Spot on

A free system of matching buyers with sellers is the best means we have of establishing clearing prices for goods and assets. It allows companies and investors to make decisions about where to allocate capital. When the authorities start to think they know better – and talk about the "true price valuations" – I worry.

And to find such good sense in The Guardian!

1 thought on “Spot on”

  1. When talking (or writing) about such concepts as “systems,” it’s important (or at least useful) to recognize that “the market” is not something designed or thought out as a “system.” Rather, it’s the natural outgrowth of people engaged in the completely natural process of trying to satisfy their wants in the best possible way–through exchange of their less-desired stuff for that of others. In that sense it is organic. And, it should be noted that no “system” comes close in ability to satisfy what people universally want. It is even entirely safe to say that no “system” embodying departures or modes different from those of the market has the slightest chance of replacing its functional efficacy.

    It would be meaningless to call the market “perfect” but, in keeping with recognition that “nothing is perfect,” the unhampered market comes as close to exhibiting that quality as is possible to any human activity.

    The foregoing being said, it bears noting that the market neither corrupts nor enobles people; market activities provide opportunity for those so inclined to employ force and fraud (more the latter than the former) similarly as in other aspects of living. The fact that regulation may affect want-satisfaction adversely in some situations is not a reason to reduce regulation—it’s merely a reason to consider regulation more thoroughly, especially from the “economic” point of view of comparing the “costs vs benefits” of each.

    But, when at the point of considering proper regulatory institutions and measures, we are faced with the so-far insoluble problem that laws are made politically–and often for political purposes at odds with what market participants are trying to achieve by that very participation–the maximized satisfaction of their wants.

    The function of studying, describing and explaining the various (short and long-term) consequences of specific interferences in the market is the special niche of “economists.” But the plain, bald “facts of life” in the field are that the overwhelming preponderance of those so
    titled are simply specially-trained propagandists for the particular programs of one or another political party or pressure group, strictly seeking to alter conditions in ways that their sponsors believe will benefit their partisans at the expense of some other(s). These “experts” are actually “flacks,” some of whom attempt to influence (or justify) the programs of particular parties or candidates and others of whom, like journalist “hacks,” turn their attention to continuous attempt, through their writing and speaking, to influence public opinion toward the proposals of their “side.” Yet others engage themselves in a general indoctrination of the rising generation of intellectuals and opinion-molders
    .
    Against these all stand a small group of economists who actually believe their duty as such consists in truth and accuracy rather than in partisam combat or apologetics. . Principally, these are the “Austrians,” few of whom are well-known and none at all associated with the “levers of power.” Their principal representative, now deceased half a lifetime, was Ludwig von Mises, whose theories have been irrefutable even beyond his lifetime and whose predictions of future economic events and trends have been uncannily accurate. And though there is now a fairly-attended “misesian” website, he was unable during his lifetime to find paying employment at any major university either here in the US , where he taught as an unpaid “visiting professor” for 25 years or in his native Austria, where he devoted 17 years to the same (unpaid) pursuit

    If one would want to know more about Mises or about dedication, there’s a new biography by Hulsmann. But if one wants to know about Economics, one must read Mises himself (HUMAN ACTION). To my knowledge, not a single president other than Reagan had such interest. Only a single member of Congress–again, to my knowledge– (Ron Paul) has ever
    declared himself an adherent of Mises’ thought.
    (And those who tend to dismiss Paul as a “loon” might think otherwise after reading his speech in Congress on a bill he’d proposed–in 2002–to deal with precisely the distortions in the mortgage-lending market resulting in the current difficulties. By some chance, it appears in a comment by GC (Godless Capitalist) over at Gene expression (gnxp.com); it’s the thread with about 60-65 comments.)

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