Paul Samuelson on Market

“Like a farmer using a carrot and a stick to coax a donkey forward, the market system deals out profits and losses to induce firms to produce desired goods efficiently.”

“A market economy is an elaborate mechanism for coordinating people, activities, and businesses through a system of prices and markets. It is a communication device for pooling the knowledge and actions of billions of diverse individuals. Without central intelligence or computation, it solves problems of production and distribution involving billions of unknown variables and relations, problems that are far beyond the reach of even today’s fastest supercomputer. Nobody designed the market, yet it functions remarkably well. In a market economy, no single individual or organization is responsible for production, consumption, distribution, or pricing.”

“Everyone notices how much the government does to control economic activity—tariff legislation, pure-food laws, utility and railroad regulations, minimum-wage regulations, fair-labor-practice acts, social security, price ceilings and floors, public works; national defense, national and local taxation, police protection and judicial redress, zoning ordinances, municipal water or gas works, etc. What goes unnoted is how much of economic life goes on without direct government intervention. Hundreds of thousands of commodities are produced by millions of people more or less at their own volition without central direction or master plan. […] This alone is convincing proof that a competitive system of markets and prices—whatever else it may be, however imperfectly it may function—is not a system of chaos and anarchy. There is in it a certain order and orderliness. It works. It functions. Without intelligence it solves one of the most complex problems imaginable, involving thousands of unknown variables and relations. Nobody designed it. Like Topsy, it just growed; and like human nature, it is changing; but at least it meets the first test of any social organization—it is able to survive.”