"What should an economy maximize? We normally say utility or some such if we are microeconomists, or savings and investment if we are macroeconomists. These objectives define our welfare assumptions. Recently, there's been a lot of discussion as well as noise and confusion about the ethics and welfare meaning of economic growth (Norberg, Hamilton, et al). Yet all of it eventually drills down to the meaning of income and wealth. Recently even economists have revived the criteria of happiness.I think the question is a good one: "But what if all of this is wrong?" I'm thinking that the answer isn't to maximize novelty. Not because I suspect novelty isn't really valued. Rather, I'm not so sure we should think the "market" is supposed to ideally maximize anything.
But what if all of this is wrong. What if the proper welfare and objective function is actually a flow, and moreover an ephemeral flow. What if instead of maximizing income or wealth, the proper liberal market maximand is novelty.
This is what evolutionary economists believe. And it is also true that neoclassical growth theorists and mystics alike always insist upon there being a something that is maximized. It might be some notion of eternal goodness and welfare, or it might be some notion of growth. Yet the great development economist Amarta Sen says that what should be maximized is forward opportunity. The great uber-economist Friedrich Hayek says the same thing, noting that this means the growth of knowledge. And theoretical evolutionary biologists all insist (since Fisher) that what evolution maximizes subject to reproduction constraints is variation."
I also suspect that Hayek might well disagree that he thought the "market maximand" was forward opportunity. I suspect Hayek might well have said that the market is not supposed to ideally maximize anything.
My suggestion is that the goal is generally individual liberty, and therefore I value "the market" because this is a realm of daily life that, of itself, is the very essence of liberty. Even when government coercively seeks to force the market in one direction or the other, "the market" tends to move of "it's" own accord. Individuals don't like to be forced, so they move their activity and their choices away from the force and in the direction of some other realm of daily life that allows liberty. The significance of the market seems to me to be liberty, and the icing on the cake that is the market is that, as Smith and Hayek taught, spontaneous order emerges from the realm of individual liberty we call "the market."