Monday, 11 April 2016

Quote of the Day: The leading cause of economic progress …

 

 

“Economic progress is the leading manifestation of yet another major institutional feature of capitalism: the harmony of the rational self-interests of all men, in which the success of each promotes the well-being of all.
    The basis of capitalism’s harmony of interests is the combination of freedom and rational self-interest operating in the context of the division of labour, which is itself their institutional creation.
    Under freedom, no one may use force to obtain the cooperation of others. He must obtain their cooperation voluntarily. To do this, he must show them how cooperation with him is to their self-interest as well as his own, and, indeed, is more to their self-interest than pursuing any of the other alternatives that are open to them. To find customers or workers and suppliers, he must show how dealing with him benefits them as well as him, and benefits them more than buying from others or selling to others.
    As will be shown, the gains from the division of labour make the existence of situations of mutual benefit omnipresent under capitalism.
   The division of labour, in combination with the rest of capitalism, represents a regular, institutionalised arrangement whereby the mind of each in serving its individual possessor, serves the well-being of a multitude of others, and is motivated and enabled to serve their well-being better and better.
    In sum, capitalism, with its economic progress and prosperity, is the economic system of a free society. It is the economic system people achieve if they have freedom and are rational enough to use it to benefit themselves. As I have said, it represents a self-expanded power of human reason to serve human life."

~ George Reisman, in the section 'Capitalism and the Origin of Economic Institutions' from his book Capitalism.

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