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… is from Ludwig von Mises [2]’s April 1960 Freeman essay titled “The Economic Foundations of Freedom [3]“:
The economic foundation of this bourgeois system is the market economy in which the consumer is sovereign. The consumer, i.e., everybody, determines by his buying or abstention from buying what should be produced, in what quantity and of what quality. The businessmen are forced by the instrumentality of profit and loss to obey the orders of the consumers. Only those enterprises can flourish that supply in the best possible and cheapest way those commodities and services which the buyers are most anxious to acquire. Those who fail to satisfy the public suffer losses and are finally forced to go out of business.
DBx: Advocates of industrial policy would replace everybody with themselves. Such hubris.
Advocates of industrial policy operate with two mistaken suppositions, the first one arrogant and the second one naive. First, they arrogantly suppose that they possess superhuman knowledge about just what the pattern of resource allocation should be. Second, they naively suppose that government can be trusted with the power to coercively engineer their preferred reallocation of resources.