Bonus Quotation of the Day…

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… is from pages xi-xii of economic historian Robert Higgs’s pioneering and persuasive 1977 book, Competition and Coercion: Blacks in the American Economy, 1865-1914:

Schumpeterian competition takes place in the world of flesh and blood; Samuelsonian competition makes its home on classroom blackboards. Real competition occurs in a context of imperfectly enforced private property rights, substantial transaction costs, risks of various kinds, and limited information about market opportunities and resource costs – all subject to unexpected change from one day to the next. Real competition takes time, sometimes years, to exert profound effects on broad societal patterns of resource allocation and income distribution. Competitive processes create certain tendencies toward equilibrium, but a condition of system-wide balance is rarely maintained for long. Competitive processes are incessant, the market ever in flux, though not always in equal degree. Discernible patterns emerge for tendencies of the competitive market process, but in no meaningful sense can the dynamic competitive process be described as “perfect” or “optimal.” It is a process of discovery and creation, neither perfect nor imperfect. It is the means by which the market economy propels itself toward an unknown destination through the uncharted seas of unique historical circumstances.

DBx: Beautifully put.

The hubris of many people is exposed by their offering or embrace of schemes to use state power to direct market competition so that it generates specific outcomes. Extraordinary naïveté – and arrogance – is manifest in all calls for the state to ensure that only those particular changes occur that some politician or intellectual approves of in advance.

Most thinking and commentary about economic processes remains in 2023 roughly at the same stage as was thinking and commentary about human physiology and medical care in 1023. Such thinking and commentary consists mostly of confident repetitions of superstitions, perpetuations of myths, expressions of magical notions, obsessions with imaginary monsters, ornery refusals to look beyond immediate sensual and mental impressions, and inability to shed the primitive idea that observed order must be the result of a designing mind.