The critics argued that using markets to allocate resources would protect the Asian Tigers from the errors made by the Soviets. Krugman conceded the point. Markets would indeed prevent the sort of horrendous misallocation of resources that occurred in the Soviet Union. However, he argued that unless the Asian Tigers improved their labor productivity, which would require an increase in technological knowledge, they would never catch up with the United States. Both Krugman and his critics took the importance of markets as a given.
Most economists do.
Sustained economic growth requires more than inputs. It requires efficient organization. Recent economic history has proven that markets are a much more efficient institution for allocating resources and designing production and distribution systems than are governments. The Importance of Markets For half a century, from the 1920s into the 1980s, an Austrian-born economist and social philosopher named Friedrich Hayek wrote about the wonders of markets. First, markets provide the incentives necessary for people to use resources efficiently.