Quotation of the Day…

by Don Boudreaux on November 21, 2017

in Man of System, Myths and Fallacies

… is from page 393 of the late Paul Heyne‘s 1982 speech “What Is the Responsibility of Business Under Democratic Capitalism?” as this speech is reprinted in the 2008 collection of Heyne’s writings, “Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion (Geoffrey Brennan and A.M.C. Waterman, eds.):

The primary problem that modern, industrialized economic systems must solve is the problem posed by the scarcity of information.  We are inclined to overlook these difficulties and to take their resolution for granted, because we take for granted the remarkable mechanism of social coordination through which we gather and disseminate the knowledge that is essential to the system’s functioning.  In overlooking the knowledge or information problem, we focus undue attention on a different scarcity, the scarcity of goodwill.  We erroneously suppose that goodwill can resolve problems that can in fact be resolved only through the accumulation of additional information.  Moreover, many of our proposals for increasing the amount of goodwill in the economy fail completely to attain their objectives, but do manage to subvert the crucial information system.

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