Purpose of the economic system

[cottrell@xxxxxxx (Allin Cottrell)]

Somebody -- I'm afraid I've lost track of who it was -- recently asked
what was the purpose of the economic system.  It seems to me that this
question is not well-formulated.  The system we have was not designed
with *a* purpose in mind.  It is the resultant of a lot of conflicting
individual and corporate purposes -- as Hayek would say (not that I wish
to endorse his vision as a whole), it is a "spontaneous order".  Some
would say that it nonetheless serves the (unplanned) purpose or function
of maximizing the welfare of the participants in the market, given their
initial "endowments".  Some would deny that hotly, and some of the
latter would argue that the system should be *re-made* in such a way that
it actually serves the purposes of (a) meeting all basic human needs for a
start (including providing dignified and gainful employment for all who
are able) and (b) fostering the sort of useful and sustainable new technology
which holds out the prospect of enriching people's lives while preserving
their natural environment.

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Allin Cottrell
Department of Economics
Wake Forest University
Winston-Salem, NC, USA
(910) 759-5762
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