"…. is from Kevin Williamson writing in National Review (emphasis added):
For both its admirers and its detractors, the critical feature of capitalism is its competitiveness. For the admirers of capitalism, that is what makes it efficient, ensuring that the interests of large and powerful firms must in the end be roughly aligned with the interests of ordinary consumers, who in the aggregate have much, much more power than any individual company. Thus the economic might of Nike and Walmart and the innovative genius of Apple are bent in the interest of ordinary people, even poor people, who in spite of their limited means have the ability to choose Reebok or Target or Samsung instead. For the critics of capitalism — people who, not coincidentally, helped make monopoly the default model for utility companies — that competition encourages waste and incentivizes bad behavior.MP: Like the English language…. no one is in charge of it either, thanks to the miraculous power of spontaneous order."
Properly understood, competition within markets is only a mechanism by which the actual preferences of consumers and investors are revealed. Revealing preferences, as opposed to simply asking consumers about them, is critical, in no small part because consumers never tell the truth about their preferences when asked. When consumers and investors have their own money on the line, we discover what it is that they actually value. We can, in fact, see the gradations in comparative valuations in some detail.
What is truly remarkable about 21st-century capitalism is not the competition — creatures that aren’t even quite sentient, like catfish, snails, and members of Congress, compete over scarce resources, too — but its cooperation. Every time you buy a T-shirt or a fast-food hamburger, you tap into a vast network of productive resources involving everything from agriculture to information science to logistics, millions of people who do not know one other — who, if they did, might even hate each other — cooperating in relationships of literally incalculable complexity, in the service of ordinary schmucks like us.
And there is one remarkable aspect of all that to keep in mind: No one is in charge of it.
Wednesday, October 12, 2016
Competition, Revealed Preference, Spontaneous Order And Cooperation
See Quotation of the day on capitalism, consumer sovereignty, cooperation, and spontaneous order from Mark Perry.