Capitalism vs Socialism

The crucial distinction between market transactions and collective decision-making is that in the market people are rewarded according to the value of their goods and services to those particular individuals who receive those goods and services, and who have every incentive to seek alternative sources, so as to minimize their costs, just as sellers of goods and services have every incentive to seek the highest bids for what they have to offer.  But collective decision-making by third parties allows those third parties to superimpose their preferences on others at no cost to themselves, and to become arbiters of other people’s economic fate without accountability for the consequences.

Thomas Sowell, Intellectuals and Society, P.67