Private Ownership of the Means of Production confers a Social Benefit

Perhaps the most difficult battle faced by the advocates of free markets it to convince people that Private Ownership of the Means of Production is not some special privilege conferring and advantage to "greedy capitalists" at the expense of everyone else, but that it serves a social function that is beneficial to all.

Private ownership makes the accumulated wealth of the entrepreneur a slave to the consumer - that is - to everyone else. We commonly understand private ownership to mean "for our own use," eg. the use of a toothbrush or a private residence, but in the case of private ownership, what is owned is almost exclusively for the use of others, placed at their service.

The capitalist keeps his wealth only to the extend he continues to use what he has accumulated in the interests of the masses, as they judge them, by churning out whichever goods and services they demand. To the extent he succeeds, his wealth will grow. This is the economy’s way of saying that he makes sure and wise decisions with the capital we have amassed as a society - not wasting them on projects that the public have no interest in paying for. To the extent he fails to do so, those factories, machines and companies that his investments represent will be sold on at knock-down rates to whoever thinks they can do a better job of managing them in the public interest. This allows for the constant re-allocation of capital to those who can best manage it, and engenders the accumulation of more capital over time. As the capital stock increase there is more wealth generation and technological advancement can be expected, and this will necessarily be largely led by the preferences of consumers, not those who actually "own" the capital.

If you're not growing you're dying.

It takes a long time to make changes in public institutions. You have to get enough of the public interested to make it an issue, you might need to get into the media which itself is a hell of a job and even if you do rouse some attention the best most people can hope for is to vote, and they need to vote for one of the package deals on offer. Even if your reform is quite modest and sensible and its benefit is uncontroversial, it may be adopted by a party who have several other ideas on your mind that you disagree with. There is another path, and that is to get a small concentrated number of people who already have a lot of influence to get on board with your ideal and push it through as a bill but even then the matter is not settled; it needs to go through levels of bureaucrats, managers and administrators before the change enters into the system at large and even then many employees will resist the change because they resent being told what to do by central planners.

If we take the example of our education system there has been no small amount of evidence on how to improve it since the 60s when a wave of intellectual idealists from the flower power generation began discussing how "getting things right" when it came to government could change the world. Some of this data has been around for over fifty years, some of it is still coming out. Have these reforms not been adopted for a lack of political will? Yes to a degree but also because of the insurmountable obstacles to mustering the political will. The largest is the simple fact that most people are more comfortable doing what they have always done than doing something new. Doing things differently is anxiety-provoking and it is very irritating to be told or forced to do it by an authority figure, even one who has the evidence on their side, when you think, "Well I have been on the front lines doing it this way my whole life, this is how I was taught to do it in four years of university I think you'll find I know how its done thank you very much you government busy body."

One of the reasons why markets are so important, and why products adapt to user preferences far quicker is because only one person needs to be bothered enough to accept a new innovation in order to force all the other providers in their sector to step up and do a better job. They can do that by matching the innovation, by implementing one that is equally valuable, by providing an inferior service but at a lower price, or in numerous other ways - but the fact is they have to step up and serve customers or on average over time they will be out of business. This means people don't even need to all be receiving the same service or a one-size-fits-all but it does mean that services that are way behind the times will fall out of favour. Public institutions are not under the same pressure to adapt to the times because people cannot divest from them easily since they are funded through the tax system rather than voluntary contributions that can be withdrawn if the service is poor, and also because they have a relative monopoly on the provision of services in their sector which means that people can't compare their performance to those of competitors who are trying different approaches which may have their own advantages or drawbacks.

People need to have a choice when it comes to services if the quality of services is to increase and not stagnate or fall behind the times. This is not because "ruthless tooth n' nail capitalist competition drives innovation" but simply without the petri-dish of trial and error which is a multitude of entrepreneurs with different information and ideas trying to sell them to a skeptical public there is really no way of discovering the best way of doing things. No one has all the answers, but many people have some of the answers, and by constantly turning over the soil society learns to combine the best ideas and discard the worst ones over time. The soil of government turns very very slowly and that's why innovation in the private sector continues (despite various government restrictions on who can innovate) while public institutions stagnate and become more expensive each year while providing poorer standards to the people.

10 Ways The Profit Motive Drives Sustainability.

Time for some heresy today.

Most people are given to thinking that the profit motive in a capitalist economy can only drive environmental destruction, but I am here to say that the profit motive has been acting as a massive bulwark against the kind of environmental destruction which was seen in the communist nations during the 20th century which far outstripped the damage done to the environment here in the west.

The idea that the desire for profit is ripping apart the environment seems so intuitive that you'd think it were beyond dispute. People take resources from the earth to make products and draw a profit, right?  And because corporations are only motivated by profit they will destroy the environment in pursuit of profit, won't they? Obviously.

Well, this is not the full story, lets investigate what is unseen.

1) A forest, fishery or grazing land is a renewable resource if properly managed. Keeping it in pristine condition will not only preserve (or even increases) the value of the land but will allow the owner to profit from it indefinitely. Laying waste to it for a quick buck would be like slaying a goose which laid golden eggs for a single dinner. This is why loggeries that are privately owned are handled sustainable whereas when land is leased out to firms by the government they usually mistreat the land for short term profit and leave the taxpayer to pick up the tab. Renters don't take as good care of their stuff as owners do.

2) Companies are always trying to decrease the cost of their inputs because the lower their costs of production the higher their margin of profit. This gives firms and active incentive to constantly find innovative ways of stretching the same amount of resources further. An example of this, often cited, is that Coca Cola have made their cans thinner than they used to be. There must be dozens of others. There is no comparable incentive to save resources by decreasing inputs in a centrally planned economy.

3) Those with the knowledge of how to stretch limited resources the furthest are the most likely to acquire them on a free market because they are able to pay more to acquire them owing to their larger projected profit. This will broadly lead to copper mines and oil wells ending up in the hands of the most competent custodians; so long as the state is not in charge of who gets what, a more competent owner will be able to buy-out a less competent owner.

4) On a free market the price system values resource inputs in proportion to how scarce they are and how many people want to use them. Therefore the most environmentally friendly way to produce something also becomes the cheapest. As resources become more scare the laws of supply and demand push the price of those resources up driving innovation to find alternatives and use those which are still left better - the best alternative being a renewable alternative. There is no comparable defense against the overuse of resources under socialism where the central planners can continue to dish out the goods to cronies long after they have become scarce. (In fact the only defense against this is the potential killing the central planners can make by selling those scarce resources to capitalist economies that actually have a price system.)

6) On a free market the mechanism of profit and loss minimises the production of goods and services that no one wants limiting waste. In a planned economy central planners have to best-guess what people will want. They will often guess wrong and lots of production will simply go to waste.

7) Because consumers have to choose what products to buy with their limited resources on the free market they have to be discerning. Products that are more intensive in resource use are more expensive, meaning someone who buys them has less to spend on something else. Because resources are held privately rather than in common there is no "tragedy of the commons" where everyone has the incentive to take as much as they can in the short term to stop other people from taking it first.

8) On a free market, much of what we consider waste could be considered a free resource to one entrepreneur or another. Food waste could be slop for livestock; aluminium and tin cans, glass bottles, and many electronics can be reused. Were there a market in trash disposal, rather than central planning, people would be charged for waste in proportion to how expensive that waste was to dispose of. Perhaps they would even be remunerated for waste to the extent that that waste could be reused. The companies who were most effective at recycling and reprocessing waste in an environmentally friendly way would be able to pay the most to acquire that waste. This would change the whole face of the economy by presenting a massive incentive for companies to make their goods easy to recycle, reuse or repair as consumers faced real financial incentives for choosing sustainable purchases, Non-biodegradable forms of excess packaging and would probably be eliminated as consumers would favour items that they would not be charged for the disposal of. Planned obsolescence would also be heavily discouraged by a system where people had to pay not only the cost of buying goods but disposing of them as well.

9) The profit motive provides an incentive for companies to devise ways to turn their waste into useful biproducts that people can actually use. For example, Standard Oil invented thousands of biproducts such as paraffin wax, lubricating oils, chewing gum, and fertilizer out of resources that other companies were simply wasting. This incentive would also be far more pronounced of a true free market where companies had to pay for waste, not in the abstract, but directly in proportion to how difficult it was to dispose of - and potentially get paid for waste in proportion to how valuable it was to people who could recycle it.

10) The profit motive is constantly driving capitalists to creating innovations which are better for the environment and more sustainable than previous technologies. Memory sticks invented by capitalists have saved billions of trees. A 15 watt fluorescent LED light provides the same luminosity as a 60-watt incandescent bulb. Burgers grown in a lab from cloned meat will be solving our factory farming crises by reducing the massive ecological impact of meat production. The average smart phone has a camera, radio, television, sound recorder, music player, gps, flashlight, board and card games, computer games, video player, maps, encyclopedia, dictionary, thesaurus, access to textbooks, compass, photo album, thermometer, scientific calculator, dematerialising the need for the production of many goods and saving the environment.

A recent innovation in progress designed with the third world in mind is high-tech toilets that burn feces for energy and flash evaporate urine rendering everything sterile. No pipes are required under the floor, no leach field under the lawn, no sewer systems required to run down the block. These may have been invented decades and decades ago had the state not been responsible for getting rid of our sewage; removing the necessity to innovate. Rather than waste anything, these toilets give back packets of urea to be used as fertilizer, table salt, volumes of freshwater, and enough power to charge a mobile phone. If users can sell the energy back into the grid they will literally be being paid to poop!

So, on that note, allow me to end by saying: I’m not shitting you when I say the free market is good for the environment.

There is reams more to say on this topic and I intend to expand upon it in my book The Free Market Hippy. If you would like to be notified when it is finished download my previous book free and you will automatically be informed when it is available.

World Government is possibly The Worst Idea Ever

I was reading some old articles by Bertrand Russell on diverse topics and noticed his persistent urge to advocate the necessity of establishing World Government, even when it bore no relevance to the subject at hand.

Russell, the famous atheist, was a Government-worshiper. He wrote frequently as though Government gave rise to civilization rather than civilization to government, an unfortunately prevalent view to this day. To him it was a given that despite the many abuses that governments have perpetrated against their own people and those of one another (including two world wars in his time) that barbarism was the only alternative. One of the great tricks of government to disguise itself as society, and once the disguise is complete people come to view the achievements of society instead as the achievements of government. The more successes people attribute to government the more of it they will surely call for. Russel called for the ultimate amount - world government.

One of the reasons why most products we buy meet our needs - and reliably so - is that markets allow for a plurality of ideas to be tested against each other and for the best of those to ideas to prevail. People copy ideas and improve on them.  In an environment where there is a minimum of patent laws and monopolistic government regulations, companies can even learn from the best ideas of their competitors and mix them with their own ingenuity to create ever better products as we see in the fast moving tech and software industries. Bad ideas don't last very long, and the consequences of poorly thought out plans and products are limited to some small number of producers and consumers. Meanwhile, successful ideas are proven on the small scale before being adopted more widely, spreading out to the furthest reaches of the earth the way mobile phones are now reaching the world's poorest populations.

On the other hand, when government rolls out a policy they do so across an entire economy, and policy-makers essentially have to make a "best guess" of what will work without any small scale trials, and without any optimisation through a trial and error process with kills bad ideas and allows good ones to be tested on small populations of voluntary consumers before becoming more and more widely adopted through word of mouth. Government edicts are rolled out across the entire nations on the assumption that they will work as planned, but all policies have secondary and tertiary consequences that cannot be easily predicted. When policies go wrong, as they often do, they can have dreadful consequences for million of people or across generations, and often government will be called on to respond to the ensuing crises with another volley of "best guesses" that have not past the litmus test of trial and error by end-user approval. Often the cure in one area turns out to be poison in another.

If there is one saving grace of governments it's that they don't have jurisdictions that extend to the entire planet. As such they have the example of other nations who have tried a multitude policies that have turned out well or poorly (or more realistically poorly or disastrously) which they can learn from the example of. If one country is too regulated industry dies and it must emulate its neighbors. If another has taxes which are too high people will flee next door. Indeed one of the reasons why Switzerland is so successful a nation is that it has a Federalized form of government extending over twenty six Cantons in an area no bigger than Virginia. Because policies that work well in one area can easily be adopted in another, and populations can easily move from one state to another in response to bad ones, their government is relatively benign.

So what are we to make of the calls of great figures such as Albert Einstein, Winston Churchill, H. G. Wells, Mahatma Ghandi, and Russell, all of whom called on governments to proceed further by taking gradual steps towards forming an effectual federal world government? Or those progressives that are ever eager to see this done in the name of preventing the greedy rich from moving their fortunes offshore to avoid paying taxes?

Only that they are grievously optimistic about the benefits which world government may bestow, and woefully naive about its dangers.

Governments grow, and as they do so to does their power and influence. Vested interests are always willing to turn a blind eye to abuses taking place under the watch of those whom they are partisan to. The Right turned a blind eye while Bush sent eroded civil liberties and actively supported his invasions in Iraq and Afghanistan - after jeering Clinton's intervention in Kosovo. Obama, before elected, complained of the expansion of power in the executive branch under Bush, only to spend eight years strengthening the executive branch at the expense of Congress and The Senate. Now the left, who turned a blind eye to this use (or abuse) of executive power protest in horror as the very power they allowed Obama to accumulate has been transferred into the hands of arch-nemesis Trump.

If you want to know how bad an idea World Government is just close your eyes and picture a combination of the most devious, incompetent and glib politicians you have ever seen, and then imagine them secretly forming cohorts to compete for control of that government; because that is precisely what is going to happen should we ever face such bad luck.

Regime Uncertainty

A seductive (if poorly considered) critique of markets is the notion that they are so wildly unpredictable and inherently unstable that we need government to watch over them and intervene to mitigate their excesses. There is a great irony in this position which I will reveal.

Economist John Maynard Keynes (1883 – 1946) made perhaps the most famous case for this view, coining the term "animal spirits" to describe the irrational, impulse-driven whims of market-actors based on arbitrary expectations that could only cause instability. The idea itself seems to make sense because it's hard for intellectuals, who love chewing over ideas and coming up with bright plans, to see how a society could run coherently without a single plan. The truth is, market economies are actually planned - there is just no central plan. What happens on a market is that lots of individuals make little plans to roll out their bright ideas into the through businesses, charities, and other organisations, hoping to influence as many people as possible. The plans which prove successful on the small scale attract resources and grow steadily in their impact. Other planners emulate them and adapt their own plans in light of their success. Meanwhile those plans which prove to be failures never get far off the ground.

This means that, left to their own devices, markets have their own self-correcting mechanisms which Keynes appeared to have overlooked. While in any situation there may be entrepreneurs, investors, and consumers who do indeed make poor or irrational decisions and make mistakes (driven by their animal spirits) there will always be others who succeed as well. The mechanism of profit and loss allocates the pool of available capital to those producers who make good predictions as to what consumers (you and I) want over the long term and reallocate them away from those who use the badly. This limit the scope of damage caused by bad or incompetent decision-makers. Where people fail, the results of those failures will be limited to some small number of people. This can not be said of failures of government which might extend to affecting the entire society.

Now, here's the irony. Even allowing for Keynes his hypothesis that markets are inherently unstable, how can the prospect of intervention by government, at any time, into the economy do anything but make the market more unpredictable and make it more difficult for the "little planners" to make long-term decisions? Over the course of 20 years a government could change 5 or more times. With each change in administration the form of state interventions in the economy can change dramatically, as can the political philosophy driving it. Plans can be added or scrapped at any time. Government can increase or reduce taxes at whim, or increase or decrease spending. They can pass new tariffs, grant subsidies, institute licensing laws and regulations or scrap them. Government-mandated Central Banks (like The Bank of England or The Federal Reserve) can increase or decrease interest rates; expand the money supply or contract it. Plus what makes those calm and virtuous actors themselves immune to the influences of the animal spirits? Do they not too have emotional whims, not to mention voters and campaign contributors to please?

Yes, when the specter of government hangs looming over the economy conditions can rapidly and unpredictably change at any time, in countless ways and this can only exacerbate the problem that the Keynesians plan to solve. Economist Robert Higgs called this the phenomenon of "Regime Uncertainty", where investors fear it may be hard or even impossible to foresee the extent to which future government actions will alter the “rules to the game.” As a result, investors become averse to taking risk (much in the way that Keynes feared they might) not due to a lack of government intervention – but in anticipation of it!

Private investors have "skin in the game." Their own self-interest should motivate them to only take certain risks of personal loss, and investigate all the available information to make robust decisions. But public servants are forever fated to spending other peoples money on other people. The best people at making decisions with money are most likely not in government. They're probably out there in the free market making "Little Plans" to launch a new businesses or product that might one day spread out to the furthest reaches of the earth the way mobile phones are now reaching the world's poorest populations in Africa.

I'm in the process of writing a book called "The Errors of Keynes" if you would like to receive updates about it please grab my free eBook and you will get an update when it's good to go.

That's not real Socialism!

We live in a mixed economy where the state is responsible for almost 50% of the spending in the economy in the UK, and 19% of the population is employed in the public sector. The state controls the money supply, sets the interest rates, and is responsible for regulating each and every facet of the economy from the provision of energy, to the conditions under which someone can employ another person. The state runs the schools, and a great deal of the hospitals. It decides when a road is to be built, and when we are to build a railway. It hands subsidies to tobacco farmers, then taxes the tobacco we smoke. It hands welfare to the wealthy in the form of contracts and preferential legislation, and to the poor in the form of entitlements, free services and food stamps
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There is no part of the society left untouched by the machinations of the state – whether rightly or wrongly – and yet we are told again and again that this is capitalism. The free market at work.

What's more whatever goes right in the economy: the government is responsible for, whatever goes wrong in the economy: capitalism is to blame.

This line of reasoning (if we acquiesce to calling it one) is at its most flagrant when people on the far-left attempt, shamelessly, to redefine the nature of regimes which were heretofore ubiquitously considered and described as communist – The Soviet Union, China, Cuba – as not socialistic, but in fact examples of “state-capitalism.” The underlying message is clear: Whatever we don’t want is capitalism, and whatever we want do want is socialism. And so it necessarily follows that no socialistic regime can ever really be bad, because if is woefully inefficient, or it yields tremendous abuses, or the people starve, we simply redefine it as some form of capitalistic one. What is more the philosophical doctrine of socialism narrowly escapes condemnation like a slippery frog.

By this trick the socialistic ideology becomes an unfalsifiable doctrine which is immune to any rational discourse or examination. An idee fixe. Whenever it fails in reality, it is “not real socialism.” Equally is it immune to the puncturing incision of factual evidence such as the inconvenient truth that throughout history the nations that are the most free economically thrive, while the nations that are the least free economically flounder. Socialism is good qua definition and thus consequently can never be abandoned as a doctrinal goal in light of the facts.

"The More of the Economy they Socialise, The More they Complain:

Capitalism Isn't Working!"

- Nathan Fraser

Libertarians don't have any solid plans

Recently, after quizzing me on how x, y and z would be achieved without Government intervention, a socialist told me that "All of the libertarians politics is based on "if and but" no real solid plan."

I said I can see why it might look like that but it's not really accurate. On reflection maybe he's right.

People often ask how various services would be provided if not for government, and often the best answer I can provide sounds something along the lines of, "perhaps it would be done like this, or like that, but it just depends on what people want; these are just my suggestions, experts would probably come up with better ideas, those would get tried out, improved upon, and the best ideas would win out over time."

That's admittedly, not a very solid plan. But we are really  skeptical about people with "solid plans."

Because if you have a solid plan you basically think you are a genius and can run the whole society so long as your plan gets implemented. That you have better ideas than the entire combined intelligence of society working to test potential solutions on the small scale and through trial and error, rather than complete a priori calculation, allow the best ideas to be optimised and prevail. 

We actually believe that the community as a whole has far better methods for reaching good ideas than anyone with a "solid plan" can ever achieve. We see the progress of society as working like a sieve for good ideas, bad ideas get weeded out and good ideas get more widely adopted and rolled out and improved upon.

Solid plans, on the other hand, are very inflexible.

If you ask a Socialist, "what do you think the policy should be on x," they almost always have one, and they almost never have the same exact policy as one another. They have fervent debates over which policies should be implemented (for the whole society) under socialism, not stopping to consider how autocratic this all is.

We don't like to impose our "solid plans" on other people - we like to let them choose which plans they think suit them best and learn from their own mistakes. We would rather a thousand plans were tried all at once. Some of those plans might turn out to be bad: a waste of time, money, and resources, but at least only a small number of people will be affected by then. (If the stakes are high enough people can choose to get insurance against a plan going wrong.) On the other hand you might have a solid plan that sounds great on paper but when you try it out it turns out to be terrible. On a free market when that happens the bad plan goes out of business, but if the government has implemented that plan over the entire nation the results can be disastrous.

When many flowers bloom, good ideas become adopted more widely, and as they do they can be tweaked and upgraded because there is not yet a massive infrastructure churning out that plan for everyone in the country. The infrastructure around an idea builds as it becomes more popular meaning that if a product is good but could be better new versions can come out before everyone is issued with the first version.

To illustrate the importance of this point, lets suppose some politician with good intentions decides to invest billions of public money subsidising a new solar panel roofing product which he believes in, and tens of thousands jump to the opportunity to get them cheaper. Three years later another company invents a new solar product that is 20% cheaper more efficient. Those public funds have just been wasted on an inferior product due to someone's solid plan. It would have been better if a smaller number of people bought the inferior solar paneling, and a larger number waited until the new model emerged. These things are too unpredictable for central planners to account for and so the market is the best arbitrator of how soon and by how many people new ideas are adopted.

Libertarianism is essentially about the humility to know that you don't know. No one does. No individual knows better than the combined genius of the entire society testing out products and services created by the best designers each particular field. Making those experts in charge of running their field is no solution either. They might have good information about potential advances in their particular area of expertise, but they don't have the knowledge of everyone's needs, wants and preferences which are constantly changing in real time, neither can they have knowledge of future advances, or knowledge of how every element of their ideas may work out in the real world once tried, or which elements could be tweaked and re-optimised. They can't possibly have all the economic, social, political, historical, etc, etc., etc. knowledge from all possible other fields to make sure that their dictates run smoothly, or that they are the best dictates that could be dictated.

So if libertarians don't have any solid plans, thank goodness for that. At least no one is trying to plan your life for you. Our solutions are simple, if you get the incentive structure right for solutions to flourish then the best solutions will win out over time and the rest will fall into place. It's not a perfect system owing to human error, but it's a self-correcting system where the consequence of bad decisions are limited and lead to better decisions in future. That's the most important thing.

A. S. 10/12/16

If you liked this article you will also benefit from reading Economics is Elegant! (not boring).

Economics is Elegant! (not boring)

The Market for Elegance

There is a tendency for intellectuals to believe in big government because it gives their intellect a role in planning society. It’s hard for them to conceive that million of decisions taken by individual actors may outperform their own intelligence or the intelligence of mandated “experts” but in reality it has and always will, and for logical reasons.

Nobel Prize winning economist F. A. Hayek explained that no one has the information to centrally plan an economy – and even if they did, this information is constantly changing in real time. People’s behaviours, values, preferences, ideas, expectations and knowledge change constantly and in unpredictable ways (thankfully so lest we be reduced to a bunch of deterministic automatons!) The information required to plan an economy is distributed amongst us all – and it is expressed in every transaction we make or choose not to make. Every time we decide something is too expensive, every time we buy something that is on sale because we only find it worth the cost at the reduced price. What we choose to buy is about as accurate a representation of what we value as we are likely to devise (apart from perhaps the way we choose to spend our time and attention) because each buy is at the expense of everything and anything else we could choose to buy with the same limited resource. It’s a measure of what we value in our particular circumstances.

It’s the interplay of countless actors trying products and services, rating them, deciding whether or not they want to buy them again, recommending them, cautioning others against them, which enables producers to know – without even talking to the vast majority of their customers – what exactly is desired and what is not. We are constantly giving out signals to producers of what to produce, in what quantity, limiting waste through overproduction and preventing shortages. This leads to approximately the right goods being produced in approximately the right quantities approximately all of the time. It also limits waste as goods that no one wants will not be in production for long, those that have been produced already will fall in price ending up in the bargain bin until someone finds them a home. This accounts for why in planned economies there are always mass shortages of some goods and wasteful overproduction of others.

Of course there will always be some Maverick or hard-headed producers that completely ignore all these signals and just do what they want, (Henry Ford, “If I had asked people what they wanted, they would have said faster horses.”) but they will not be in production for long to waste resources unless they really do know better than their customers. 

This is just evidence that human knowledge is not perfect. Consumers don’t always make the best choices first time – how could they? But they are unlikely to make the same bad purchase a second time. When they do err, the consequences of bad decisions are usually limited to some small number of people. On the other hand, when government policy-makers or central planners step in to make decisions over the entire economy, a poor choice can affect millions.

It’s this idea of one-size-fits-all – the customary approach of government – which is exactly what we need to combat, because it relies on the assumption of perfect knowledge (a priori) on the part of a small qualified number, which can only be gained by the individual experience huge amounts of individuals (a posteriori). Occasionally an inferior product, a VHS, will outperform a superior one, a Betamax, but ultimately DVD will come along and outperform both. The market acts like a sieve for good ideas, leaving bad ones behind.

It’s a wonder that so many fail to grasp the beauty and elegance of this self-correcting system of interdependence.


A. S. 11/2016

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