Tweet [1]
… is from page 32 of Matthew Hennessey’s hot-off-the-press 2022 book, Visible Hand [2]:
If a society can bear to hear the unmistakable sound of what the mid-20th-century Austrian economist Joseph Schumpeter called the “perennial gale of creative destruction,” then it can be pretty sure its markets are working as intended.
DBx: Indeed.
Of course, markets aren’t set into operation by anyone’s design or intent, so strictly speaking there is no intention – no purpose – that markets can be said to fulfill or to disappoint. But because what most people want from markets is the provision of high and rising standards of living for ordinary people, when and insofar as markets make such a provision, markets are operating as we ‘want’ them to operate.
Also of course, many people want markets to do the impossible – namely here, to provide high and rising standards of living for ordinary people without ever causing any ordinary person any disappointment. One of the most difficult tasks confronting those who wish to make a sound economic case, as well as a compelling ethical case, for free markets is to explain that the innovation that is utterly necessary for ordinary people to enjoy high and rising standards of living simply is impossible if government were to attempt to protect everyone, or even just every ordinary worker, from economic disappointment.
…..
Pictured above is Joseph Schumpeter [3].