This one is hauled from the archives from Aug 2013. Bhagwati on Democracy and Markets. In that post I quote Bhagwati’s three broad lessons that arise from his typology of countries into a democracy-market space. Continue reading
Markets work. That’s the “First Law” of the Extended Order of Social Interactions. I just made up that EOoSI bit but the ‘markets work’ bit is a genuine law in the sense that it expresses an observed regularity in human societies.
What does it mean? Among other things, it means that when the need (the demand) for something arises, the market spontaneously figures out a solution (the supply) without the need for some controlling authority passing orders to get that need met. Those who address the needs of people are sometimes referred to as entrepreneurs. These are the people who look around for unmet needs and figure out some way of meeting those needs.
English philosopher, biologist, anthropologist, sociologist, and prominent classical liberal political theorist of the Victorian era, Herbert Spencer (1820-1903) wrote this in “The Man versus the State” (1884).