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Bonus Quotation of the Day…

… is from Nobel-laureate economist James Buchanan’s November 8th, 1971, letter to Mancur Olson, as this letter appears on pages 19-21 of David Levy’s and Sandra Peart’s excellent 2020 volume from Cambridge University Press, Towards an Economics of Natural Equals: A Documentary History of the Early Virginia School:

Those who do not understand the market at all tend to assume that all of its results are “laid on” by those in power. The emergence of nonplanned results is incomprehensible to many persons, and this includes many of the more vocal radicals.

DBx: Yes.

Much of the hostility to free markets is rooted simply in the mistaken belief that arrangements must be designed if they are to be as useful as possible to human beings. If it were true that, say, the masses cannot prosper unless someone or some group consciously aims to bring prosperity to the masses, then anyone who expresses opposition to such a conscious effort would be either dangerously ignorant or evil. And if, further, the connection between conscious design and beneficial outcomes were so obvious to all adults as to be undeniable, then anyone who expresses opposition to conscious efforts to bring about beneficial results would be appropriately regarded as indisputably evil.

Therefore, when an economist or business person, say, rejects so-called “stakeholder capitalism” and insists that the only proper goal of a corporation is to maximize the profits of shareholders, people for whom “the emergence of nonplanned results is incomprehensible” will be convinced that that economist or business person is an ill-intentioned enemy of society. There is, for such people, no other plausible explanation for opposition to “stakeholder capitalism.” Likewise, when those of us who oppose industrial policy express our opposition, we are heard by many people as opposing a vibrant economy that provides maximum opportunity and prosperity for the masses.

Hostility to liberalism, and opposition to the individualism that liberalism requires, are rooted sometimes in differences in fundamental values, but mostly in a plethora of intellectual errors. No single error, I believe, is as responsible for fueling hostility to liberalism as is the error of believing that all social orders – or, at least, all useful and sustainable social orders – must be consciously designed and maintained.