Quotation of the Day…
… is from page 46 of Weiying Zhang’s superb 2024 book, Re-Understanding Entrepreneurship:
The big data planned economy is a paradox. Big data is the result of countless spontaneous actions by people in the market economy. If the planned economy is implemented so that every person follows government decrees, then big data itself will disappear!
DBx: Yes. An inherent and unique feature of markets is that the freedom to use one’s own property to make offers and to reject offers incites individuals to reveal dispersed bits of economically relevant information that cannot otherwise be revealed. Markets do this in part by inciting individuals to experiment with different resource combinations that are then tested against other resource combinations. Because everyone is free to make offers while no one is obliged to accept offers, the market reveals which new experiments improve resource allocation and which do not.
Of course, in this earthly vale market outcomes aren’t error-free; false-positives and false negatives regularly occur. They always will occur. But the relevant comparison is not with an ideal economy run by God, or by god-like economists or industrial-policyists. The relevant comparison is with a command and control method carried out by flesh-and-blood individuals with authority to do that which no market participant can do – specifically, to coerce their fellow human beings. Until and unless industrial-policyists and other advocates of government intervention into the economy offer a plausible account of how government bureaucrats with the power to override market allocations of resources can gain access to more or better knowledge than that which is acted on by market participants, the case for free markets has not been seriously challenged.
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