Friday, March 6, 2009

Hayekian Insight of the Day

It belongs to Joel West at Seeking Alpha:
One of the key lessons from Steverman’s interviews was that uncertainty increases risk, which discourages buying. However, what Steverman doesn’t say is that highly interventionist government policies by their nature increase uncertainty, due to the inevitable arbitrariness and risk of political capture.

One elected politician (with a four-year term) or nine unelected judges with life tenure do not have the same self-correcting feedback loop of hundreds of companies competing in the marketplace every day, or millions of private investors in the stock market. That’s why centrally planned economies (even democratic socialists) will never be as effective as free markets in producing and allocating wealth.
Now that's music to my ears....

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