Liberty in History and Institutions
We are blinded by the common use of language to the fact that all social actions are attended by reactions. To take the commonest and often noticed instance, we talk of buyers and sellers as if they were independent of each other; we call those who have money buyers, and those who have goods sellers. We find, however, that no transaction can be correctly understood until we regard it as an exchange, having two parts, an action and a reaction, equal and opposite. In the language of the market, also, we speak of being long or short of the market, but every one who has either money or goods is in the market, and is both long and short of it all the time. He is either long of goods and short of money, or long of money and short of goods. The philosophy of the market cannot be understood unless we study it from this point of view.
The fallacy of a great many doctrines in social science, and the philosophy of a great many errors in social policy, is that they divorce the action from the reaction. If there is not a reaction with equivalence and equilibrium, then there is an expenditure from one side toward the other, a drain of force from one side and an accumulation of it at another, until there come a crisis and a redistribution. When the return and equivalence are suspended, there is a necessary continuance of the movement, in the tendency toward a stable equilibrium of another kind, which would come about when all the force had been transferred. For instance, you give good schools for less than their market value; you must, then, give free schools; then you must give free books and stationery; then "hot breakfasts," and so on in succession.
- "The Economist," 1889, p. 430.