On the Efficiency and Morality of Free Markets (Donald J. Boudreaux, May 29, 2024, AIER)
The implication seems to be that at least some defenders — mostly economists — of free markets are interested in “economic efficiency for its own sake,” while thoughtful conservatives understand that well-rounded individuals in healthy societies pursue goals beyond “just the efficient.” Yet in fact, all classical liberals who endorse free markets also endorse, no less than do conservatives, the seeking of the good, the beautiful, and the true. And no serious economist who champions free markets has ever advocated efficiency for its own sake or at the expense of the good, the beautiful, and the true. The reason is simple: “efficiency for its own sake” is meaningless.
Efficiency describes a relationship between means and ends. Efficiency says nothing whatsoever about the contents of the ends. If you want to drive this morning from Philadelphia to New York in the shortest period of time, a well-functioning GPS navigator will show you the appropriate route, one that would likely include a long stretch on I-95. If, in fact, there’s no alternative route that you could drive that would get you to New York more quickly, then the route displayed by your GPS device is efficient given your goal. But if your goal is instead to take in some beautiful scenery along the way, subject to getting to New York before nightfall, then the most-efficient route will be one that keeps you off of I-95 and in your automobile for several hours more than you’d spend if you took the fastest route.
To act efficiently is simply to act in that way that best enables you to achieve your goal, whatever that goal might be.
The end of an economy is to create wealth and the free market is the most effective means we’ve found to do so. Redistribution of that wealth is a mere political question.