During an informal water-cooler chat a few moments ago, GMU Econ PhD student Rosolino Candela – who knows a bit of Latin – told me that the original meaning of “imperfect” is more akin to “incomplete” rather than, as we understand it today, “not ideal.” Here’s the entry for the adjective “perfect ” from this on-line dictionary of etymology :
early 15c. alteration of Middle English parfit (c. 1300), from Old French parfit “finished, completed, ready” (11c.), from Latin perfectus “completed, excellent, accomplished, exquisite,” past participle of perficere “accomplish, finish, complete,” from per- “completely” (see per) + facere “to make, do, perform” (see factitious).
Notice in this meaning of “perfect” the element of process. For something to be “finished” or “completed” implies that that something was once unfinished or incomplete and that some process brought that something to a finish or to completeness. Good economists understand that all social institutions, including markets, facilitate the finishing, or the competing, of individuals’ plans. Good economists understand also that this finishing or completing means to bring countless incompatible plans into closer compatibility with each other so that as many as possible such plans will meet with success.
Good economists judge markets and other social institutions (including government) by how well they facilitate this process of making plans compatible. The market is indeed a process, and it should no more be criticized because it is still in the process of finishing or competing its ‘task’ of making plans compatible than a sculptor who is still chiseling away on a block of marble should be criticized because he’s still in the process of finishing or completing his masterwork.
Yet one important difference does distinguish the market from the sculptor. Because – as good economists also understand – people’s preferences change as do the ‘external’ constraints and opportunities that people confront, there is no actual finished or completed state of the market that is comparable to the actual finished or completed state of the sculptor’s masterwork. The constancy of change in society and the economy means that no social institution, including the market, will ever actually finish or complete this plan coordination. It’s always an on-going process. But it is the process that must be evaluated – as a process – against alternative processes for its effectiveness at satisfying human desires. That the market process is at any moment in time still unfinished – that is, “imperfect” – is irrelevant.