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Quotation of the Day…

… is from page 231 of my late Nobel laureate colleague Jim Buchanan‘s 1993 monograph, Property as a Guarantor of Liberty, as it is reprinted in James M. Buchanan, Federalism, Liberty, and Law (2001), which is volume 18 of the Collected Works of James M. Buchanan:

It is important to recognize, however, that the development of market networks (including futures markets) along with the accompanying legal-institutional structure, and also associated with the development of an understanding of this structure, allow the individual participant to secure, in the limiting case, the full advantage of specialization while at the same time enjoying the equivalent of costless exit options.  This near magical result is, of course, generated by the existence and operation of a fully competitive economy, that is definitionally described by viable entry and exit into all value-producing activities, in a market nexus of sufficient size to ensure that there can be many economic units on both the buying and selling side of any market.

DBx: The above quotation is not a sample of Jim Buchanan at his rhetorical best.  While Jim often wrote in ways accessible to non-academics, most of his prose is like the above.  The reason is that nearly everything he wrote was aimed at his fellow academics (and most of that was aimed even more narrowly – namely, at his fellow professional economists).  Nevertheless, the point made by Buchanan in the above quotation is important, and it’s one that helps explain why Buchanan and almost all libertarians oppose state dictates of whom individuals not acting as agents of the government must associate with, and may not associate with.

Libertarian opposition to such dictates – dictates such as prohibiting florists from rejecting the business of gay couples – stems from at least three related roots.  First is the strong presumption that any peaceful activity ought to be allowed; freedom is valuable as an end in itself.  (This presumption is rebuttable.  For example, I do not object to a prohibition in modern America on people having sex, no matter how consensual between the lovers, on public sidewalks.)  Second is the distrust of people with power to coerce others.  Third is the point mentioned above by Buchanan: freedom of entry and of exit in private-property markets practically ensures that a sufficient number of property owners, hungry for profit, will use their properties in ways that afford a large number of options to individuals both in their capacities as consumers and as workers (and as suppliers of other inputs).  And this latter assurance need not be “perfect” in order to be real and sufficient.