tw25506007

Indeed, individually your preferences can lead you to make choices that are different from the aggregate, and in so doing your choices marginally contribute to what emerges. Sort of like considering a market price too high, thus not buying.

To be clear, that's distinct from actively attempting to broadly change what emerges, e.g., trying to "fix" the education system to no longer be structured for "signaling". To do that requires affecting the trillions of choices made by billions of people, and one way or another, that often requires violence or threats thereof.

The phenomenon you describe isn't "communism", nor is it recent.

Private interests have long tried to use the unique power of the state to shield themselves from market forces. Unfortunately, the people have not only abetted that, but often demanded it; see the recent demands to enshrine extant ISPs as government-chartered monopolies (i.e., utilities) rather than remove the anti-competitive regulations that have fomented high costs and poor service.

As for bailouts, there too the people have long been convinced that the government needs to "fix" the market. Unsurprisingly, the means by which these "fixes" occur happens to benefit the ruling class (politicians and corporate executives) and big firms, giving them a competitive advantage over would-be competitors, and thereby growing ever bigger.

> what you describe is the behavior of your classmates, not the purpose of the system

While the GP used the word "purpose", thus prompting your is-ought comment, knowing Caplan, I suspect it was inaccurate. Economics is largely about an emergent phenomenon, thus falling squarely on the "is" side of things.

Emergence is a relatively recent concept in the linguistic timeline. For most of human history, everything seemed to be either of human action and human intention (turning on a light), or neither of human action nor of human intention (the weather). As such, languages did not emerge (ha!) that easily expressed emergent behaviors, things that were of human action but not of human intention (traffic jams).

Similarly, one can see this with the subject of biological evolution (another emergent phenomenon). It's been nearly two centuries since Darwin got that ball rolling, and still almost any discussion about evolution is rife with inaccurately implied intention.

One other consequence of this linguistic difficulty is that it leads people to propose solutions to perceived problems as if they were just about human action/human intention...