Bonus Quotation of the Day…

by Don Boudreaux on May 28, 2016

in Property Rights

… is from page 90 of GMU Econ alum – and Towson University economist – Howie Baetjer’s excellent 2013 book, Free Our Markets (emphasis added):

People interacting by governmental authority thus face incentives very different from those interacting in voluntary association.  Where property must be respected and people are free to exchange with one another or not as they wish, the incentive to serve one’s fellow man is much stronger than were government compulsion is in play.  Accordingly, voluntary associations generally perform better in achieving human well-being.

In the above quotation I italicize Howie’s “or not” to emphasize a vital, but easily ignored, feature of private-property markets: individual veto power.  Unlike in majoritarian-democratic and nearly all other collective-decision-making settings, in private-property markets no one is forced to do what he or she chooses not to do.  Therefore, an individual’s ability to say “no” to a potential seller or to a potential buyer – including to a potential employer – means that each person has the ability to avoid being made worse off by being forced to use his or her property or person in ways that he or she believes are not the most attractive ways available.

This veto power doesn’t guarantee that each person who has it enjoys a set of options that contains at least one genuinely good option.  But this veto power does ensure that each individual has the opportunity to choose that option, among all of those that he or she has, that he or she personally judges to be the best.

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