The always thoughtful John Carney writes to Bob Wenzel at EPJ:

“I think your view that no bad results can arise from market processes lets you off too easy. It is harder, nobler, and takes more courage to defend markets that are not perfect and do not always result in progress.”

Hear, hear, for a bit of honesty. I’m not talking about the results of what goes on now, which is the result of crony capitalism/managed capitalism (collectivism, basically).

Even if none of that existed, and even if we had pure free markets in the most ideal sense, we’d still often get bad results, because human beings aren’t perfect.

However, that doesn’t mean the results wouldn’t get even worse, in the long run, were we to try to manage the outcome.

But then Carney writes this:

You see market processes as a panacea for the economy, much the way statists see the government as a panacea.

Come again? Market processes ARE the economy. They are not outside it. A transaction is either initiated from an economic interest (a market interest, an interest in exchange of value) or it is initiated because of a bureaucratic calculation (i.e. compliance with a law or with a directive or policy).  Any genuine economic calculation or trade-off is always a market calculation.By genuine, I mean something in which the person doing it has a direct interest in the outcome and is not engaging in a theoretical exercise. To borrow a legal term, he must have standing…

And the economy as such should really be confined to those transactions that are in the market. Anything else is strictly speaking not part of the economy. It’s part of the bureaucracy, even though it might closely be tied into the real economy.

At least, that’s my understanding.