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Quotation of the Day…

is from page 121 of GMU Econ alum Howard Baetjer’s splendid 2017 book, Economics and Free Markets: An Introduction (link added):

In a world of endless possibilities but limited resources with which to try out these possibilities; in a world where many people have business ideas, but it’s not clear which of those ideas are good ones; in a world where no single person even knows how to make a pencil, much less predict what new products, processes, and technologies will best serve people’s needs a year or five years from now – in such a world, we need some means of sorting out the good ideas from the bad, for discovering which products and processes actually do serve us better than others.

We need free markets because they give us such a means of discovery: profit and loss.

DBx: Proponents of industrial policy arrogantly suppose that they, or government officials, can and will divine the correct answers to these questions if only given the power to obstruct ordinary people’s consumption and investment decisions. Details of this supposed process of divination are, of course, never revealed. We are simply to believe that industrial-policy mandarins can work miracles.

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