Quotation of the Day…

by Don Boudreaux on October 18, 2020

in Competition, Complexity & Emergence, Myths and Fallacies, Philosophy of Freedom

… is from page iv of the 1969 Arlington House edition of Ludwig von Mises’s 1944 Yale University Press book, Omnipotent Government: The Rise of the Total State and Total War (available free-of-charge on-line here) (emphasis added):

The program of economic freedom is not negativistic. It aims positively at the establishment and preservation of the system of market economy based on private ownership of the means of production and free enterprise. It aims at free competition and at the sovereignty of the consumers. As the logical outcome of these demands the true liberals are opposed to all endeavors to substitute government control for the operation of an unhampered market economy. Laissez faire, laissez passer does not mean: let the evils last. On the contrary, it means: do not interfere with the operation of the market because such interference must necessarily restrict output and make people poorer. It means furthermore: do not abolish or cripple the capitalist system which, in spite of all obstacles put in its way by governments and politicians, has raised the standard of living of the masses in an unprecedented way.

DBx: Reasonable people can and do disagree in their assessments of how well people in market settings ‘solve’ problems compared to how well people in political settings ‘solve’ problems. But in both cases it is always and only people – flesh-and-blood, real-world, puny-brained, and imperfect men and women – acting to ‘solve’ problems. To change the institutional setting is not to invest human beings with, or to strip them of, supernatural powers and motivations.

If the previous paragraph sounds trivial, it is – or, rather, it should be. Unfortunately, a great number of proposals to substitute government-designed constraints and rewards for the constraints and rewards that inhere in competitive markets ignore this reality. These proposals are built on the implicit assumption that individuals in political settings somehow gain access to knowledge unavailable in private settings, and somehow become significantly less self-interested than they are when acting in non-political settings. Just how this access to knowledge is achieved, and how this transformation of motivation is accomplished, are never specified. It’s as if miracles occur.

…..

For the record, in the above I wrote ‘solve’ (in quotes) to signal awareness of the fact about which Thomas Sowell reminds us: Most social matters have no solutions; they have trade-offs.

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