One of my favorite economic quotes

This is from a footnote in Robert L. Heilbroner’s “The Nature and Logic of Capitalism.” It’s a bit convoluted, but bear with it:

I cannot resist adding an example of the modern use of economics as a system of clarificatory belief.

Thomas Schelling writes: “[T]he free market may not do much, or anything, to distribute opportunities and resources among people the way you and I might like them distributed…; it may encourage individualistic rather than group values. It may lead to assymentrial personal relationships between employee and employer….The market may even perform disastrously when inflation and depression are concerned. Still, within these serious limitations, it does remarkably well in coordinating or harmonizing or integrating the effects of…individuals and organizations” (Micromotives and Macrobehavior [New York: W.W. Norton, 1978]), pg. 23.

Schelling is by no means a bland “apologist” for the market system. Note, however, that the market is given its ultimate blessing on terms that excuse a maldistribution of opportunities and resources, unsocial values, unequal bargaining power, and perhaps “disastrous” performance during inflation or depression.
One is tempted to ask by what criteria the system would be deemed a failure.

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