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Quotation of the Day…

… is from page 234 of the late William Niskanen’s 2002 essay “The Intellectual Case for a Free Market Economy,” which is reprinted as chapter 22 in the valuable 2008 collection of some of the best of Niskanen’s writings, Reflections of a Political Economist (footnote omitted):

The primary moral case for a free market economy is that most economic decisions require the consent of all those with the affected rights.  No one has the authority to dictate an outcome at the expense of another party, unless both parties have previously agreed to a contractual relation that grants this authority in specific cases.  Freedom is an implicit moral value, because the concepts of good and evil have no moral meaning in the absence of choice.  A free market economy, in summary, maximizes the conditions in which we are “free to choose.”

The second moral case for a free market economy is that it is more consistent with our inherent moral nature, probably a consequence of our genetic heritage.  Most of us have a limited amount of caring, often specific to family and friends.  Many of us are tempted to use threat to get our way unless the economic system sufficiently penalizes threat to make make exchange a more rewarding relation.  A free market economy minimizes the necessary use of threat and reduces our dependence on caring in routine economic relations.