Efficiency as justification of the market order in general and of economic policy in particular

According to conventional wisdom, the market order is superior to all other economic orders by virtue of its superior efficiency. In the discussion that follows we shall argue that such a sweeping general statement overlooks the real problem, and that although the abstract model of the market order can be justified on the basis of the efficiency criterion (8.1), this criterion is useful only to a limited extent once we leave behind the abstract model and turn to the specific structure of a real-life market economy, as shaped by economic policy (8.2; 8.3).