In sum, the free market always benefits every participant, and it maximizes social utility ex ante; it also tends to do so ex post, for it contains an efficient mechanism for speedily converting anticipations into realizations. With intervention, one group gains directly at the expense of another, and therefore social utility is not maximized or even increased; there is no mechanism for speedy translation of anticipation into fruition, but indeed the opposite[.]... says Rothbard in Man, Economy and State (chapter 12). This is a very important thing to understand. Interference with the free market can only decrease utility, both expected utility of actions, and realized utility.
Wednesday, May 04, 2011
Interference leads to decreased utility
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