Art Carden  

I Keep Returning to This Book...

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If you judge a book's quality by how frequently you come back to it or think about it, Daniel Klein's Knowledge and Coordination: A Liberal Interpretation is a very good book. I keep pulling it off the shelf for different things. This is a deep and provocative treatment of things economists usually take for granted: without entrepreneurs and the information-generating capacity of a profit and loss system, we can't discover the economy's underlying parameters (tastes and technological possibilities). Sometimes, this succeeds (Big Box retailers and warehouse clubs). Sometimes it fails (New Coke). Profits and losses help us figure out when people have sown wheat and when people have sown tares. I doubt that a People's Ministry of Retailing and Distribution would have let someone like Sol Price--a San Diego lawyer who didn't start adulthood looking to get into retail but who helped revolutionize the industry in the middle of the twentieth century--succeed. I sometimes wonder:

Here's a discussion from when I got back into blogging and op-ed writing. Here's the Google Books preview of Knowledge and Coordination. Volume 7 of Studies in Emergent Order contained a symposium to which I, Garret Jones, Deirdre McCloskey, and others contributed.


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CATEGORIES: Austrian Economics




COMMENTS (5 to date)
Cyril Morong writes:

"things economists usually take for granted: without entrepreneurs and the information-generating capacity of a profit and loss system, we can't discover the economy's underlying parameters (tastes and technological possibilities)."

So maybe entrepreneurs are the heroes of our economy.

Candace Allen Smith said:

"Just as the society that doesn't venerate winners of races will produce fewer champion runners than the society that does, the society that does not honor entrepreneurial accomplishment will find fewer people of ability engaged in wealth creation than the society that does."

LD Bottorff writes:

I don't know who this Candace Allen Smith is, but she (or he) makes a good point. However, in the market, the business that comes in 10th place can still be profitable and provide a great reward for its owners and employees. That is one of the marvelous things about the market.

Cyril Morong writes:

Here is an article she co-wrote

"The Entrepreneur on the Heroic Journey: Why Are Entrepreneurs Seldom Viewed as Heroes?"

http://fee.org/the_freeman/detail/the-entrepreneur-on-the-heroic-journey

She is married to Vernon Smith

ThomasH writes:

There is a reason that easy problems -- how much of what kind of soft drink should be produced and sold -- is left to private decision-makers to work out (with great results) with little influence by the state. Harder problems -- how much to spend on national defense and on how -- are left to work out (with poor results) to the public sector.

ThomasH writes:

There is a reason that easy problems -- how much of what kind of soft drink should be produced and sold -- is left to private decision-makers to work out (with great results) with little influence by the state. Harder problems -- how much to spend on national defense and on how -- are left to work out (with poor results) to the public sector.

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