Quotes from “Lerner on the Economics of Control”

By Milton Friedman (1947)

• If a number of random disturbances, each varying by about the same amount, are added, their mean tends to fluctuate less than any one of the disturbances, and in this sense, the errors tend to cancel out; but their sum tends to fluctuate more than any one of the disturbances, and the larger the number of disturbances added, the larger the fluctuations in the sum. The effects of countercyclical actions of government are added to, not averaged with, the economic movements that would otherwise take place.#
  EconomicsPolicy
• The most that can be expected [of an institutional arrangement] is a reasonable approximation to the economic optimum. They must, therefore, be judged in part by (1) the practical administrative problems entailed in so operating them as to approximate the economic optimum and (2) as a corollary, the extent to which they lend themselves to abuse, i.e., the ease with which they can be used for objectives other than the general welfare.#
  EconomicsInstitutions