the demanding and the well-connected can gain attention at the expense of others.

The late, great economist Armen Alchian was especially profound at explaining that competition for goods, services, and resources is inevitable if those goods, services, and resources are scarce.  And nearly all goods, services, and resources in this vale of inescapable reality in which we humans dwell are scarce.  (Useful things that are not scarce – such as breathable air on the earth’s surface – are, sadly, the exception.  Blame Adam and Eve if you like.)

The challenge, then, becomes one of choosing (or of stumbling upon, or of not throttling) institutions that channel humans’ competition for these scarce goods, services, and resources into channels that as best as humanly possible ensure that these scarce things (1) satisfy as many human desires as possible, (2) satisfy the most pressing human desires (“needs”) first before being used to satisfy less-pressing desires, and (3) are ‘allocated’ peacefully, with as little conflict and with as few disappointed expectations as possible.

Good institutions – in my view, ones that prominently feature free markets grounded in private-property rights and freedom of contract – will result over time (among other happy outcomes) in more and more useful goods and services being produced from any given amount of inputs, as well as result in the discovery and creation of more and more inputs.

This system, however, will never be perfect.  It – like any other – will always in reality fail to operate at peak efficiency.  It – like any other – will always, even if it did operate at peak efficiency, produce some outcomes that offend humans’ natural sense of justice and fairness.  But it – unlike any other – is the only ‘system’ for ensuring that we humans, while remaining as free from arbitrary control as possible, can scratch as much useful output as possible from a natural world that strikes me as being utterly indifferent to human well-being.