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Quotation of the Day…

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… is from pages 6-7 of Vol. 19 (Ideas, Persons, and Events [2] [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1990 article “Born-Again Economist” (original emphases):

There are subtle but important differences between the allocationist-maximization and the catallactic-coordination paradigm in terms of the implications for normative evaluation of institutions.  In particular the evaluation of the market order may depend critically on which of these partially conflicting paradigms remains dominant in one’s stylized vision.  To the allocationist the market is efficient if it works.  His test of the market becomes the comparison with the abstract ideal defined in his logic.  To the catallactist the market coordinates the separate activities of self-seeking persons without the necessity of detailed political direction.  The test of the market is the comparison with its institutional alternative, politicized decision making.

DBx: Jim’s plea here – as it is throughout much of his writings – is for comparisons to be appropriate.  Comparing ideal, Platonic apples to real-world oranges is pointless, at least if our goal is to choose to eat an apple or an orange.  The appropriate comparison, if we’re trying to decide between eating an apple or eating an orange, is of real-world apples with real-world oranges.

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