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Quotation of the Day…

… is from page 49 of UCLA economist William Allen’s splendid 1989 collection of the transcripts of his radio addresses, The Midnight Economist; specifically, it’s from Allen’s August 1985 radio address entitled “Ideology, Economics, and Survival” (original emphases):

imagesA free society, by its nature, is bound together and operates through devices and channels of individual aspirations and anticipations.  It relies not on authoritarian decrees enforced with the thumb screw, but on induced coordination of largely autonomous people who, in pursuing their personal ends, contribute to the well-being of the community.

DBx: This vital truth – despite being featured prominently in the works of great scholars such as Adam Smith, F.A. Hayek, Ronald Coase, Milton Friedman, Armen Alchian, and Jim Buchanan – is largely unknown or rejected.

One error made by those who reject this truth is to misunderstand what is meant by what Allen calls “individual aspirations and anticipations.”  This phrase does not refer only, or even chiefly, to aspirations that each individual comes to possess on his or her own, uninfluenced by his or her environment and by other individuals.  Every sensible student of human beings or of society understands that the tastes, preferences, beliefs, values, hopes, and expectations that each person has are greatly influenced by that person’s life experiences and by the ideas that he or she encounters throughout life.  We are social creatures.  Yet the fact remains that every aspiration and anticipation that is held is held by an individual (or, usually, by each of many individuals).  They are not held by society as such – or by the state, or by the market, or by the community, or by the collective, or by “business,” or by “labor,” or by this or that generation, or by this or that class, or by any thing or process other than individuals.

Similarly, to describe people as “autonomous” (as Allen does) is not to deny that each of us is immensely influenced by the actions, ideas, and desires of others.  What Allen here means is that, ultimately, each and every action is taken by an individual and that that acting individual – however influenced he or she might be by other people and by his or her environment – ultimately has the choice to act or not in whatever particular manner is open to him or her.  Human beings are not robots under the direction of some mastermind.

Finally, the “induced coordination” that Allen celebrates here – the induced coordination that occurs in a free society – is largely, although not exclusively, achieved through the private-property-based market process that generates prices that each of us use, many times daily, to guide our actions toward countless strangers.


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