It is, indeed, part of the liberal attitude to assume that, especially in the economic field, the self-regulating forces of the market will somehow bring about the required adjustments to new conditions, although no one can foretell how they will do this in a particular instance.
There is perhaps no single factor contributing so much to people's frequent reluctance to let the market work as their inability to conceive how some necessary balance, between demand and supply, between exports and imports, or the like, will be brought about without deliberate control.
F.A. Hayek
There is an almost universal tendency, perhaps an inborn tendency, to suspect the good faith of a man who holds opinions that differ from our own opinions.
...When I speak of reason or rationalism, all I mean is the conviction that we can learn through criticism of our mistakes and errors, especially through criticism by others, and eventually also through self-criticism.
Karl Popper
The worst mistake a fighter for our ideals can make is to ascribe to our opponents dishonest or immoral aims.
I know it is sometimes difficult not to be irritated into a feeling that most of them are a bunch of irresponsible demagogues who ought to know better…
We ought to realize that their conceptions derive from serious thinkers whose ultimate ideals are not so very different from our own and with whom we differ not so much on ultimate values, but on the effective means of achieving them
FA Hayek
The great virtue of a free market system is that it does not care what colour people are; it does not care what their religion is; it only cares whether they can produce something you want to buy.
It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.
Milton Friedman
It seems to me one of the great merits of a free society that material reward is not dependent on whether the majority of our fellows like or esteem us personally.
This means that, so long as we keep within the accepted rules, moral pressure can be brought on us only through the esteem of those whom we ourselves respect and not through the allocation of material reward by a social authority.
It is of the essence of a free society that we should be materially rewarded not for doing what others order us to do, but for giving them what they want. Our conduct ought certainly to be guided by our desire for their esteem.
But we are free because the success of our daily efforts does not depend on whether particular people like us, or our principles, or our religion, or our manners, and because we can decide whether the material reward others are prepared to pay for our services makes it worth while for us to render them.
FA Hayek
Academic economics is primarily useful, both to the student and the political leader, as a prophylactic against popular fallacies
Henry Simons
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.'
But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance
Murray Rothbard
As A. Smith was to put it, we owe our bread not to the benevolence of the baker but to his self-interest, a pedestrian truth which is worthwhile to repeat again and again in view of the ineradicable prejudice that every action intended to serve the profit interest must be anti-social by this fact alone.
Joseph Schumpeter
Along with many others of my generation, I was a socialist when I started my university studies.
But my first few economics courses taught me the power of competition, markets, and incentives, and I quickly became a classical liberal.
That means someone who believes in the power of individual responsibility, a market economy, and a crucial but limited role of government.
Gary Becker
Two seemingly contradictory charges are now rife: (a) that capitalism is not "growing" fast enough, and (b) that the trouble with capitalism is that it makes us too "affluent."
Murray Rothbard
Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear; the only success victorious defense may produce is a change in the indictment.
Joseph Schumpeter
The most important single central fact about a free market is that no exchange takes place unless both parties benefit
Milton Friedman
Far too many policy proposals are premised on the absurd notion that privately available profit opportunities exist but remain unnoticed by all but professors, politicians, pundits, and preachers – officious observers who never offer to stake their own funds and efforts on seizing these opportunities.
Seizing with their own private initiative these opportunities (if these opportunities are real) would not only yield well-deserved profits to the these professors, politicians, pundits, and preachers, but it would also solve the very problems that they assert are so awful.
Don Boudreaux
For the bulk of mankind... freedom of choice as owners of resources in choosing within available and continually changing opportunities, areas of employment, investment, and consumption is fully as important as freedom of discussion and participation in government
Aaron Director
Since the fiasco in the Garden of Eden, mankind has suffered from scarcity: there cannot be enough goods and services to satisfy completely all the wants of all the people all the time.
Consequently, man has had to learn the hard way that in order to obtain more of this good he must forego some of that: most goods carry a price, and obtaining them involves the bearing of a cost.
...By developed instinct, the economist initially presumes it to be appropriate that payment of the price should be made by those who receive the good.
"Those who get should pay" is a strong rule of thumb; the economist will deviate from it only for profoundly compelling reasons.
Alchian and Allen
Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
Milton Friedman
I can’t figure out if people are bitching about the market because it works or because it doesn’t work.
Frank Knight
Businessmen who sing the glories of free enterprise and then demand “fair” competition are enemies, not friends, of free markets.
To them, “fair” competition is a euphemism for a price-fixing agreement.
They are exemplifying Adam Smith’s remark that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
For consumers, the more “unfair” the competition the better. That assures lowest prices and highest quality.
Milton Friedman
The existence (and preservation) of a competitive situation in private industry makes possible a minimizing of the responsibilities of the sovereign state.
It frees the state from the obligation of adjudicating endless, bitter disputes among persons as participants in different industries and among owners of different kinds
of productive services. In a word, it makes possible a political policy of laissez faire.
Henry Simons
Laissez faire has never been more than a slogan in defense of the proposition that every extension of state activity should be examined under a presumption of error.
The main tradition of economic liberalism has always assumed a well-established system of law and order designed to harness self-interest to serve the welfare of all.
Aaron Director
The preservation of a free system is so difficult precisely because it requires a constant rejection of measures which appear to be required to secure particular results, on no stronger grounds than that they conflict with a general rule [of non-government intervention], and frequently without our knowing what will be the costs of not observing the rule in the particular instance.
A successful defense of freedom must therefore be dogmatic and make no concessions to expediency, even where it is not possible to show that, besides the known beneficial effects, some particular harmful result would also follow from its infringement.
Freedom will prevail only if it is accepted as a general principle whose application to particular instances requires no justification.
It is thus a misunderstanding to blame classical liberalism for having been too doctrinaire. Its defect was not that it adhered too stubbornly to principles, but rather that it lacked principles sufficiently definite to provide clear guidance
FA Hayek
The normal economic system works itself. For its current operation it is under no central control, it needs no central survey.
Over the whole range of human activity and human need, supply is adjusted to demand, and production to consumption, by a process that is automatic, elastic and responsive.
Arthur Salter
Ever since the beginning of modern science, the best minds have recognized that "the range of acknowledged ignorance will grow with the advance of science."...
Unfortunately, the popular effect of this scientific advance has been a belief, seemingly shared by many scientists, that the range of our ignorance is steadily diminishing and that we can therefore aim at more comprehensive and deliberate control of all human activities.
It is for this reason that those intoxicated by the advance of knowledge so often become the enemies of freedom…
The more men know, the smaller the share of all that knowledge becomes that any one mind can absorb.
The more civilized we become, the more relatively ignorant must each individual be of the facts on which the working of his civilization depends.
F.A. Hayek
...it is utterly pointless to create a legal system governing relationships between individuals that presupposes a degree of benevolence towards strangers that none of us possesses.
One of the great merits of the classical liberal system is that it allows benevolent feelings to express themselves where they can be quite strong – most particularly with family and close friends. Yet it also gives us an intelligent way to interact with perfect strangers.
...We understand that there is generosity in this world.
But we do not want to make too much of a good thing: we also recognise that we have our more limited sides.
A market system manages to channel these self- interested energies into socially productive uses, so that we are not afraid of ordinary people making their living by entering into contracts with others.
Richard Epstein
Society can thus exist only if by a process of selection rules have evolved which lead individuals to behave in a manner which makes social life possible
F.A. Hayek
Economic progress, in a capitalist society, means turmoil.
Joseph Schumpeter
...It is clear that economic progress requires and causes significant changes in social institutions and in the people who are served by them.
Bauer and Yamay
It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics is such is a challenge to the conceit of those in power
Ludwig von Mises
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.
F.A. Hayek
In choosing between social arrangements within the context of which individual decisions are made, we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others.
Furthermore we have to take into account the costs involved in operating the various social arrangements (whether it be the working of a market or of a government department) as well as the costs involved in moving to a new system.
In devising and choosing between social arrangements we should have regard for the total effect. This, above all, is the change in approach which I am advocating.
Ronald Coase
We are liberals in this classical or European sense, and we prefer a decentralized economic, political, and social milieu that allows freedom of choice as long as one person’s freedom does not impose clear and sizeable harm on others.
Such liberals are not conservative in the traditional meaning of wanting to preserve the status quo.
Although classical liberals recognize that what has survived is often functional and contributes to social welfare, they also realize that some hallowed customs and traditions in law, politics, and the economy have survived because of the influence of powerful interest groups that orient public policy in their own favor
Gary and Guity Becker
The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders.
Ludwig von Mises
There is one central fact about the economic history of the twentieth century: above all, the century just past has been the century of increasing material wealth and economic productivity.
No previous era and no previous economy has seen material wealth and productive potential grow at such a pace.
The bulk of America's population today achieves standards of material comfort and capabilities that were beyond the reach of even the richest of previous centuries.
Even lower middle-class households in relatively poor countries have today material standards of living that would make them, in many respects, the envy of the powerful and lordly of past centuries.
Brad DeLong
Poverty in the relative sense must of course continue to exist outside of any completely egalitarian society: so long as there exists inequality, somebody must be at the bottom of the scale.
But the abolition of absolute poverty is not helped by the endeavour to achieve ‘social justice’; in fact, in many of the countries in which absolute poverty is still an acute problem, the concern for ‘social justice’ has become one of the greatest obstacles in the elimination of poverty.
In the West the rise of the great masses to tolerable comfort has been the effect of the general growth of wealth and has been merely slowed down by measures interfering with the market mechanism….
But the attempts to ‘correct’ the results of the market in the direction of ‘social justice’ have probably produced more injustice in the form of new privileges, obstacles to mobility and frustration of efforts than they have contributed to the alleviation of the lot of the poor.
F.A. Hayek
There will not be one kind of community existing and one kind of life led in utopia.
Utopia will consist of utopias, of many different and divergent communities in which people lead different kinds of lives under different institutions.
Some kinds of communities will be more attractive to most than others; communities will wax and wane.
People will leave some for others or spend their whole lives in one.
Utopia is a framework for utopias, a place where people are at liberty to join together voluntarily to pursue and attempt to realize their own vision of the good life in the ideal community but where no one can impose his own utopian vision upon others.
Robert Nozick
All solutions have costs, and there is no reason to suppose that governmental regulation is called for simply because the problem is not well handled by the market or the firm.
Satisfactory views on policy can only come from a patient study of how, in practice, the market, firms and governments handle the problem of harmful effects….
It is my belief that economists, and policy-makers generally, have tended to over-estimate the advantages which come from governmental regulation.
But this belief, even if justified, does not do more than suggest that government regulation should be curtailed.
It does not tell us where the boundary line should be drawn. This, it seems to me, has to come from a detailed investigation of the actual results of handling the problem in different ways.
Ronald Coase
It would scarcely be too much to claim that the main merit of the individualism which he and his contemporaries advocated is that it is a system under which bad men can do least harm.
It is a social system which does not depend for its functioning on our finding good men for running it, or on all men becoming better than they now are, but which makes use of men in all their given variety and complexity, sometimes good and sometimes bad, sometimes intelligent and more often stupid
FA Hayek
A just war exists when a people tries to ward off the threat of coercive domination by another people, or to overthrow an already-existing domination.
A war is unjust, on the other hand, when a people try to impose domination on another people, or try to retain an already existing coercive rule over them.
Murray Rothbard
There is a profound moral differences between the use of force for liberation and the use of force for conquest
Ronald Reagan
The House of Commons starts its proceedings with a prayer.
The chaplain looks at the assembled members with their varied intelligence and then prays for the country
Lord Denning
“BIS paper undermines the Reserve Bank’s case”
That’s the negative case.
For Balance – Do you know of a positive case?
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Reserve bank website is best place for that.
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