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Quotation of the Day…

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… is from page 109 of the original edition of Gerald P. O’Driscoll’s and Mario J. Rizzo’s impressive 1985 book, The Economics of Time & Ignorance [2]:

If competition serves a social purpose, it must produce something that we could not have in its absence.  To the degree that competition does what we could have done equally cheaply in its absence, it is wasteful. Competition in fact leads to the discovery of opportunities that would otherwise go unnoticed.  It thus generates a spontaneous discovery process, the exact course of which is unpredictable.  This process includes, inter alia, both the discovery of hitherto unsatisfied wants and the products to satisfy those wants, and the invention of lower-cost methods of satisfying preferences.  It also encompasses the creation of new economic forms, customs, and structures.

Those who would substitute the judgments of people who do not put their own money where their mouths are – politicians, professors, pundits, preachers, and popes – for the expressed judgments of people who are indeed spending their own money (as both consumers and as investors) would replace this knowledge-uncovering voluntary competitive discovery process with the knowledge-muffling diktats of arrogant ‘experts.’