It is not a correct deduction from the Principles of Economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately.John Maynard Keynes (1926). The End of Laissez-Faire, in Essays in Persuasion (2009), p 169.
When you cast policy issues in moral terms, you degrade the character of public discourse. You lead people to see conflicting priorities as an occasion for battle, rather than an occasion for compromise. You send the message that policy is best decided by appeals to one’s inner conscience (or, more likely, to the polemics of demagogues), rather than by appeals to impersonal cost-benefit analysis.Steven E. Landsburg (2013). Don’t cast recycling as a moral issue
… If we’re determined to instill blind moral instincts that make people behave better most of the time, I’d like to nominate a blind moral instinct to respect price signals and the individual choices that underlie them—an instinct, for example, to recoil from judging and undercutting other people’s voluntary arrangements.
(T)he use of incentives can signal our fellow citizens’ lack of enthusiasm for the public good, and so damage the norms of civil behavior and be counterproductive. To the extent that we all want to retain the illusion that the society in which we live is virtuous, this also sheds light on the widespread resistance to what economists have to say, because economists are often the bearers of bad empirical news concerning how virtuous people are.Jean Tirole (2017). Economics for the Common Good, p 149
Under capitalism, man exploits man. Under communism, it is just the opposite.John Kenneth Galbraith
While those who are superstitious may avoid walking under ladders, the scientific mind who wants to defy the superstition may choose to look for ladders and delight in passing under them. But if you keep looking for and walking under the ladders long enough, something is going to happen to you.James Thurber (1937). Quoted in Amartya Sen, The Idea of Justice (2009), p xviii
Dans la sphère économique, un acte, une habitude, une institution, une loi n’engendrent pas seulement un effet, mais une série d’effets. De ces effets, le premier seul est immédiat ; il se manifeste simultanément avec sa cause, on le voit. Les autres ne se déroulent que successivement, on ne les voit pas; heureux si on les prévoit.Frédéric Bastiat (1850). Ce qu’on voit et Ce qu’on ne voit pas, Introduction
Entre un mauvais et un bon Économiste, voici toute la différence : l’un s’en tient à l’effet visible ; l’autre tient compte et de l’effet qu’on voit et de ceux qu’il faut prévoir.
Mais cette différence est énorme, car il arrive presque toujours que, lorsque la conséquence immédiate est favorable, les conséquences ultérieures sont funestes, et vice versa. — D’où il suit que le mauvais Économiste poursuit un petit bien actuel qui sera suivi d’un grand mal à venir, tandis que le vrai économiste poursuit un grand bien à venir, au risque d’une petit mal actuel.
(The) capitalist process produced that atmosphere of almost universal hostility to its own social order. … (The capitalist order) is unwilling and unable to control its intellectual sector effectively. … Freedom of public discussion involving freedom to nibble at the foundations of capitalist society is inevitable in the long run. The intellectual group cannot help nibbling, because it lives on criticism and its whole position depends on criticism that stings; and criticism of persons and of current events will … fatally issue in criticism of classes and institutions.Joseph Schumpeter (1943). Capitalism, Socialism and Democracy, ch 13 II. The Sociology of the Intellectual
All systems, either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which, no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interests of the society.Adam Smith (1776). The Wealth of Nations, book IV, chapter IX
The two fundamental problems of organization are the assignment of tasks and the apportionment of rewards. In unorganized action each person performs all the tasks by whose performance he benefits, and his reward is the immediate, physical benefit of his own work. But when men work together some machinery must be provided to give each his special work and to determine the amount of the results of others’ effort which he shall obtain and the amount of his own product which he shall give up to others.Frank H. Knight ( 1957). Risk, Uncertainty and Profit, p 55
Modern industrial society, the “existing economic order”, performs this twofold task chiefly through free agreement and voluntary exchange between individuals themselves. Economic theory is the analysis of this mechanism.
Liberal justice directs us toward institutions designed to enable citizens to develop their moral powers of responsible self-authorship. Market democratic regimes such as democratic limited government and democratic laissez-faire are designed with this goal in mind. The defining institutional feature of market democratic regimes is that they enshrine a wide range of private economic freedoms as basic constitutional rights. It is this platform of thick economic liberty that most clearly sheers off market democracy from liberal social democracy as a rival democratic form.John Tomasi (2012). Free Market Fairness, p 215
The Invisible Hand spurs development through the virtuous circle of specialization, learning by doing, and gains from trade. …William Easterly (2013). The Tyranny of Experts. Economists, Dictators, and the Forgotten Rights of the Poor, p 254-255
(T)hese basic problems of economics are neglected in development today, starting with the idea beloved by Bill Gates, Jim Yong Kim, and the United Nations Millennium Development Goals: setting goals and then finding evidence-based ways to reach them.
This is not the way the “association of problem-solvers” solves problems. The decentralized system finds the cheapest solutions to problems, through market and democratic feedback from individuals. Which problems get solved – which goals get met – are among the many choices that emerge from this decentralized system. The problems that get solved are those where individuals perceive the highest benefits relative to the costs. In my household, the Millennium Development Goal on ratio of educational television to junk entertainment watched is not met. However, our Millennium Development Goal of a nonzero supply of toilet paper is always met.
William Vogt and Norman Borlaug are among the few who have some glimpse then [in 1946] of the magnitude of the tests that face our species today, as we mover ever closer to 2050, when the world will hold 10 billion souls. But our understanding of how to resolve them differs, as do their view on their causes.Charles C. Mann (2018). The Wizard and the Prophet, p 19.
Vogt sees the city [Mexico] reaching across the dry lake bed to engulf the last fields and streams and says: Hold it back! We cannot let our species overwhelm the natural systems on which we all depend! Borlaug sees the pitiful scrim of wheat and maize on the tract of land and says: How can we give people a better chance to thrive? Vogt wants to protect the land; Borlaug wants to equip its occupants.
Which is correct?
The world is gradually awakening to the fact of its own improvability. Political economy is no longer the “dismal science”, teaching that starvation wages are inevitable from the Malthusian growth of population, but is now seriously and hopefully grappling with the problems of abolition of poverty.Irving Fisher (1925). Our Unstable Dollar and the So-Called Business Cycle.
The by-product of individuals acting predictably in accordance with their economic interests was therefore not an uneasy balance, but a strong web of interdependent relationships. Thus it was expected that expansion of domestic trade would create more cohesive communities while foreign trade would help avoid wars between them.Albert Hirschman (1977). The Passions and the Interests. Political Arguments for Capitalism before its Triumph, p 51-52.
Since power needs the latent presence of chaos as a source of legitimacy, then chaos itself is legitimized and, ironically, may even be celebrated. When Russia actively pursues the destabilization of countries such as Ukraine, this is partially in order to appeal to a rather crude hierarchy of power, between those states that can create order within their borders and those that fail at this basic task. … (S)ince disorder is created from Moscow, order can only be re-stablished from Moscow.Bruno Maçães (2018). The Dawn of Eurasia. On the Trail of the New World Order, p 195