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Quotation of the Day…

… is from page 601 of volume 2 of The Collected Works of Armen A. Alchian (2006); specifically, it’s from Alchian‘s 1977 essay “Economic Laws and Political Legislation”:

Capitalization of all foreseen future consequences into the present market price for some good, with the change in present value being borne by that private property owner [of that good], is an essence of capitalism.  Capitalization into the present price is the crux of the connotation of the word “capitalist” in the term “capitalist system.”  It is not some presence of capital goods or equipment.  It is not that capitalists (who are simply people who have private property entitlements) control the economic system.  They (we) do, of course, by making bids and offers in the market.  Since we all are capitalists (at least we own our own labor), we all affect the economic system and its outcome.