Quotation of the Day…

by Don Boudreaux on April 29, 2022

in Economics

… is from page 297 of my colleague Peter J. Boettke’s 2021 paper “Liberalism, Socialism, and Our Future,” as this essay appears in Pete’s 2021 book, The Struggle for a Better World:

The main lesson of economics is the mutual gains from trade and the peaceful social cooperation under the division of labor that a modern commercial society engenders.

DBx: Yes. Or rather, this lesson should be the main one taught by economics. Unfortunately, outside of George Mason University and a handful of other schools, far too many economists today do not really understand the process by which prosperity is created by peaceful social cooperation and the division of labor. For many economists, prosperity simply happens; its creation is treated as being close to automatic. (For an extreme but popular example, see economist Thomas Piketty’s economics-free 2014 book, Capital in the Twenty-First Century.) Too many economists today, when not solving pointless puzzles, gather and gaze at highly processed data with unknowing eyes – eyes so unknowing that they don’t know that they don’t know.

This data processing and gazing, unguided by any real understanding of market processes, then typically prompts these economists to fancy themselves to be social engineers. Tweak this, re-engineer that, alter this other thing over here and attach a new device over there – schemes abound for crafting a more-perfect economic machine. Yet all of this scheming is done in ignorance of the nature of the inconceivably complex processes that are mistaken to be a machine simple enough to be mastered by the human mind.

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