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.

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

A firm, therefore, consists of the system of relationships which comes into existence when the direction of resources is dependent on an entrepreneur... As a firm gets larger, there may be decreasing returns to the entrepreneur function, that is, the costs of organising additional transactions within the firm may rise.

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?"

If you torture the data long enough, it will confess.

We must first note that economic factors are taken into account in a world in which ignorance, prejudice, and mental confusion, encouraged rather than dispelled by the political organization, exert a strong influence on policy making.

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.