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Bonus Quotation of the Day…

Tweet [1]

is from GMU Econ alum Ed Lopez’s new blog post celebrating the work of the great Armen Alchian [2]:

Alchian merges with F. A. Hayek’s famous critique [3] of Samuelsonian mathematical modeling: the economic problem is to grapple with scarce resources in an evolving world of competing ends with only imperfect, limited and dispersed knowledge. Alchian and Hayek are later joined by James M. Buchanan, whose similar critique [4] of maximizing & equilibrating economic thinking leads him to a similar evolutionary alternative. Channeling Mises, Buchanan argues that economists should model competition as a catallactic or symbiotic process through which people who might otherwise be in conflict instead come to trade or otherwise cooperate with each other to their mutual gain. “This mutuality of advantage that may be secured by different organisms as a result of cooperative arrangements, be these simple or complex, is the one important truth in our discipline,” Buchanan said (I elaborate here [5]). These are fruitful yet relatively neglected alternatives to the mainstream approach.

(I thank Steve Pejovich for sending along, on this 102nd anniversary of Alchian’s birth, Ed’s blog post.)