If anyone is looking for a brief, concise and informative overview of how markets work, check out Steve Horwitz's most recent article over at The Freeman. A key insight:
It’s not that markets do things well because entrepreneurs are smart; rather, entrepreneurs are able to do things well because markets are “smart” in that they are able, through prices and profits, to make more knowledge available to entrepreneurs than political processes do to bureaucrats. This feature of markets is what Nobel Laureate Vernon Smith calls “ecological rationality.” [emphasis mine -ed.]
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