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Quotation of the Day…

… is from page 119 of my late Nobel-laureate colleague Jim Buchanan’s paper in the October 1987 issue of Ethics, “The Economizing Element in Knight’s Ethical Critique of Capitalist Order,” as this paper is reprinted in Economic Inquiry and Its Logic (2000), which is volume 12 of the Collected Works of James M. Buchanan:

I think we should recognize fantasy, whether in art or morals, and beware of using it as the basis of criticizing that which is or can be.

DBx: It’s human to dream, to envision, to experiment. And in a free society mass prosperity is created chiefly by a species of such dreaming, namely, entrepreneurial creativity – creativity free of the requirement that it get permission from the state or from some collective. This entrepreneurial creativity is disciplined by each person’s right to say ‘no’ and guided by market prices, profits, and losses.

The discipline and guidance supplied by private markets – markets embedded within the law of property, contract, and tort – helps to ensure that the ‘fantasies’ of entrepreneurs bear a significant attachment to reality, for the market will quickly halt the pursuit of wildly improbable ventures. But matters with government differ categorically. Government officials spend other people’s money and order other people about. The right to say ‘no’ is severely attenuated when the offers commands come from the state. Government officials – having no personal claim on whatever residual monetary revenues their schemes might leave after paying all costs – are neither incited in their imposition of these schemes by the lure of personal monetary profit nor disciplined by the fear of personal monetary loss. And these officials’ decisions, being intended to override market signals, are of course not guided by market prices.

Dreams and fantasies pursued through government inevitably make life more hellish (except for those individuals currently issuing the commands).

Dream, by all means dream! But please pursue your dreams only on your dime and without the authority to order any of your fellow human beings hither and yon.

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