Capitalism Works Swimmingly, Says 'The Atlantic'

This month's issue of The Atlantic features a fantastic, close-to-perfect (but for the seeming, off-the-cuff embrace of some tax schemes) defense of capitalism by senior editor Clive Crook. It's ostensibly a cultural critique, but the cultural aspects of the piece are to me of lesser importance than is its overall embrace of markets. (I feel like Cicero when I type this: Subscription required.)

In the late 1980s, as Mikhail Gorbachev embarked on his perestroika program of economic reform, Soviet officials were sent abroad to see how things were done in the West. One visited London’s main vegetable market. He asked how the market was organized, and how prices were set. He was told that the individual traders bought whatever quantities they wished, and set their own prices, and that these fluctuated throughout the day as the balance of supply and demand changed. At this, the Soviet visitor laughed. He said he understood that this was the official line—but, please, how did the market really set prices?

That, in fact, was the reaction of an intelligent man. It is fantastically improbable that markets work, at scale, as well as they do. It is astonishing that in an economy of America’s size—to say nothing of the world economy as a whole—a limitless variety of goods and services is continuously offered at prices people are willing to pay, without persistent gluts or shortages, entirely without central direction. That the system also calls forth an endless flow of innovation and improvement is a miracle. The man from Moscow was right to be incredulous.

Last month the magazine also featured an interview with its correspondent (and Reason contributor) Jonathan Rauch in which he used the word "gay-dar".