Quotation of the Day…

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… is from page 56 of the 2011 revised and enlarged edition of Thomas Sowell’s 2009 book Intellectuals and Society:

The crucial distinction between market transactions and collective decision-making is that in the market people are rewarded according to the value of their goods and services to those particular individuals who receive those goods and services, and who have every incentive to seek alternative sources, so as to minimize their costs, just as sellers of goods and services have every incentive to seek the highest bids for what they have to offer. But collective decision-making by third parties allows those third parties to superimpose their preferences on others at no cost to themselves, and to become the arbiters of other people’s economic fate without accountability for the consequences.

DBx: Why is this important point typically ignored by people, left and right, who call for the replacement of decision-making done decentrally – decision-making done by individuals each with his or her own skin in the game – with decision-making done by government officials? Why, for example, do proponents of industrial policy seem seldom, if ever, to recognize the problem here described by Sowell?