Front Page Titles (by Subject) V: Planning - Literature of Liberty, October/December 1978, vol. 1, No. 4
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V: Planning - Leonard P. Liggio, Literature of Liberty, October/December 1978, vol. 1, No. 4 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Government planning and regulation has had a long history, characterized by noble aspirations and disappointing results. As the following summaries disclose, national and international government intervention has detrimentally affected the mails, charity, schooling, labor, industry, and the economy through war, inflation, and trade barriers.
Professor Hughes's opening summary sketches the ongoing effects of government war planning and regimentation into peacetime. Peacetime government planning continues the inroads toward centralization, control, and bureaucracy initiated during war crises. One underlying reason for the continuity of wartime and peacetime planning appears as a unifying motif in the following summaries: the government's desire to predict and control human behavior even at the expense of personal freedom and diversity. Friedrich Hayek's summary, as well as others, reveal how self-defeating and doomed in the long run are all such government attempts to control the natural, spontaneous social and economic order through artificial planning. The results of planning in the real world include: constricted individual initiative, stifled charity, political expediency, inflation, schooling in conformity, black markets, and planning bureaucracies.
Regulation and the Warfare State
“Progressives and the Impact of World War I.” In The Governmental Habit: Economic Controls from Colonial Times to the Present. New York: Basic Books, 1977, pp. 133–145.
The growth of the planned economy is not a recent innovation in America. The roots of nonmarket controls of economic decisions stretch back in our remote past. We have, as it were, become addicted to the government. While those who have turned to the government have aided and abetted its growth, we cannot say that what exists constitutes a system intentionally created by willful men. On the contrary, it is a mishmash of different governmental responses to perceived group needs.
Professor Hughes chronicles the growth of federal intervention in the control of the economy from colonial times to the present. In this section he examines the effects of the twentieth century's wars on the growth of government's role in economic activity.
His thesis is that “the wars of our century made such expansions of federal power possible.” The “psychological influence of successful war efforts,” augmented the acceptability of increased centralization of power in the federal executive and accelerated trends already present. In the process, commitment to the free market diminished. Increasingly Americans turned in peacetime to the solution that had seemed to work so well in wartime: centralized governmental decision making and nonmarket controls to solve problems. By the time Nixon imposed price controls in 1971, “the leaders of the American economy could accept direct controls with barely a whimper.”
The socially disintegrating effects of modern war on American freedom parallel ancient warfare's undermining of the Roman Republic. The direct legacy of war is obvious. Less obvious is the increased acceptance of federal nonmarket controls. The Progressives' domestic interventions set the stage “psychologically and structurally” for the war interventions, which then multiplied post-war governmental controls.
“National emergency became the catch-all justification for extensions of federal power into the private economy.” The most famous war-time entry of government into the private economy was the World War I takeover of the railroads. The trickery and secrecy behind Wilson's maneuver and seizure presaged the Gulf of Tonkin Resolution. Moreover, apparently innocuous and “temporary emergency” measures enacted in wartime, provided government with powers which they extended into peacetime. Wilsonian wartime control of food production was legalized in the Lever Food-Control Act. It was under this act that Attorney General Palmer conducted post-war persecution of “foreign radicals.”
American society could not return to pre-1914 arrangements. The whole social system of peace, free trade, and individual liberty had been crippled. Many of the domestic intrusions remained, if only in dormant stage, to be resurrected in the 1930s economic crisis and the next war. Tragically, the growth of government paved the way for successive wars and wartime interventions, whose effects are still with us.
Mail, Privacy, and Social Control
“How Uncle Sam Covers the Mails.” Civil Liberties Review 4 (May/June 1977): 20–28.
Even such an apparently benign governmental monopoly as the postal service can, through regulation, serve sinister ends and violate individual privacy. The federal government has long used “mail covers” as a tool of investigation and surveillance. A “mail cover” involves the recording of information from the outside of envelopes of first class mail received by citizens.
Mail cover first appears as an investigative technique in the Postal Regulations of 1879. Its original intent was to supply information to postal inspectors about fugitives and “fraudulent schemers.” In 1948 the regulations were modified to allow a mail cover at the request of any federal executive department or agency. One of the first victims of these new mail regulations was Senator Joseph McCarthy. In 1952, the Senate Subcommittee on Privileges and Immunities covered McCarthy's mail on the allegation that he was using Senate funds for stock speculation. The adverse reaction to the invasion of McCarthy's privacy through mail cover spurred the Post Office Department in 1954 to rewrite the postal regulations. The revised regulations again restricted access to postal information to postal inspectors and law officers seeking fugitives.
More recently, the mail cover regulations were rewritten following Senator Long's Congressional Hearings titled “Invasions of Privacy by Governmental Agencies.” The new regulations did little more to restrain invasions of privacy than did the 1954 regulations.
Mail covers stirred public attention again in 1975 with a review of government surveillance techniques by the House Judiciary Subcommittee on Civil Liberties. Postal authorities, it was divulged, had granted mail covers to such agencies as a Fish and Wildlife Commission, the IRS, the FBI, the CIA, and the Royal Canadian Mounted Police. More significant was the discovery that no standards existed for regulating the use of “national security” mail covers.
A promising effort to limit mail covers is Congress's HR 214 (April 1976). This bill seeks to limit both those who can authorize or request mail covers and the duration of a mail cover. The bill also would permit mail covers to be used only in connection with investigating felonies and would require notifying the subject of the mail cover that his mail had been surveyed at the end of the cover. Because of opposition by the Justice Department to portions of HR 214, the bill was reported back to the Subcommittee.
Corporate State Capitalism: Coal
“State Monopoly Capitalism in Germany: The Hibernia Affair.” Past and Present 78 (February 1978): 82–112.
The Prussian government attempted in 1904 to secretly purchase shares of the Hibernia Coal Mining Company. This sparked a formidable battle between the Prussian state bureaucracy and the private owners, managers, and bankers who formed the active beneficiaries of the Coal Syndicate, a cartel that controlled over 88 percent of Prussia's coal supply. What triggered the government's policy may have been its belief that the coal operators were creating vertical coal and steel trusts, in emulation of America's U.S. Steel. A trust would be intolerable to the Prussian state for it threatened the stability of the State's military power based on its free access to coal and steel resources not under state control. On the other hand, the government feared pure competition because of the adverse political effects of cyclical fluctuation of prices, wages, and employment. Therefore, it preferred to maintain the coal cartel. Ownership of Hibernia Coal Company would give it the leverage to dominate the cartel and prevent the formation of a trust. Also at issue was the larger question of whether the state bureacracy or the coal and steel magnates and their banker allies would dominate the State.
The Hibernia Affair has become a crucial event among Marxist historians who interpret it as the early phase of the process by which large scale capitalist enterprises and state power integrate into a single mechanism of “state monopoly capitalism.” In Germany it was the occasion for capitalists to test their power. They aimed at defying the bureaucratic will of the Prussian State to bring to heel all possible challengers to its dominance. Skirmishes continued until 1914 when the war fever caused the State to co-opt private industry into the state war machinery.
During this affair, private bankers used naive government officials for their private ends. Bankers played a key role in organizing the resistance of the Coal Syndicate. This meant the continual failure of the cartel to maintain its agreed price and supply structure, provoking in turn mounting fears among the syndicate members and the government that competition would thwart their aims. The government's own coal mines were so inefficient that only the cartelized price structure made the government's product marketable. Medalen concludes that the Prussian government's failure to nationalize the Hibernia Coal Company was a significant victory for the “bourgeoisie.” Germany did not get “state socialism” but rather what American historians call “corporate state capitalism.”
French War “Planification”: Chlorates
“Contribution à l'histoire des ententes industrielles (à partir d'un exemple, L'industrie des chlorates).” (A Contribution to the History of Industrial Alliances: The Chlorate Industry.) Revue d'histoire économique et sociale 54 (1976): 118–129.
The history of industrial alliances and cartels in connection with French government regulation of the chlorate industry in Europe repays study. International cartelization was part of the general movement toward protectionism which occurred in late nineteenth-century Europe.
In the late nineteenth century the French state exercised an important role in the market for chlorates through its demand for explosives and its monopoly of the manufacture and distribution of matches. More importantly, government customs barriers were essential in developing national monopolies which in turn developed into the international cartel. Customs barriers allowed the cartel to maintain coercively high profit levels which the cartel itself enjoyed rather than the individual manufacturers. This economic factor accounted for the continued strength of the cartel. Competitors were either co-opted into the cartel as junior partners or purchased outright. These were the favored tactics, since price cutting to force out competitors proved to be dangerous. Market forces—heavy speculative buying by chlorate consumers—tended to keep the price down.
After World War I, the growing trend toward national economic autarky ended the international cartel. National monopolies, however, grew stronger by the virtual elimination of international competition. In the international climate of the period, national cartels and the occasional alliances among them seem to have been less forms of regulation than weapons of war controlled by state policy.
Bureaucracy and British Regulation
“The Erosion of State Intervention in Britain, 1917–1924.” The Economic History Review (May 1978): 270–286.
Why did Britain delay until the years following World War I to introduce interventionist policies on a broad front? This question is prompted by several factors: the electorate trebled in 1918; the state established a number of “interventionist” ministries during the first World War; and interventionist views flourished. For example, in 1923 the Financial Secretary to the Treasury declared that it was inhuman to let the unemployed starve and that the State would have inflation if inflation was the only way to prevent starvation. All these factors seemed to have set the stage for a high degree of interventionism during the inter-war years.
To answer why massive state intervention was laggard, we need to examine wage regulation and the role of the new interventionist ministries. During the War the Haldane Committee on the Machinery of Government had warned that the projected centralization of the civil service required that the Treasury change its attitudes about public expenditure and long-term policy. The Treasury, however, did not change its attitude and, in fact, immediately after the War, Treasury control waxed stronger. In 1919 the Permanent Secretary became head of the civil service with the right to advise the Prime Minister on the appointment of senior officials in all departments. Moreover, beginning in 1920, the Treasury acquired the right to have all proposals of increased expenditure referred to it before being submitted to the Cabinet. Since the Treasury also controlled promotions, senior civil servants were reluctant to challenge its views.
The Cabinet itself was also reluctant to oppose the Treasury. This first became apparent in 1921 at the outset of the depression when Lloyd George's cabinet panicked and lost faith in its previous policies. Some ministries did attempt to involve themselves in long-term policy after the War, but the Treasury succeeded in contracting departments “staffed by thinkers and those who apply information and statistics to problems and indicate policy.” The officials in the interventionist ministries lacked the conviction and economic sophistication to challenge the Treasury successfully and their influence declined during the inter-war years. The fact that broadly-based interventionist policies did not emerge between the wars may therefore be attributed to Treasury control, political ambivalence, and the internal weakness of the interventionist ministries.
British Foreign Policy and Stagnation
“Britain: The Politics of Foreign Economic Policy, the Domestic Economy and the Problem of Pluralistic Stagnation.” International Organization 31 (Autumn 1977): 673–721.
How did British international ambition and domestic regulatory policies engender the economic stagnation that England has experienced in the post-World War II period?
The author contends that the failure of the British economy was due primarily to efforts by successive British governments to maintain an international role beyond the nation's capabilities. When combined with a determination to maintain the external strength of the British sterling, this policy resulted, after 1967, in heightened domestic social conflict and in the politicization of economic policy. Poor economic performance resulted in the post-war years.
Britain suffered from its military and foreign aid expenditures abroad. The author concentrates on the efforts by the government to maintain the existing exchange rate, and appears to favor an inflationary domestic economic policy combined with a willingness by the government to allow the value of the currency to fluctuate on the international exchange.
Political Decisions and the Economy
“A Politico-Economic Model of the United Kingdom.” The Economic Journal (UK), (June 1978): 243–253.
It is scientifically and morally interesting to consider the political psychology revealed in the Frey-Schneider “positive model” of politico-economic interrelationships. The two economists base their model on empirical data gathered from the revealed preferences of politicians' policy decisions in the United Kingdom. They claim that their model (given data regarding both the current state of the economy and the current popularity of the in-party) would allow us to intelligently forecast future political and economic decisions that politicians would make because of political expediency. “The basic assumption advanced is that the governing party aims to stay in power and therefore seeks to increase its popularity with the electorate when its (perceived) re-election chances are low.”
The government's popularity is affected by the state of the economy. When, on the one hand, the government is popular and assured of re-election, it is free to choose its policies on the basis of its ideological preferences. (Following ideological preferences, a left wing government tends to increase, whereas a right wing government tends to decrease increments in the national budget.) When, on the other hand, the government's lead over the opposition party falls below a critical level, it resorts to inflationary or expansionary policies to win back voter popularity. In addition, the balance of payments has a significant effect on policy as does an autonomous “election cycle,” which tends to decrease the in-party's popularity between elections.
In the United Kingdom, the governing party's popularity (as revealed in regular Gallup polls of voters) depends on the state of the economy: “A rise in the rate of inflation by 1% reduces the government's lead by about 0.6% and an increase in unemployment by 1% reduces the government's lead by about 6%....”
Government, Labor, and Multinationals
“Transnational Enterprises and the New Political Economy of U.S. Trade Policy.” Oxford Economic Papers (March 1977): 102–116.
In the orthodox literature of international trade, the State's image is the representative of all individuals and firms for whom it acts to maximize their collective welfare. Kindleberger, however, argued that the State pursues the interests of powerful groups (“Group Behavior and International Trade,” Journal of Political Economy, February 1951). In recent years further work has studied this group interest approach in the U.S.
In this framework, what are the origins of recent U.S. commercial policies and, in particular, what effects have resulted from the rise of the U.S. based multinational corporations? The author assumes that group interests pressure the government institutions which form trade policy. The resulting policies reflect the strength or weakness of vested interests rather than the social welfare of the United States.
An examination at the micro-level of the political origins of U.S. commercial policy suggests: (1) that organized labor has shifted from being liberal to being protectionist; (2) that the Democratic Party has become more protectionist than the Republican Party; (3) that pressures in trade policy now come more frequently from particular industries rather than from broad-based cross-industry associations; and (4) that labor and industry within the same industry have increasingly substituted antagonism for their traditional mutual accord.
Since World War II multinational firms have grown rapidly and a considerable proportion of international trade now takes place on an intra-firm basis in oligopolistically organized markets. Multinational firms favor freedom in international trade and in factor movements.
The emerging multinational firm has also weakened the position of labor in every U.S. industry. Labor worries about international trade in those firms with little prospect of intra-industry trade (especially where competing imports originate in less developed countries) and therefore with scarce employment gains to offset the possible job losses from imports.
The changed attitudes of the two political parties reflect these developments. Trade policy now follows the pressures exerted by (1) organized labor favoring protection in those industries where labor is most vulnerable and by (2) the U.S. based multinational firms favoring the reduction of trade barriers for the goods which they trade. The multinationals have little interest in the relatively labor intensive and declining industries. In general where unions and multinationals oppose each other, policy makers tend to prefer the interests of the multinationals.
Black Markets vs. Regulation
“The Subterranean Economy.” Financial Analysts Journal (Nov/Dec 1977): 26–27, 34.
This study is the first systematic attempt to measure the size of the subterranean, extra-legal economy that has prospered as Americans have increasingly sought to evade both taxation and regulation of their business activities. The government's disregard for the existence of this subterranean economy has meant understating the country's actual GNP statistics, as well as overstating the extent of unemployment (since many who are officially unemployed are in fact employed in this unacknowledged economy).
The natural reluctance of participants in the subterranean economy to report their activities to the government has always been a major stumbling block in measuring its size and growth. Gutmann has succeeded in estimating the size of the subterranean economy by devising an imaginative methodology which involves comparing the relationship over time between the two components of the nation's stock of money (M1): currency and demand deposits (checking accounts). Gutmann hypothesizes that, as an economy develops, more transactions are typically carried out with checking accounts. Demand deposits, therefore, should grow more rapidly than currency. However, currency (cash) is the essential medium of exchange for the subterranean extra-legal economy since it permits transactions to occur without leaving any record. Thus, an increase in the amount of currency in relation to the amount of demand deposits may signal growth in the subterranean economy in relation to the “official” economy.
Using this methodology, Gutmann reviews the period 1892 to the present and discovers that between 1892 and 1941, as one would ordinarily expect, demand deposits did grow more rapidly than currency. However, in the period 1941 to 1945 this trend reversed itself, and cash grew more rapidly than demand deposits, a result which Gutmann attributes to the prevalence of black markets and tax avoidance during World War II. Between 1945 and 1961 the earlier growth of demand deposits revived once again but, beginning in 1961 and continuing until today, cash once more grew more rapidly than demand deposits. Gutmann concludes that, by 1976, the subterranean economy had an “illegal GNP” of $176 billion and that rising tax rates and the increasing burden of government regulations will continue to drive more and more of the total U.S. economy underground.
“The subterranean economy, like black markets throughout the world, was created by government rules and restrictions. It is a creature of the income tax, of other taxes, of limitations on the legal employment of certain groups, and of prohibitions on certain activities. It exists because it provides goods and services that are unavailable elsewhere or obtainable only at higher prices. It also provides employment for those unemployable in the legal economy; employment for those...whose freedom to work is restricted; and incentive to do additional work for those who would not do so if they were taxed.”
Regulation vs. Academic Autonomy
“An End to Autonomy: Who Pulls the Strings?” Change 10 (1978): 28–34, 62.
The question now confronting government-university relationships is whether government funding inevitably entails government intervention. Rosenzweig notes that “virtually the whole range of public regulatory activities now bears on the university.” The result has been a growth in internal bureaucracy. Still, activities in the classroom, laboratories, and even admission committees have not been subject to much direct government regulation.
Particular problems, however, have developed for medical schools in their relations with the government. One example concerns American students, enrolled in foreign medical schools, who then seek to transfer to American schools. Efforts to increase the number of such transfers threatened loss of federal capitation grants unless the schools changed their normal admission requirements. After a confrontation within Congress over this issue, a very moderate resolution emerged that did not compromise admission requirements. After a confrontation within Congress over this issue, a very moderate resolution emerged that did not compromise admission requirements. Still the threat of government control left many medical school administrators shaken.
Another recent issue of government intervention concerns regulations directed toward the conducting of research on recombinant DNA. The author states: “What is at stake is not simply the means by which an important but still narrow line of research will be regulated, but almost certainly the way in which biomedical research generally will be dealt with.” The author points to the inappropriate nature of a democratic solution to this problem.
Such problems are the forerunner of similar, broader problems which other segments of the university community may soon encounter.
Government Schools and Social Control
“Social Change, Discipline, and the Common School in Early Nineteenth-Century America.” Journal of Interdisciplinary History 1 (Summer 1978): 1–17.
During the late pre-Civil War period in U.S. history (1830-1860), the formal education of children underwent fundamental change: the common school established itself as virtually independent of control by parents in educational matters. Parents ultimately traded control over their children's education for the status students acquired through literacy and technical training. Parents never fully acquiesced in the transformation of schooling, however, and the conflict between parents and teachers during this period produced the crisis of early American education that culminated in the modern school.
The crisis arose from the conflict between the two groups over the extent to which teachers could discipline students. Discipline stood at the center of the transformation in education. Without the freedom to chastise sluggish or rebellious children, the school claimed it could not perform its mission. At stake was the ability of schools to produce docile laborers and citizens. Through discipline teachers could break the bonds of home-formed habits and instill in children new, more malleable values designed to meet the goals of progressive schooling.
Parents often and vigorously objected to school discipline. The historical record abounds with examples of parents, singly or in groups, withdrawing their children from classes supervised by overzealous disciplinarians. In one instance the withdrawal was so complete and resolute that the local school board accused the parents of sedition resembling that of the southern states. Generally, however, the objections to discipline took less pronounced forms. Children either were kept at home for short periods of time, or the parent would voice anger at a public meeting. A compromise eventually mitigated the stance of both sides even though the balance ultimately tipped in favor of the schools. Children stayed at home until age five or six and then attended school for a prescribed number of days each year for the ten years thereafter. Thus parents were allowed to share with teachers in the socialization of children, but during the critical period of adolescence, when youths oriented themselves to work and politics, the state schools sought firm and exclusive control.
The Economics of Charity
“The ‘crowding out’ Effect of Governmental Transfers on Private Charitable Contributions.” Public Choice 33 (1978): 29–40.
Does governmental welfare discourage private charity?
Many studies trace how government spending affects interest rates and price levels, but few studies have investigated the effects of government spending on private spending habits. How, in particular, do social welfare transfers affect private charitable contributions?
Since World War II, government spending on welfare has increased more rapidly than private charitable contributions. Private charity per tax return has remained the same despite the tax advantages of charitable donations. What explains this paradox is the growth of government welfare spending.
Private charity has frequently been characterized as a public good subject to a free rider problem. Yet charity allows sufficient noneconomic motivation to overcome the reluctance for individuals to donate charity (specifically, the motivation to “do good”). However, the number of charitable contributions depends upon personal tastes, income, and the relative cost of making such contributions.
Within this framework, increasing government transfers will have two effects on private transfers: (1) a substitution effect (government transfers will be taken as substitutes for private charity), and (2) an income effect (increased taxes used to finance transfers will reduce private incomes and hence private charity). The income and substitution effects can be analyzed by three models of private charity. The first, the ultra-rational, hypothesizes that a private individual regards government spending as his own so that he considers one dollar of government transfer is equivalent to one dollar of private donations. This model would predict complete crowding out of private charity. The second model includes interdependent utility functions between donor and recipient so that increases in government transfers lower the marginal utility of an additional dollar to the recipient, and hence donors contribute less. This would predict partial crowding out. The third model, the “better to give than to receive” hypothesis, assumes satisfaction is obtained from the act of giving, and hence there would be no substitution effect but some income effect.
The authors tested an empirical model in which contributions depended upon the cost of giving (marginal tax rate), income, and the number of government transfers. The findings were that government transfers do crowd out private donations. The substitution effect alone shows a .2 percent decrease in private donations for every one percent increase in government transfers. With the income effect added in, the total effect of crowding out is about 28 percent.
International State Planning and Inflation
“Coordinated International Economic Expansion: Are Convoys or Locomotives the Answer?” Federal Reserve Bank of St. Louis Review 60 (July 1978): 11–19.
The international Organization for Economic Cooperation and Development (OECD) espoused the “locomotive” approach in December 1976. This approach to international economic policy puts the responsibility for stimulating world output on the three major industrial countries (Germany, Japan, and the United States). They were to expand aggregate demand in each of their countries so as to cause demand in other countries eventually to increase. But one year later, the OECD Secretariat changed its policy approach, recommending instead that all governments expand aggregate demand in tandem (the “convoy” approach).
Both proposals assume the existence of significant unused capacity in most OECD countries. If true, economic growth could occur without aggravating price inflation. Alternatively, OECD countries are viewed as having unemployment concentrated in export industries. Scant evidence exists for either hypothesis. Regardless, the necessary monetary expansion will increase price inflation, even if there are some temporary effects on real output. Moreover, since evidence suggests that space capacity is not present, there would not even be any short-run benefits.
OECD countries with low price inflation and balance of payment surpluses have not retarded expansion in deficit countries. Rather, by lending savings to deficit countries, surplus countries have benefited the former. Thus, acceleration in the growth of aggregate demand in Germany and Japan would provide little additional help to their OECD trading partners. Instead, by not undertaking such expansion, Germany and Japan support countries with weaker economies. Policies for coordinated international economic expansion would aggravate the problems that such expansion is intended to correct.
Competition and Individual Knowledge
“Competition as a Discovery Process.” In New Studies in Philosophy, Politics, Economics and the History of Ideas. Chicago: University of Chicago Press, 1978, pp. 179–190.
If the assumptions behind certain models of competition were true of the real world, then competition would, indeed, be a wasteful way of allocating resources. Economists assume all the relevant data are known. Were this the case, competition should be eliminated in favor of central planning. The world assumed into existence by standard competitive models is one far more consonant with central economic direction and socialism than with decentralized planning and capitalism. These models, however, do not fit the real world.
Real life competition, by contrast, endeavors to discover facts that are wrongly presumed as costlessly available (data) in economic models: “Wherever the use of competition can be rationally justified, it is on the grounds that we do not know in advance the facts that determine the actions of competitors.” Competition is thus valuable because its results are unpredictable, which implies that these generally beneficial effects include disappointing certain expectations. A competitive order is one in which some individuals are necessarily disappointed. This dynamic view is in sharp contrast to the economists' “competitive” world in which all expectations are met and all plans executed. In mainstream economics, “competition” is a static state which excludes the activity of real world competition. “Competitive” theory has little to tell us about the real world of change, disappointed expectations, and plan revision.
The prevailing view of competition stems from treating the order produced in a market as an “economy.” Strictly speaking, of course, an economy involves a given hierarchy of ends and the application of means so as to maximize the value of these attained ends. This conception is irrelevant, however, to a situation of many individuals with different goals independently pursuing their ends. The market produces a spontaneous order in which the different, shifting ends of individuals are satisfied. A market order does not have any preordained, static ends, nor can one express the value of the results as the sum of its individual products. A spontaneous order is one conducive to individuals achieving whatever their respective ends happen to be. No single a priori value is being maximized.
Socialists demand “social justice” to replace the market's unequal distributions of wealth. In the name of protecting some from the market, the logic of a policy of social justice would impede adjustment to unforeseen change, and thus, the operation of the market itself.
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