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Quotation of the Day…

… is from page 36 of Jennifer Burns’s 2023 Milton Friedman: The Last Conservative (footnote deleted; link added):

It was appropriate for the entrepreneur to gamble his own resources, because he ultimately bore the responsibilities. But the reformer who did the same with society’s funds faced no such sanction. “It is not too much to say that the very essence of free enterprise is the concentration of responsibility in its two aspects of making decisions and taking the consequences of decisions when put into effect,” he [Frank Knight] claimed. Socialist planners would have neither the incentive to excel nor basic accountability for their actions, he concluded.

DBx: Just as proponents of allocating resources by diktat rather than by market signals ignore the question “From where will government officials get the information they need?”, these proponents of resource-allocation-by-diktat also ignore the question “What will incite government officials to act in the public interest?” We’re simply supposed to trust that, by some mysterious or miraculous process, the challenges that each of these questions identify will be overcome.

It’s highly ironic that those persons who clamor for replacing, in whole or in part, market processes with political commands very often accuse those of us who recommend sticking with the market as believing that the market works by magic. In fact, of course, support for market processes rests on sound theory and much empirical evidence. Support of overriding the market rests on nothing but blind faith.