… is from GMU Econ alum Steven Horwitz’s March 31st, 2011, Freeman essay, “Getting it Right or Knowing You Got it Wrong? The Austrian Edge” (original emphasis):
For Austrians, the fundamental issue is not whether markets get it right. True, Austrians think markets are pretty good and governments quite bad in that respect. And even though Austrians might explain things differently from the mainstream, there are plenty of mainstream economists who would agree with those general conclusions. Note, though, that the question here is still about getting it right.
Where the Austrian view differs, I would argue, is in understanding that markets are also really good at helping people to know when resources are not optimally allocated and providing the signals and incentives needed to correct the mistakes. Being adept at getting things right at a given point is of course a good thing. But it is probably more valuable – given that we aren’t likely to get things perfectly right on a regular basis – to be able both to know when we are wrong and to have an incentive to do better.
DBx: Steve died, at far too young an age, one year ago today.