Will Wilkinson gets it exactly right. According to Adam Smith, Friedrich Hayek and everyone else who knows what he or she is talking about, well-functioning markets depend, inter alia, upon clear property rights and a judicial system that enforces agreements and resolve disputes. These institutions set the basic rules that govern the elements in the system (eg, you and me, in our capacity as buyers and sellers of goods, services, and labour) and account for its stable, higher-level emergent properties, such as allocative efficiency. The rules of the game determine the pattern or order that emerges when we, the players, play by those rules. The not-really-libertarian idea, if I may pursue the games metaphor, is that certain clear and simple rules can produce unpredictably complex and rewarding patterns of play. Its not that a bunch of random athletes dumped without instruction on a pitch will sooner or later spontaneously produce a gripping, well-ordered sporting spectacle. Its important not to confuse, as Mr Linker does, the process by which rules come about and the often surprising and complex patterns of activity those rules might bring about.
Posted on: Mon, 29 Sep 2014 19:01:15 +0000