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Quotation of the Day…

… is from page 105 of the late Steve Pejovich’s 1983 paper “Codetermination in the West: The Case of Germany,” which is chapter 8 of the superb 1983 collection, edited by Pejovich, Philosophical and Economic Foundations of Capitalism:

While the market does not make people moral (or immoral), it raises the cost of unethical behavior. Thus, the capitalist system has a strong moral content.

DBx: Indeed so.

The simple power to say “no” – a power possessed by poor and rich alike – obliges individuals who wish to gain from trading to offer to make those with whom they wish to trade better off. Sophomores and pedants delight in identifying cases in which this truth seems to fail to hold. “Merchants can mislead customers!” “Poor people are compelled by circumstances to accept bargains that richer people reject!” “Individuals are sometimes poor judges of their own best interest!” “Individuals’ preferences are shaped by social pressures and, therefore, aren’t genuine!”

Good answers to each such claim exist. Yet even without such answers, the reality remains that the power to say “no” is a tremendous bulwark against exploitation, as well as a super-fuel for economic growth in a society that dignifies commercial pursuits and market-tested innovation.

Protectionists, industrial-policyists, and other interventionists all wish, in one way or another, to dilute individuals’ power to say “no” (and, in the case of subsidies, to override that power completely).

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