Source: EconLog
by Art Carden
“Markets are notable institutions because they make the signals and the solutions especially clear. Profits and losses take people’s ideas out of the world of speculation and into the world of verification. A hunch becomes more than a hunch: either it is authenticated as a good idea or rejected as a bad idea. Suppose a particular type of new toaster is profitable. In that case, it means that after we tally up all the ‘votes’ people cast by spending or saving dollars, there are more votes for making the toaster than for using the necessary resources for something else. In a free market, the question, ‘Who decides?’ has a simple answer. We each do, and in so doing, we all do.” (10/22/25)
https://www.econlib.org/econlog/profits-are-social-authentication/