… is from page 5, of the original edition, of my late colleague James Buchanan’s brilliant 1973 paper “Introduction: L.S.E. cost theory in retrospect,” which serves as the Introduction to the 1973 collection, edited by Buchanan and G.F. Thirlby, L.S.E. Essays on Cost:
The theory of social interaction, of the mutual adjustment among the plans of separate human beings, is different in kind from the theory of planning, the maximization of some objective function by a conceptualized omniscient being.
DBx: Human beings are not chess pieces to be moved about by a master, and human society neither presents a ‘problem’ that has a unique ‘solution’ nor is a mechanism that can be engineered.
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The main threat to freedom today comes not from tyranny but from equality – equality defined as identity of reward. Related to it is the quest for security.
[M]ost of the laws that have been made relating to trade, since the Act of Navigation, may be presumed were calculated rather for particular interests than public good; more to advance some tradesmen than the trade of the nation.
In markets, producers make offers to consumers – offers that consumers are free to accept or to reject. If offerings made by a producer are liked by consumers well enough to prompt them to pay prices high enough for what that producer is offering, that producer profits and prospers for as long as the offerings it makes to consumers are judged by consumers to be worthwhile. In contrast, if offerings made by a producer are not liked well enough by consumers – if, we might say, consumers choose not to ‘take a swing’ at accepting that producer’s offerings – that producer must improve its offerings.
The simple system of natural liberty, to use Adam Smith’s own designation, or as we would say, the market organization of economic activity, serves two functions simultaneously. Resources are directed by private owners into the most productive activities, as determined by the demands of final consumers, who get, in turn, the largest bundle of goods, again as measured by individuals’ own evaluations. At the same time, however, over and beyond this economic or efficiency-enhancing function, the market reduces or eliminates the need for collective or political choices to be made concerning composition, organization, extent, and distribution of valued product.
I don’t intend to go into an argument to convince any man here that protection to all must be protection to none. It takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket, and if that goes on in a circle through the whole community, it is only a clumsy process of robbing all to enrich none, and simply has this effect, that it ties up the hands of industry in all directions.
