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… is from page 27 of my colleague Richard Wagner’s superb 2007 book, Fiscal Sociology and the Theory of Public Finance [2]:
Anyone who has walked through a densely populated barn and breathed deeply can get a sense of what life in large cities must have been like before the automobile replaced horses. While the automobile transformed life on a massive scale, destroying many occupations and activities while generating myriad new ones, a market economy continually generates such transformations as a feature of its ordinary mode of operation. The central mode of operation of a market economy is surely creative transformation and not some steady-state equilibrium.
With the above Schumpeterian insight [3] in mind it’s interesting to survey the range of “Progressive” policy proposals – proposals such as trade restrictions, export subsidies to established corporations, occupational-licensing regulations, requirements that new products first be approved by government officials before these products may be offered for sale to consumers – to discover just how many such proposals are meant to retard progress and to ossify the status quo.