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Bonus Quotation of the Day…

… is from pages 89-90 of the 1992 Transaction Publishers edition of Wilhelm Röpke’s 1946 book, The Social Crisis of Our Time:

The non-socialist market economy is a process which is made up of innumerable voluntary economic actions of individuals. The market regulates these actions and gives all participants directives for the adjustment of production to the wants of the consumers. Obedience to these directives of the market is rewarded, disobedience is punished in the most extreme case with bankruptcy (that is, compulsory withdrawal from the ranks of the entrepreneurs responsible for the production process) and by destruction of the economic basis of existence. Now socialism means (if it is to mean anything at all), that the democratic ruler “Market” is replaced by the autocratic ruler “State,” a further example of how socialism “politicizes” the economy. It is in keeping with this politicization that the new ruler of the economy, the state, enforces respect by means which are in accordance with its political nature: orders sanctioned by criminal law.

DBx: The displacement of voluntary actions guided by market signals – signals which condense and convey the knowledge and preferences of millions of people – with diktats issued by government officials empowered to coerce any and all persons who disobey does not occur only when the economy becomes completely socialized. This displacement commences the moment government takes over any amount of resource allocation. Of course, when government does only very little resource-allocation-by-diktat, the results inflict no noticeable harm on the economy as a whole. But the greater is the displacement of market signals by government diktat, the more distorted becomes the economy – and the more tyrannical the state.

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