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Quotation of the Day…

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… is from page 241 of William Easterly’s excellent 2013 book, The Tyranny of Experts [2] (original emphases):

Another way to state the knowledge problem is that success is often a surprise.  It is often hard to predict what will be the solution.  It is even harder to predict who will have the solution, and when and where.  And it is even harder when the success of who, what, when, and where keeps changing.  This is just restating Hayek’s insight about the knowledge problem with conscious design….

All this means that solving the knowledge problem is hard work.  A lot of work requires a lot of rewards, so a successful problem-solving system must hand out such rewards to the problem-solvers.

DBx: When those who don’t understand economics see large profits being earned by someone through market exchange, they childishly assume that those profits are taken unjustly from other people, thus making those other people worse off.  When those who do understand economics see large profits being earned by someone through market exchange, they cheer because they know that those large profits both are evidence that the profit-earner is successfully helping other people to ‘solve’ some of their problems and that those very same profits will attract yet others individuals to contribute their creativity and toil to the same problem-solving effort.  (See again this fine essay by Bob Murphy [3].)

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