{"id":2156,"date":"2009-12-16T09:24:03","date_gmt":"2009-12-16T13:24:03","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=2156"},"modified":"2009-12-16T10:29:15","modified_gmt":"2009-12-16T14:29:15","slug":"qotd-the-importance-of-markets","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2009\/12\/16\/qotd-the-importance-of-markets\/","title":{"rendered":"QotD: The importance of markets"},"content":{"rendered":"
\n

America debated three strategies during the Cold War. The Right wanted \u201croll back\u201d — dreams of Patton driving his tank into Red Square. The Left wanted d\u00e9tente — which is French for \u201csurrender.\u201d The country loosely followed containment, a program outlined by George Kennan in 1946, which argued that the political contradictions of the Soviet state would eventually cause its own demise. America had but to be patient.<\/p>\n

Kennan may have been the first to realize that a society based on Communism would not survive politically, but it was Ludwig von Mises, in his 1922 work Socialism<\/em>, who demonstrated that any such society could not survive economically.<\/p>\n

When a collection of free individuals — the market — is willing to pay a price for a product that creates \u201cexcess\u201d profits, it signals producers to provide more of that product. If the market does not support a given price, producers are forced to redeploy their assets for more pressing social needs. Similarly, if a factor of production, such as labor or capital, changes in price, producers instantly react, sending signals — through the prices of intermediate goods — down to the consumer. Prices effortlessly allocate society\u2019s assets to reflect consumer preference and adjust to accommodate the ever-changing availability of scarce resources.<\/p>\n

Mises argued that governmental interference in prices, through taxation, subsidies, and regulation, complicates this process — affecting not only the consumption of final goods, but also the economic calculations that are necessary to provide intermediate goods and services. Higher-order division of labor fails. Poverty results. For example, while Chinese and Russian central planners were busy setting quotas for steel mills, there was no method for consumers to signal that they preferred food — and millions starved to death.<\/p>\n

Dan Oliver Jr., “Socialism in Stages: Even soft, incremental expansions of government produce poverty”, National Review<\/em><\/a>, 2009-12-15<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

America debated three strategies during the Cold War. The Right wanted \u201croll back\u201d — dreams of Patton driving his tank into Red Square. The Left wanted d\u00e9tente — which is French for \u201csurrender.\u201d The country loosely followed containment, a program outlined by George Kennan in 1946, which argued that the political contradictions of the Soviet […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,7,41],"tags":[108,320,441,433],"class_list":["post-2156","post","type-post","status-publish","format-standard","hentry","category-economics","category-history","category-quotations","tag-coldwar","tag-freetrade","tag-marketsineverything","tag-sovietunion"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-yM","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/2156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=2156"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/2156\/revisions"}],"predecessor-version":[{"id":2157,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/2156\/revisions\/2157"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=2156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=2156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=2156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}