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Quotation of the Day…

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… is from page 214 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1997 article “The Epistemological Feasibility of Free Markets”: Absent such minimal understanding [of basic economics], the collectivized alternative tends to be chosen over the market because it tends to be more in accord with the “natural” mind-set of the person who remains unsophisticated in economics. This vulgar mind-set has been reinforced rather than offset by the allocation-maximization paradigm that provided the central logic upon which the idealized models of collectivization were constructed.  To the extent that the market is conceptualized as a “device” or a “mechanism,” or even is discussed in terms of its “functions,” it is

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… is from page 214 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1997 article “The Epistemological Feasibility of Free Markets”:

Quotation of the Day…Absent such minimal understanding [of basic economics], the collectivized alternative tends to be chosen over the market because it tends to be more in accord with the “natural” mind-set of the person who remains unsophisticated in economics.

This vulgar mind-set has been reinforced rather than offset by the allocation-maximization paradigm that provided the central logic upon which the idealized models of collectivization were constructed.  To the extent that the market is conceptualized as a “device” or a “mechanism,” or even is discussed in terms of its “functions,” it is necessarily seen to be more complex in its operation than the more directly focus, and centralized, control process of the collectivized alternative.

DBx: The failure to understand the fact that the market is an on-going process of trial-and-error, of error-correction, of discovery, and of incessant change contributes also to the mistaken belief that we – or, at any rate, really smart economists and antitrust officials – can, independently of observed market outcomes, identify ‘sub- or super-optimal’ sizes of firms, ‘non-optimal’ industry structures, ‘wasteful’ product-distribution practices, ‘sub-optimal’ pricing patterns, and ‘anti-competitive’ contractual arrangements.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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