… is from pages 7-8 of Robert Higgs’s superb 1971 book, The Transformation of the American Economy: 1865-1914 (footnote deleted):
In relation to the desire for them, economic goods – both commodities and services – are always scarce. Resources being limited, it is impossible to satisfy all wants simultaneously, and people must choose among the alternatives open to them. Should more houses be built? If so, how many, and where? Who will occupy them? By what methods should they be constructed? Millions of such unavoidable choices face every society every day, and the way we make the choices determines the allocation of scarce resources among alternative uses. If, for example, we commit resources to housing construction, then we necessarily forego their use elsewhere, and the most highly valued alternatives foregone constitute the true cost – what economists call the “opportunity cost” – of the housing.
Throughout the post-Civil War era in America free individuals acting within markets made most of these choices. No one planned or directed the organization of economic life in any formal, overall way. Individuals themselves decided what, how much, where, when, and how to produce. Yet even though each person pursued his own designs, the overall result was not chaotic; instead, it was orderly and in many ways predictable.