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6.15.2004
The Morality of Markets
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TechCentralStation today has an interesting piece by Ramesh Ponnuru on "The Market's Neglected Virtues."
One paragraph echoes my concerns about the economists' misplaced fascination with marginal cost pricing:
"I also prefer the Austrian school of economics -- which includes thinkers such as von Mises, Hayek, and Rothbard -- not least because it does not overemphasize the textbook model of perfect competition, especially by using that model as a stick with which to beat real-world industries."
More importantly, Ponnuru goes on to make the over-arching MORAL point that markets are the mechanism by which human communities cooperate:
"For the Austrians, the essence of economic life is not competition but co-ordination. The metaphor of the invisible hand is a way of explaining how the problem of social co-ordination can be solved without central direction. People with diverse resources and plans can cooperate in ways that leave them all better off. Hence Michael Novak's description of capitalism -- his term, not mine -- as 'a creative form of community.' "
Those who want to destroy markets, and the property rights on which markets depend, are necessarily advocating that economic coordination be achieved through command-and-control.
posted by James DeLong : 6/15/2004 08:28:08 AM
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