… is from page 235 of Nathan Rosenberg’s and L.E. Birdzell, Jr.’s 1986 book, How the West Grew Rich (original emphases):
Historically, one of the most distinctive features of capitalist economies has been the practice of decentralizing authority over investments to substantial numbers of individuals who stand to make large personal gains if their decisions are right, who stand to lose heavily if their decisions are wrong, and who lack the economic or political power to prevent at least some others from proving them wrong. Indeed, this particular cluster of features is among the stronger candidates for the definition of capitalism. Its importance in Western growth turns on the point that the choice of capital investments includes the selection of the proposals for innovation that are to be funded. The diffusion of authority to select programs for capital expenditure and the diffusion of authority to select projects for innovation thus cover much the same ground.
DBx: Intellectuals should know history and how to draw germane lessons from it. Unfortunately, many don’t – a sad reality revealed by the enthusiasm expressed these days, by conservatives and Progressives alike, for industrial policy.