People talk about capitalism and socialism and communism. There’s only two kinds of economic systems: the market-driven and the government-directed. That’s it! The more you move toward a state-directed economy, the less efficient and more corrupt it becomes.
DBx: Progressives and NatCons take note: Government control over the economy doesn’t become destructive only when it reaches the point of full-on socialism. All government efforts to mute or override prices and other market signals are highly likely to make the allocation of resources less productive than it would be otherwise. Minor efforts along these lines create only minor inefficiencies. Yet as these efforts intensify, so too do the inefficiencies.
The detailed, widely dispersed, and often inarticulable knowledge that must be accessed and acted upon if economies are to function well doesn’t begin to be ignored only when governments take full control of the economy.
