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Quotation of the Day…

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… is from page 125 of Vol. II (“The Mirage of Social Justice” [1976]) of F.A. Hayek’s great work, Law, Legislation, and Liberty (footnote deleted): The whole [market] system rests on providing inducements for all to use their skill to find out particular circumstances in order to anticipate impending changes as accurately as possible. This incentive would be removed if each decision did not carry the risk of loss, or if an authority had to decide whether a particular error in anticipation was excusable or not. DBx: Prosperity for the masses is impossible absent a system in which profits are not only allowed but admired. But a system of profits is unworkable unless it is also a system of profit and loss. And there can be no genuine losses – and, hence, no genuine profits – if the state

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… is from page 125 of Vol. II (“The Mirage of Social Justice” [1976]) of F.A. Hayek’s great work, Law, Legislation, and Liberty (footnote deleted):

Quotation of the Day…The whole [market] system rests on providing inducements for all to use their skill to find out particular circumstances in order to anticipate impending changes as accurately as possible. This incentive would be removed if each decision did not carry the risk of loss, or if an authority had to decide whether a particular error in anticipation was excusable or not.

DBx: Prosperity for the masses is impossible absent a system in which profits are not only allowed but admired. But a system of profits is unworkable unless it is also a system of profit and loss. And there can be no genuine losses – and, hence, no genuine profits – if the state insures decision-makers against losses caused by changes in market conditions.

Today – May 8, 2019 – is the 120th anniversary of the birth of F.A. Hayek.

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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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