Monday, August 1, 2016

Railroading Prices

Seven, that's the time we leave, at seven
I'll be waiting up for heaven
Counting every mile of railroad track
That takes me back
--Doris Day

Nice video here that demonstrates the value of market prices in efficiently allocating economic resources and the futility of seeking to 'plan' an economy without prices.

Central planners suffer from what Hayek termed the 'fatal conceit.' They believe that they can know what is in the minds of millions rather than rely on market prices that instantly and everywhere reflect that diverse knowledge.

This hubris drives centrally planned economies to chaos.

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