Political Element in the Development of Economic Theory Quotes

“According to the liberal theory entrepreneurs earn profit because they combine productive factors in the most economic manner. By seeking profit for themselves they also increase the efficiency of the productive system. According to Veblen, however, entrepreneurs may also earn profit by thwarting production. They can do this in virtue of certain institutional devices. In a sense, Veblen’s theory is, of course diametrically opposed to liberal theory. Yet, his premises are the same: he, too, thinks of an ideal economy which would maximize production if there were no interventions, although ‘interventions’ in his model may be caused by entrepreneurs. Veblen’s criticism is of the kind which can easily be understood by a liberal economist. It is merely a question of deciding what is an ‘intervention’ and what is ‘free’ or ‘natural’. His criticism does not reject the general presuppositions of liberal theory. A liberal can remain inside the boundaries of his theory when he tries to refute Veblen.”
― Gunnar Myrdal, Political Element in the Development of Economic Theory