Germany only knew democracy for 14 years before she lost in 33 . There wasn ' t a very solid point of reference . Hell , you could see glimpses of what was to come as early as 19 with how the Freikorps put down the government that immediately followed the Kaiser ' s . <| sep |> But , is the problem really that large ? There are plenty of inefficiencies even in market systems . Sure , but the emphasis is that , in studying microeconomics , we have to pay attention to the institutions within which exchange and coordination take place . In particular , we have to examine how those institutions generate knowledge and incentives such that the plans of actors in the economy become better coordinated over time . Market institutions provide the mechanism for plan coordination through the price system and profit and loss calculation . It ' s not perfect by any stretch , yet it ' s the means by which entrepreneurs are able to realize discrepancies in the plans of consumers , resource owners , etc . and provides incentives to act on those opportunities . The ECP is essentially saying there is no analogous mechanism in economies without market institutions that provides the requisite knowledge incentives .