The Ugly Market: Why Capitalism Is Hated; I. Kirzner

Those who have pierced the shrouds of hate and ignorance with which the critics of the market have enveloped it, inevita bly come to ask themselves why so valuable a social institution is held in such universal contempt and dislike. The question is one which has a scientific fascination of its own. But· the question has significance extending far beyond mere scientific curiosity. As Mises pointed out, "A social system, however beneficial, cannot work if it is not supported by public opin ion."l Those who are convinced that the market· system is uniquely capable of mobilizing and devel724 oping the resources available to a society in a manner able most faithfully to reflect the wishes of its· members, while it protects and nourishes their political and eco nomic ·liberties, have for a long time been aware of the unfortu nate validity of this statement. The ability of the market to serve society has been and is continu ally being undermined by the at tacks levelled by its ideological opponents and by the powerless ness of the public to withstand these attacks. Public opinion has come to be moulded in a direction overwhelmingly antithetical to a market orientation. The "anti capitalist mentality" has come to pervade the thinking of the masses who are the market's chief bene ficiaries, of the intellectuals and social scientists who might have been expected to be its principal Dr. Kirzner is professor of economics at New York University. He is the author of numerous articles and books, the latter including The Economic Point 0/ View, Market Theory and the Price System, and, most recently,Compe tition and Entrepreneurship.

1974 THE UGLY MARKET .•. 725 interpreters and exponents, as well as of the entrepreneurs and business leaders who constitute its pivotal instrumen ts. It is surely a tribute to the extraordi nary vitality and power of the market system that in the face of such deep mistrust, and in the teeth of massive and well-nigh crippling state interventions (de riving largely from this anti capitalist mentality), the system still continues to support anenor mously complex division of labor and to generate an unprecedented ly high flow of goods and services. How long this can be continued in the face of widespread lack of confidence in the efficiency and morali ty of the system, must seri·· ously trouble those concerned for the very survival of the system. An understanding of the nature and sources of this anticapitalist mentality is, therefore, crucially important. If this mentality is to be dispelled, its principal features must be clearly pointed out, and its sources identified. A number of scholars have addressed them·· selves to this task. A series of papers by various writers was published under the editorship of Hayek two decades ago,2 drawing attention to the anticapitalist bias of historians, and relating this to the hostili ty towards the ear ly emergence of capitalism in the eighteenth and nineteenth centuries evinced at the time by the aristocracy and the intellectuals~ Almost four decades ago Hutt3 brilliantly analyzed the causes, not so much of the existence of the anticapitalist mentality itself, as of the surprising inability of the economists to influence public opin ion towards an appreciation of the beneficent operation of the com petitive market process .. More re cently both Mises 4 and Stigler 5 have sought to explain the emer gence of the strong antipathies shown towards the market system by so many,. including the intellec tuals who might have been ex pected to be its most enthusiastic supporters. Historians of economic thought have, and no doubt will, chart the vagaries in the attitudes of economists themselves towards the social usefulness of a decen tralized system of decision-making based on private property.

The following discussion of the anticapitalist mentality will at tempt to identify three distinct levels at which this mentality de mands analysis: First, we will notice the objections explicitly raised by the critics of capitalism. It is through these charges, criti cisms and denunciations that the anticapitalist mentality finds overt expression. Second, we will identify the;; analytical premises which inform (or misinform) the stated criticisms expressive of the 726 THE FREEMAN December anticapitalist mentality. Any at tempt to respond to the criticism raised at the first level must sooner or later search out the weaknesses of the analytical bases - at the second level-for these criticisms. Third, we will take note of the deeper. attitudes which haye in spired the various forms of anti capitalist mentality. Whatever the stated, specific denunciations of capitalism, whatever the errors in economic analysis which are im plicit in these denunciations, a thorough understandng of the anticapitalist mentality cannot avoid ultimately coming to grips with the deep-seated prejudices and engrained habits of thought which are,' both consciously and unconsciously, resp?nsible for the antipathy shown to the market system. We will now take up in turn the three levels which we have identified.

The Stated Criticisms The list of denunciations of the market system is both well-known and long. They range from those which condemn the system on moral grounds to those which attack it on more narrowly eco nomic grounds. We will make no attempt to do more than merely recite this list. It is not our main purpose here to grapple with these criticisms. Rather we .list them to indicate the range of expression ..of the anticapitalist mentality, and more importantly, to distin guish these stated criticisms sharply from their theoretical un;.. derpinnings, and from the un stated attitudes to which they are, in large measure, to be ascribed. The market system is indicted as feeding and responsible for the mat eri,alistic aspects of modern society. It is blamed as promoting and permitting the expression of selfishness and greed. It is charged with enc'ouraging fraudulent be havior. It is denounced a8 debas ing the tastes of the public through advertising, fraudulent or otherwise, leading them to de mand products and services which are in fact harmful and degener ating. The system is held account able for the destruc'tion of the environment. It is denounced for destroying the self-esteem of its workers, for generating profound alienation, despondency and de spair within society, as well as for widespread insecurity and anxie ties. The inequality in incomes which characterizes capitalist countries is denounced as evil in itself and socially deleterious in its consequences. This inequality is: condemned as exemplifying the fundamental injustice of the mar ket system; it is perceived as expressive of economic oppression and exploitation. The market sys tem is made to shoulder responsi1974 THEUGLY·MARKET .•. 727 bility for racism, for sexism, for imperialism. The market is given failing grades in its strictly eco,· nomic functions. It is seen as producing shoddy, dangerous prod ucts, for the profit of the business manra,ther than for the use of the consumer. It is seen as generating cataclysmic spasms of overpro duction,unemployment and mone tary crisis. It is seen as subverting the operation of political democ racy. It is blamed for thecorrup tion of government and for the concentrations of dangerous c'en ters of economic power in big business.

No doubt this list is an incom plete one. But it does present the range of anticapitalist cliches with which we are all familiar. Sooner or later the anticapitalist mentality expresses itself in one or several of these charges, de nunciations and criticisms. ~efore reviewing the theoreti cal bases for these criticisms, it is important that one observation be made. This is that while in most cases, these denunciations can be sustained only in the context of particular theoretical views (so that the revelation of fallacies in these views renders these objec tions harmless) the objections themselves are usually raised without benefit of any explicit theoretical framework. An unde sirable aspect of capitalist reality is observed, whether it is the prevalence of fraud or unemploy ment, or racism, or greed. This aspect is then uncritically attrib uted to capitalism itself. The cir cumstance that, in the nature of things, undesirable :features of capitalist reality - or, for that matter of any reality - abound, must in some measure account for the continual reappearance of old denunciations of capitalism in new guises despite their earlier refutations.

Anti~Capitalist Theory The Stigler-Zweig Thesis We now turn then, to examine the theoretical bases which nour ish the overt denunciations of the market system listed in the pre ceding section. In this we confine ourselves to those (often merely implicit) views of anticapitalists which seem most. clearly vulnera ble to critical scrutiny. It is not, to repeat, our purpose here sub stantively to deal with the objec tions listed in the preceding section. Nor, in fact, do we neces sarily maintain that each and everyone of these objections is entirely· without force. But in ex amining the analytical "vision" expressed by the anticapitalist mentality, we find it expedient to draw· attention only to those as pects of it Which, we believe, dis passionate consideration reveals to 728 THE FREEMAN December be flawed. In fact our purpose in setting forth the theoretical un derpinnings of anticapitalism is to illustrate what may be termed the Stigler-Zweig thesis.

This thesis is that the tradi tional training of the professional economist predisposes him towards a free enterprise view on' eco nomic affairs. This thesis has sup port from more than one quarter within the ideological spectrum. In a well-known paper a dozen years ago, Stigler advanced this thesis: "the professional study of economics makes one politically conservative," (with a "conserva tive" defined as one "who wishes most economic activity to be con ducted by private enterprise, and who believes that abuses of private power will usually be' checked, and incitements to efficiency and prog ress usually provided, by the forces of competition.") 6 More recently Michael Zweig has ex pressed, on behalf of the New Left, the similar view long held by socialist critics of orthodox eco nomics: that marginalist analysis (with which orthodox economics is held to be completely identified) is not only "irrelevant," but that it can be "pernicious," so that "mar ginalism is fundamentally counter revolutionary."7 In an essay in troducing a volume of readings which includes many contribu tionsfrom both the New and Old ~eft, Lekachman, too, has reg istered his opinion that marginal ism is "a highly conservative notion."8 Our survey of the theoretical groundwork of the anticapitalist mentality will confirm this thesis.

We will discover, that is, that this theoretical vision is inconsistent (to say the least) with that which underlies economic analysis. So that this level of discussion of the anticapitalist mentality must per ceive it, as Mises has insisted again and again, as the denial of eC'onomic science. It is to be observed that the Stigler-Zweig thesis, or a variant of it, is relevant not only to the theoretical bases for these anti capitalist objections which are strictly economic in character, but also to those which underlie the denunciations concerned with the morality of the market system. The habits of thought engendered by economic analysis enable one to avoid ethical judgments which are mutually inconsistent or which otherwise rest on logically· invalid foundations. If the preceding section con sisted of a list of well-worn de nunciations of capitalism, the fol lowing' pages will turn out to offer a catalogue of those fallacies which teachers of introductory economic theory find themselves again and again forced to unmask.

1974 THE UGLY MARKET ••. 729 (a) One man's gain must be another's l088: Innocence of eco nomics is often most clearly man ifested by the refusal to recognize that free exchange must have been viewed as (at least prospec tively) beneficial by both sides to the deal. The error of insisting that gain in the market must be at someone else's expense is re sponsible for a wide range of de nunciations of the market. These include charges of exploitation of sellers by buyers (as in the case of labor), and of exploitation of buyers by sellers (as in the case of landlord relations). This error is responsible for the perennial willingness of critics of capitalism to prohibit exchanges in which they perceive one of the parties to be receiving inordinate benefit. The error is, further, one of the foundations for the condemnation of profits in general, and thus of the entire market system insofar as it is the social manifestation of the profit motive.

(b) Blaming the waiter for obesity: Failure to perceive the degree to which the notion of con sumer sovereignty manifests it self in the market is responsible for what Stigler has called blam ing the waiter for obesity. In the most naive forms of this fallacy, the market system is condemned for the efficiency and abundance with which it ministers to con sumer tastes which the critic does not share. To a large degree the condemnation of capitalism for "materialism" reflects this aberra tion. (One recalls that not only the market has been condemned for its materialism, but economists have been denounced for their interest in such a debased topic as the material side of human ex istence.) To some degree the con demnation of business for produc ing shoddy or dangerous prod ucts reflects a failure to understand that consumers are simply un willing to sacrifice as much as would be necessary to enj oy a higher level of quality and safety.

There can be no doubt that current denunciations of capitalism for its effect upon the environment must, to some extent, be seen as reflect ing a value placed upon the qual ity of the environment which is higher than that placed by con sumers in general. To a certain extent, the charges of racism and sexism levelled against capitalism are expressive of the same blindness towards the direction in which causes and ef fects are related in the market process. At somewhat less naive levels of discussion, the "blaming the' waiter for obesity" fallacy re surfaces as an attack on advertis ing and selling effort in general. If it is not the, waiter himself 730 THE FREEMAN December who is to be the culprit, it is .the neon sign outside the restaurant, or the tempting aroma of good food escaping therefrom, which are perceived as the villains. It is perhaps because elementary eco nomics in fact generally fails to make clear the role of selling ef fort in the entrepreneurial process of seeking to serve the market, that this particular form of the obesity fallacy is advanced so triumphantly by economists who ought to know '.' het~er.

(c) Petulance at Costs (or the denial of scarcity) :To a surpris ing extent the criticisms of anti capitalists turn out to' reflect merely an impatience at the costs inevitably associated with the achievement of desired goals. Again and again undesirable fea tures. of the economic landsc.ape are cited as evidence of the failure of the market. (Incidentally, the same fallacy is, to be sure, often committed in the course of pro capitalist criticisms of socialist economies.) Here it is not so much that the critic ignores or disagrees with the values of consumers, as that he simply refuses to recog nize that efficiency in achieving more highly valued goals may ne cessitate the deliberate renuncia tion .of otherwise important goals which happen to be less' urgently valued. Long working hours, poor working' conditions, loss of pris tine environmental beauty may, elementary economics teaches us, be evidence not of the failure of the economic system (whether capitalist or socialist) to achieve its goals, but of the very efficiency with which it channels resources away from less crucial goals to wards those more highly valued.

Some aspects of what the critics deplore as worker alienation, or of. the anxiety and insecurity felt by market participants, would surely be appraised rather differ ently were they r.ecognized as the inevitable costs of division of la bor or of.a social system in which freedom. of entry for competitors is the prime motive force. At a somewhat more subtle level, the often deplored garishness and pervasiveness of modern advertis ing take on a different aspect when perceived as a social cost made necessary by the sheer mul titude of products from which the consumer in successful capitalism must choose. The very affluence of capitalism, it turns out, reveals a new guise in which scarcity mani fests itself - the scarcity of infor mation on what to consume out of the available riches. Anticapital ist critics - it turns out - are ill equipped to perceive these insights of elementary economics ..

(d) The fear of ana.rchy: As 1974 THE UGLY MARKET ... 731 Hayek has repeatedly pointed out, one of the cliches of our age sees a blemish in anything that "is not consciously directed as a whole," that this is a "proof of its irrationality and of the need completely to replace it by a delib-, erately designed mechanism."9 In particular, this fallacy .is re-· lated to "the inability, caused by the lack of' a compositive theory of social phenomena, to grasp how the independent action of many men can produce coherent wholes, persistent structures of relationships which serve impor·· tanthuman purposes without hav~ ing been designed for that end."Io There can be no doubt that this "lack of compositive theory' of so cial phenomena" is the view un·· derlying an enormous volume of anticapitalist criticism. The anti·· capitalist mentality, it is clear, is to a great extent,coextensive with ignorance of, or a refusal to acknowledge, the insights· into the market system which economic8 theory reveals. Once it is taken for granted that a society un planned from the top must gen erate incessant chaos, it become8 easy enough to seize on targets th:lt m:lY he held to exemplify that chaos. Even where critics of capitalism .recognize the deter minateness·· of market forces,' they see them as nonetheless chaotic in the sense that these forces; 'are believed to lead in socially undesir able directions.

(e) Fear of the consequences of greed: Closely related to the pre ceding analytical prej udice is that which tends to attribute un desirable consequences to the mar ket simply because the market permits greedy or selfish individ uals to act out their impulses. Be cause freedom to trade means freedom to act greedily or selfish ly, it is believed the consequences of laissez-faire must inevitably tend to be nasty, brutish and jun gle-like. What is being implicitly denied. in this respect is the abil ity of the market process to har ness' the greed of its participants so as·. to serve the wishes of the other participants. Refusal to per ceive the constraints upon individ.;. ual. actions imposed by the market permitsanti--capitalists to inter pret those aspects of theeconom ics landscape which they ·deplore as the only-to-be-expected, sinister consequences of asocial system based on selfishness and greed.

(f) Blaming, the m,arket for the results of intervention: As is well known,.'.the market system. is ire.;. quently criticized for features of contemporary economic society which are,' in fact, to be' attrib uted to state interference with the market. .Of course, to the extent 732 THE FREEMAN December that it is contemporary capitalism which is being attacked, there can be no objection to this. However, such criticisms of capitalism, it all too frequently turns out, are in fact deployed to attack not the statist interference with the mar ket process, but the market system itself. We have here a simple ana lytical failure to recognize, within the complex tangle of modern cap italism, the consequences of its market elements, from those of nonmarket admixtures. This ana lytical failure manifests itself in many of those objections to capi talism which relate to absence of competition generated by govern ment-imposed barriers to entry (or from limitations on interna tional trade), or to maladjust ments arising from government price controls of various kinds or to cyclical maladjustments (in cluding large-scale unemployment) generated by massive government monetary expansion. In all such criticisms, what is at issue is the theory maintained (perhaps im plicitly) by the critics that the un desirable features being exposed are to be attributed, not to depar tures from the market, but to the untrammeled workings of the market process itself.

(g) The HNirvana Falla,cy": As the final entry in our (doubtless incomplete) list of analytical fallacies, we present what Professor Demsetz has labeled the "Nirvana Approach."ll (In fact we will pre sent it in a somewhat broader con text than that identified by Dem setz). Demsetz explains that "those who adopt the Nirvana viewpoint seek to discover dis crepancies between the ideal and the real and if discrepancies are found, they deduce that the real is inefficient."12 There can be no doubt that many critics of capital ism are judging its efficiency and/ or morality by comparison with some ideal norm that can have little relevance for real problems. In so doing they overlook the fact that improving an imperfect world must take place against the back ground of that imperfect world; that it is usually simply impos sible to remake whole systems in their entirety; that even where this is possible, the costs of doing so may make imperfection rela tively attractive and efficient.

The nirvana attitude of many anticapitalists manifests itself in various ways. Thus the market is frequently blamed for the distri bution of incomes to which it gives rise without regard to the circum stance that the market presup poses some initial distribution of resource ownership (especially in regard to the resources embodied in human beings themselves). Or, where marginal analysis is indict1974 THE UGLY MARKET ... 733 ed for accepting without chal lenge the institutional structure (including the existing property rights system) within which mar ginal adjustments are contem-· plated to be made, there is no awareness on the part of the cri t-· ics, of the costs (transaction and policing) of remaking the social system from the very foundations. Or, again, as Demsetz has shown, critics who have pointed to ex·· ternalities or other circumstances spelling inefficiency, have fre quently ignored, in their calcula-· tions, the cost of resources that would be required to correct these inefficiencies.

The Sources of the AntiCapitalist Mentality Our survey of anticapitalist criticisms of the market, and our identification of the analytical confusions which have frequently supported these criticisms make it of special interest to review now the underlying psychological attitudes and prejudices which might fuel this mentality. The very recognition of the confusions which abound in the theoretical underpinnings for so much anti capitalist criticism, make it clear that such criticism must be nour ished by deeply held values and prejudices. The literature cited earlier in this paper, together with several additional sources, yield the following inventory of attitudes from which anticapital ism might easily be expected to spring. (a) Mises has dwelt at length on the resentments which can arise from frustrated ambitions, of the envy on the part of the intellectuals and the white collar workers of the good fortunes en joyed by successful entrepreneurs.

(b) Similar in important re spects must be judged the wide spread views that economic in equalities are somehow immoral and seriously undesirable per see Here the often vicarious envy of the wealthy and sympathy for the poor must be judged as predispos ing observers of capitalist inequal ities towards "sinister" interpre tations of the sources of these inequalities. (c) Deep-seated contempt for greed and for self-centered activ ities is clearly responsible for a readiness to believe the t worst about capitalism. I3 (d) An almost similarly deep seated contempt for the low tastes of the masses and thus for the businessmen who cater to these low tastes is responsible for treat ing the market as vulgar and crass. It becomes, in fact, all the easier to blame the vulgarity of mass tastes upon the: businessmen who minister to them. (e) Closely related to high-brow 734 THE FREEMAN December disdain of mass tastes, must be listed man's love for the natural over the artificial, his pr,eference for more spaciousness and sim plicity over urban congestion and complexity. Since the spectacular success of industrial capitalism was accompanied by the loss of the simple,natural .life for which so many of us yearn, capitalism itself has come to be the villain. 14 (f) And again, the yearning for simplicity abuts on the deep rooted unwillingness of men to be forced to be efficient. Modern cap italism is despised and feared be cause it successfully mobilizes available resources to serve soci ally needed purposes.

(g) Widespread fear of eco nomic power must be considered one of the attitudes responsible for anticapitalism. While what Professor Petro has recently called the "economic power syndrome"15 is often accompanied by an ex plicit theoretical position which denies the role of consumer sov ereignty, .it seems clear that in many instances the syndrome in fact precedes the theoretical posi;. tion needed to support it. Thus the very success of' capitalism in or ganizing production in efficient, large scale productive units is responsible in fact for the sus'pi cionswhich have led to its being so bitterly attacked. (h) Frofessor Hutt has pointed out that opponents of economics are often the victims· of what he calls "custom-thought"16...;... intel lectual inertness. To be sure cus tom-thought may work in more than one direction. But the long list in the preceding section of this paper of economic fallacies sub scribed to by anticapitalists sug gests that intellectual inertness might indeed playa notinsignifi cant role in the anticapitalist mentality.

(i) Finally we notice, as an ex.., planation for the persistence of so many elementary fallacies, the role of the "corruption .' of opinion by interest." Professor Hutt 17 has provided a full review of the role of "power thought" in this re gard. Here again, of cours€:, opin ion can be corrupted by interest in more than one directio:n. But when one thinks of the business men who stand to gain frOlTI gov ernmental protection against do mestic or foreign con1petition and of the many who, rightly or wrongly, believe that a different order of things would redound to their benefit, it cannot be denied that this must be. counted an im;.. port ant source of anticapitalism. Wrestling with the AntiCapitalist Mentcdity Traditionally apologists· for cap...; italism have addressed therJaselves to the specific stated objl~ctions 1974 THE UGLY MARKET .•• 735 and accusations advanced by the detractors of the market. In at tempting to do this they have, of course, found it necessary to search out the logical fallacies which support these objections.

At the same time awareness of the more deeply rooted prej udices which seem to be responsible for the continued vitality of the anti capitalist mentality, raise doubts as to the efficacy of this strategy for the ideological defense of the market. Recognition of the three level character of the anticapital ist mentality emphasized in this paper can be of help in identifying what must be faced. At the level of stated objections, there is an enormous variety of possible man ifestations of the mentality. Re futation of one particular objec tion in one form does not prevent its reappearance in some other form. Clearly, for this reason, theory has a crucial role to play in refuting the analytical fallacies responsible for entire groups of possible objections and denuncia tions of the market. On the other hand, the very generality of theo retical discussion makes it pos sible for critics of capitalism to fail to see how the theories relate to partieular features of the mar ket which seem to invite criticism.

The proper application of theory is, of course, in many ways lnore difficult than theorizing itself. Moreover, economic theory is for .various reasons not well adapted for the task of combat ing anticapitalism. Theorists are scientists whose attempts at main taining value-freedom in their work seem to render. them unpre pared to serve as apologists for a particular system ·of social or ganization. Again, the sophistica tion of modern theory is hardly conducive to the correction of pop ular misconceptions. (We recall that Edwin. Cannan, for this rea son, appealed for simple econom ics). There are grounds for believ ing that the character of much contemporary theory, especially in its .emphasis on equilibrium con ditions, is not well suited for the explication of the social function of the market. IS At the ideological level defense against the anti capitalist mentality seems to re quire continual new applicatioOns of fundamental theory to new sit uations~ But on the other hand, our awareness of the role of theoret ical fallacy and of the impact of the multitude. of' specific denun ciations of the market, must make us cautious in imagining ,that the anticapitalist mentality can be dispelled by. any device that fails to come to grips with each of these. levels of. its manifestation.

No matter how successfully one or more of the underlying anti-capi736 THE FREEMAN December talist prejudices may be neutral ized, the possibili ty of logical error yet remains and the avail ability of apparently undesirable features of capitalism ready to be used in its denunciation has not yet been eliminated. Moreover, the formidable list of anticapitalist prejudices must raise doubts con cerning the likelihood that they can be successfully neutralized by any simple means. To be sure, any advance is desirable if its costs are acceptable. But the degree of advance needed to make a visible dent in the anticapitalist mental ity must require the most careful examination of the costs involved in any proposal. Many students of capitalism have pointed out that, despite its advantages, there may well be grounds for predicting its replace ment by other systems. One thinks of Schumpeter's thesis in this re gard. One possible reason for ar guing that capitalism is unstable, is that it is a social system which generates a negative public opin ion so powerful as to spell its ulti mate death. This paper has at tempted to identify the sources of this tendency. Only by recogniz ing the nature and the power of these forces can we hope, through patient teaching and discussion, to dispel the hate and the ignor ancewhich surround the free market. ~ - FOOTNOTES 1 L. Mises, Human Action (Yale, 1949) p.861.

2 F. A. Hayek (Ed.), Capitalism and the Historians (Chicago, 1954). 3 W. H. Hutt, Economists and the Pub lic, A Study of Competition and Opinion (London, 1936). 4 L. Mises, The AntiCapitalistic Men tality (Van Nostrand, 1965). 5 G. J. Stigler, "The Intellectual and the Market Place", National Review (Dec. 1963). 6 G. J. Stigler, "The Politics of Politi cal Economists"; Quarterly Journal of Economics (November 1959); reprinted in Essays in the History of Economics (Chicago, 1965), pp. 52-53. 7M. Zweig, "A New Left Critique of Economics", in D. Mermelstein, (Ed.) Economics: Mainstream Readings and Radical Critiques (New ~ork, 1970), p. 25. 8 R. Lekachman, "Special Introduction" in Mermelstein, Ope cit. p. xi. 9 F. A. Hayek, The CounterRevolution of Science (Free Press, 1955), p. 87. lOOp. cit., p. 80 (italics supplied). See also F. A. Hayek, Individualism and Eco nomic Order (London, 1949), pp. 7 ff.

11 H. Demsetz, "Information and Ef ficiency: Another Viewpoint", Journal of Law and Economics (April 1969). 12 Ope cit. p.l. 13 One thinks here in particular of Ruskin. 14 See the above cited Capitalism and the Historians. 15 See S. Petro, "The Economic-Power Syndrome", in Toward Liberty (Mises Festschrift) Vol. II, p. 274. 16 Economists a~d the Public,p. 50. 17 Ope cit., Chapters III and IV. 18 One thinks here in particular of Professor Buchanan's plea that economics be understood as a sophisticated cataIIac tics, the· theory of exchanges and of mar kets, see his "What Should Economists Do ?", Southern Economic Journal (Janu ary, 1964).