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Quotation of the Day…

… is from pages 131-132 of Ludwig Lachmann’s 1974 essay “On the Central Concept of Austrian Economics: Market Process,” which is chapter 8 of the vital 1976 collection, edited by Edwin Dolan, The Foundations of Modern Austrian Economics (original emphasis):

Finally, the divergence of expectations, apart from being an obstacle to equilibrium, has an important positive function in a market economy.  It is an anticipatory device.  The more extended the range of expectations, the greater the likelihood that somebody will catch a glimpse of things to come and be “right.”  Those who take their orientation from the future rather than the present, the “speculators,” permit the future to make its impact on the market process earlier than otherwise.  They contrive to inject a glimpse of future knowledge into the emergent market pattern.  Of course they may make mistakes for which they will pay.  Without divergent expectations and incoherent plans, however, it would not happen at all.