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Quotation of the Day…

… is from page 473 of my late Nobel-laureate colleague Jim Buchanan’s 1994 paper “Economic Theory in the Postrevolutionary Moment of the 1990s,” as this paper is reprinted in Economic Inquiry and Its Logic (2000), which is volume 12 of the Collected Works of James M. Buchanan:

My purpose here is not to bore you with a summary of first-week elementary economics. But I should insist that those of us who are professionals in the discipline often neglect these elementary principles at our peril, and especially when we recognize that only a very small minority of nonprofessionals possesses even a generalized understanding of how the economic order works.

DBx: The principal job – certainly the first job – of the economist is to explain to the general public how economic order arises spontaneously, guided largely by market-determined prices. This job, I believe, is a high calling. Without a correct understanding of the emergence and maintenance of economic order, the typical person supposes that the economy is created and run consciously, and the only question then being whether the conscious directors of the economy are to be private parties or government leaders (with the former always acting only to promote their own narrow interests, while the latter at least have the potential to act to promote the public interest).

Along with this false supposition comes a large number of fatal conceits, such as that prices, wages, and other contractual terms can be changed at will without causing any change other than in the distribution of wealth, and that trade patterns – domestic and foreign – can be altered through state coercion in ways that reliably improve the well-being of people in the home country.

Those people who hold such a view and who also sincerely wish to promote the general good are naturally led to look with suspicion upon anyone who advocates that government be kept small and its powers strictly limited. To such people – we might call them  “economic designerists” – calls to limit the scope and reach of government are calls to limit the scope and reach of the only available source of order and improvement. And why, asks economic designerists, would anyone wish to stifle the operations of the only available source of order and improvement? The obvious answer is that those who issue such calls to keep government limited are deeply ignorant, terribly narrow-minded and greedy, or mercenary operatives of the super-rich (or some combination of these three anti-social maladies).

The normative differences that separate economically informed advocates of free markets from modern-day progressives and conservative nationalists are rooted in very different positive understandings of the source and nature of economic order. For a well-meaning person to understand spontaneous, or emergent, order is for that person to understand that attempts to consciously alter that order inevitably bring in their wake unanticipated ill-consequences that very likely outweigh whatever good might emerge from the altering. And so such a person warns against most government interventions. In contrast as stark as contrasts get, a well-meaning person who does not understand spontaneous, or emergent, order is almost inevitably impelled to warn of the opposite – namely, of the injustice, chaos, and calamity that seem to such a person to be inevitable absent the detailed attention and direction of a caring state.