If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, "what would I do if I were a horse?"

I hate when people ask me to: "Massage the data".

In my youth it was said that what was too silly to be said may be sung. In modern economics it may be put into mathematics.

Outside the firm, price movements direct production, which is co-ordinated through a series of exchange transactions on the market. Within a firm, these market transactions are eliminated and in place of the complicated market structure with exchange transactions is substituted the entrepreneur-co-ordinator, who directs production.

Ronnie had it right calling it Torture. That is a much more accurate description the way I see it.

Economics, over the years, has become more and more abstract and divorced from events in the real world. Economists, by and large, do not study the workings of the actual economic system. They theorize about it. As Ely Devons, an English economist, once said in a meeting: 'If economists wanted to study the horse, they wouldn't go around and look at horses. They'd sit in their studies and say to themselves, `What would I do if I were a horse?' '

In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us.