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Quotation of the Day…

… is from pages 18-19 of the 1948 printing of the second edition (1935) of Lionel Robbins’s classic 1932 tract, An Essay on the Nature & Significance of Economic Science (original emphasis; footnote deleted):

Now, as Professor Mises has emphasised, given central ownership and control of the means of production, the registering of individual pulls and and resistances by a mechanism of prices and costs is excluded by definition. It follows therefore that the decisions of the executive must necessarily be “arbitrary.” That is to say, they must be based on its valuations – not on the valuations of consumers and producers. This at once simplifies the form of choice. Without the guidance of a price system, the organisation of production must depend on the valuations of the final organiser.

DBx: Yes.

The important insight here is relevant not only for full-on socialism; it applies to all efforts to allocate resources by overriding the price system.

To the extent that government allocates resources by conscious direction or by suppressing the price system with the likes of tariffs and subsidies, the wishes of countless consumers and producers are disregarded. In their place is put a nest of fancies of government officials. These officials, or their advisors, presumptuously believe themselves to be blessed with not only the ability to trace out the myriad detailed consequences of their interventions but also with the miraculous ability to determine for thousands or millions of individuals, better than these individuals themselves, what is in these individuals’ best interests.

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