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Quotation of the Day…

… is from page 108 of Steve Pejovich’s 1983 essay “Codetermination in the West: The Case of Germany,” which is chapter 8 of the superb 1983 collection, edited by Pejovich, Philosophical and Economic Foundations of Capitalism:

The point is, of course, that parties to a contract can identify opportunities for exchange, determine their own trade-offs (which are not likely to be the same for all firms), and negotiate terms of exchange at a lower cost than a third party could possibly do it for them.  While law applies equally to all firms, voluntary contracts allow the owner and his workers to identify and exploit opportunities that are specific to their firm.

Voluntary contracting – a process that includes each individual’s right to reject offered contract terms – promotes genuinely diverse outcomes that better satisfy the nuances of each person’s situation and preferences.  Government-imposed regulations, such as minimum-wage legislation, reduce this diversity and cause outcomes, on the whole, to be less appealing to all parties involved.