Had every man sufficient sagacity to perceive at all times, the strong interest which binds him to the observance of justice and equity, and strength of mind sufficient to persevere in a steady adherence to a general and a distant interest, in opposition to the allurements of present pleasure and advantage, there had never, in that case, been any such thing as government or political society; but each man, following his natural liberty, had lived in entire peace and harmony with all others. (Italics in original)
David HumeGovernment is a contrivance of human wisdom to provide for human wants. Men have a right that these wants should be provided for by this wisdom. (Italics in original)
Edmund BurkePublic goods and prisoners' dilemmas
Probably the most important accomplishment of economics is the demonstration that individuals with purely selfish motives can mutually benefit from exchange. If A raises cattle and B corn, both may improve their welfare by exchanging cattle for corn. With the help of the price system, the process can be extended to accommodate a wide variety of goods and services.
Although often depicted as the perfect example of the beneficial outcome of purely private, individualistic activity in the absence of government, the invisible hand theorem presumes a system of collective choice comparable in sophistication and complexity to the market system it governs. For the choices facing A and B are not merely to trade or not, as implicitly suggested.
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