India Uncut

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Saturday, March 18, 2006

Unleashing millions of creative people

I'm often criticised for being a strong supporter of free markets, and Don Boudreaux defends that position in Cafe Hayek:
I admit that my proposed solution for many public-policy problems is to say "Let the market handle it." But this response is neither naive nor lazy. It's realistic. It reflects my understanding that almost any problem you name -- rebuilding the Katrina-ravaged Gulf Coast, providing excellent education for children, reducing traffic congestion on highways -- is most likely to be dealt with efficiently, fairly and effectively by the market rather than by government.

Saying "Let the market handle it" is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.

To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances.
'Markets' have been caricatured by their opponents as being spaces where evil corporations exploit hapless workers and take consumers for a ride. Quite the contrary. Free markets with a proper rule of law -- a prerequisite for markets to function well -- empower consumers, and it is you and me and millions like us who, with our choices, run the world. When governments distort markets, getting in the way of our exercising our choices freely, or limiting the options and opportunities that would otherwise be available to us, they do us a disservice.

(Link via email from Naveen Mandava.)
amit varma, 9:21 AM| write to me | permalink | homepage

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