The path away from economic freedom is, as Hayek long ago demonstrated, the road to serfdom. The road may be a long one: the pace may be swift or slow: but the destination cannot be changed. State ownership, state monopolies, state regulation and state planning, through the centralisation of economic power, inevitably lead to economic failure. They inevitably increase both the temptation and the scope for abuses of political power until freedom itself is threatened. The planned economies, the controlled societies which socialism requires, pervert what are truly economic decisions for the market into political decisions for the politician or the bureaucrat. The fruits of centralised economics are corruption, poverty and servility-and in the socialist society the only medicine which may be prescribed is heavier doses of the same socialist poison.
Norman TebbitRelated topics
bureaucrat control destination economics failure freedom heavy increase lead market medicine pace path pervert plan planning poison poverty power regulation road serfdom slow socialist state swift temptation HayekRelated quotes
I never believed, as many Marxists professed to do, that normative principles were irrelevant to the socialist movement, that, since the movement was of oppressed people fighting for their own liberation, there was no room or need for specifically moral inspiration in it. I thought no such thing partly for the plain reason that I observed enormous selfless dedication among the active communists who surrounded me in my childhood, and partly for the more sophisticated reason that the self-interest of any oppressed producer would tell him to stay at home, rather than to risk his neck in a revolution whose success or failure would be anyhow unaffected by his participation in it. Revolutionary workers and, a fortiori, bourgeois fellow-travellers without a particular material interest in socialism, must perforce be morally inspired.
Gerald Cohen
... a rather different class of applications of the idea of best allocation of scarce resources... usually referred to as the theory of optimal economic growth. In most studies of this kind made in the countries with market economies there is not an identifiable client to whom the findings are submitted as policy recommendations. Nor is there an obvious choice of objective function, such as cost minimization or profit maximization in the studies addressed to individual enterprises. The field has more of a speculative character. The models studied usually contain only a few highly aggregated variables. One considers alternative objective functions that incorporate or emphasize various strands of ethical, political, or social thought. These objectives are then tried out to see what future paths of the economy they imply under equally simplified assumptions of technology or resource availability.
Tjalling Koopmans
A final aspect of all open access orders is Schumpeter's notion of creative destruction, one of the most powerful descriptions of a competitive, open access economy. When Schumpeter wrote Capitalism, Socialism, and Democracy in the early 1940s, the economic theory of perfect competition among atomistic firms (i. e., firms too small to have market power) had come under sustained attack as unrealistic. Large and powerful economic organizations dominated the new economy, and their behavior did not match the textbooks. Despite this dominance, the economy produced historically unprecedented, sustained economic development. Schumpeter asked, How could large businesses that were supposed to choke off competition and growth nonetheless generate such spectacular productivity increases in a world that seemed ever more competitive?
Douglass North
Private property capitalism and egalitarian multiculturalism are as unlikely a combination as socialism and cultural conservatism. And in trying to combine what cannot be combined, much of the modern libertarian movement actually contributed to the further erosion of private property rights (just as much of contemporary conservatism contributed to the erosion of families and traditional morals). What the countercultural libertarians failed to recognize, and what true libertarians cannot emphasize enough, is that the restoration of private property rights and laissez-faire economics implies a sharp and drastic increase in social "discrimination” and will swiftly eliminate most if not all of the multicultural-egalitarian life style experiments so close to the heart of left libertarians. In other words, libertarians must be radical and uncompromising conservatives.
Hans-Hermann Hoppe
Keynes didn't make an all-out assault on Economic Man, but he often resorted to plausible psychological theorizing rather than careful analysis of what a rational decision-maker would do. Business decisions were driven by "animal spirits,” consumer decisions by a psychological tendency to spend some but not all of any increase in income, wage settlements by a sense of fairness, and so on.
But was it really a good idea to diminish the role of Economic Man that much? No, said Friedman, who argued in his 1953 essay "The Methodology of Positive Economics” that economic theories should be judged not by their psychological realism but by their ability to predict behavior. And Friedman's two greatest triumphs as an economic theorist came from applying the hypothesis of rational behavior to questions other economists had thought beyond its reach.
Paul Krugman