The problem of politics is the problem of knowledge. The superiority of market processes to political processes is not in origin moral but technical. The useful knowledge in any modern society is distributed rather than centralized — and, as Read intuited and as modern scholars of complexity studies confirm, there is no way to centralize it. Ludwig von Mises applied that insight specifically to the defects of planned economies — the famous “socialist calculation problem” — but it applies in varying degrees to all organizations and all bureaucracies, whether political, educational, religious, or corporate. Markets work for the same reason that the Internet works: They are not organizations, but disorganizations. More precisely, they are composed of countless (literally countless, blinking into and out of existence like subatomic particles) pockets of organization, their internal structures and relationships to one another in a constant state of flux. Market propositions are experimental propositions. Some, such as the iPhone and the No. 2 pencil, are wildly successful; others, such as New Coke or Clairol’s Touch of Yogurt Shampoo, are not. Products come and go, executives come and go, firms come and go. The metaphor of biological evolution is an apt one, though we sometimes draw the wrong conclusion from that — Social Darwinism and all that nonsense.
Conservatives like to say “Markets work,” as though that were an explanation of anything. What we really are saying is: “Failure works.” Corporations are mortal. Failure is not only an important part of the market process, it is the most important part of the market process.