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Let us begin with a discussion of a working definition
of markets. Markets are simply millions upon millions,
internationally billions upon billions, of individual
decision-makers, engaged in the pursuit of what they
determine to be their best interests. We say that the
market is free if it is characterized by peaceable,
voluntary exchange, private property rights, rule of law
and limited government intervention and control.
Liberals often denounce free markets as immoral. The
reality is exactly the opposite. Free markets are more
moral than any other system of resource allocation. Let
us examine the moral superiority of free markets.
Say that you hire me to mow your lawn and afterwards you
pay me $30. What I have earned might be thought of as
certificates of performance, i.e. proof that I served
you. With these certificates of performance in hand, I
visit my grocer and demand 3 pounds of steak and a
six-pack of beer that my fellow man produced. In
effect, the grocer asks, "Williams, you're demanding
that your fellow man, as ranchers and brewers, serve
you; what did you do in turn to serve your fellow man?"
I say, "I mowed my fellow man’s lawn." The grocer
says, "Prove it!" That's when I hand over my
certificates of performance -- the $30.
A resource allocation method that requires that I serve
my fellow man in order to have a claim on what he
produces is far more moral than government resource
allocation. The government can offer, justifying it
with one reason or another, "Williams, you don't have to
serve your fellow man in order to have a claim on what
he produces. Through the tax code, we'll take what he
produces and give it to you." Of course, if I were to
privately take what my fellow man produced, we'd call it
theft. The only difference is when the government does
it, that theft is legal but nonetheless theft -- the
taking of one person's rightful property to give to
another.
The essence of free markets is good-good exchanges.
Exchanges of this sort are featured by the proposition:
"I'll do something good for you if you do something good
for me." Game theorists recognize this as a
positive-sum game -- a transaction where both parties,
in their own estimation, are better off as a result. An
example of this is where I go to my grocer and offer the
following proposition: If you do something good for me,
give me that gallon of milk, I’ll do something good for
you, give you three dollars. I am better off because I
valued the milk more than I valued the three dollars and
he is better off because he valued the three dollars
more than he valued the gallon of milk.
Of course there's another type of exchange not
typically, voluntarily entered into, namely good-bad
exchanges. An example of that kind of exchange would be
where I approached my grocer with a pistol telling him
that if he didn't do something good for me, give me that
gallon of milk, I'd do something bad to him, blow his
brains out. Clearly, I would be better off, but he
would be worse off. Game theorists call that a zero-sum
game -- a transaction where in order for one person to
be better off, of necessity the other must be worse off.
Zero-sum games are transactions mostly initiated by
thieves and governments, both are involved in what is
euphemistically called income redistribution.
Wonders of Greed
What human motivation is responsible for getting the
most wonderful things done? I would say greed. When I
use the term greed, I do not mean cheating, stealing,
fraud and other acts of dishonesty, I mean people
seeking to get the most for themselves. One might be
tempted to use “enlightened self interest” but I like
greed better. Unfortunately, many people are naive
enough to believe that it is compassion, concern, and
"feeling another's pain" that's the superior human
motivation. As such we fall easy prey to charlatans,
quacks and hustlers.
Since it's not considered polite, and surely not
politically-correct to come out and actually say that
greed gets wonderful things done, let me go through a
few of the millions of examples of the benefits of
people trying to get more for themselves. There's
probably widespread agreement that it's a wonderful
thing that most of us own cars. Is there anyone who
believes that the reason we have cars is because Detroit
assembly line workers care about us? It's also
wonderful that Texas cattle ranchers make the sacrifices
of time and effort caring for steer so that New Yorkers
can have beef on their supermarket shelves. It is also
wonderful that Idaho potato growers arise early to do
back-breaking work in the hot sun to ensure that New
Yorkers also have potatoes on their supermarket shelves.
Again, is there anyone who believes that ranchers and
potato growers, who make these sacrifices, do so because
they care about New Yorkers? They might hate New
Yorkers. New Yorkers have beef and potatoes because
Texas cattle ranchers and Idaho potato growers care
about themselves and they want more for themselves. How
much steak and potatoes would New Yorkers have if it all
depended on human love and kindness? I would feel sorry
for New Yorkers. Thinking this way bothers some people
because they are more concerned with the motives behind
a set of actions rather than the results.
This is what Adam Smith, the father of economics, meant
in The Wealth of Nations when he said, "It is not from
the benevolence of the butcher, the brewer, or the
baker, that we expect our dinner, but from their regard
to their own interests." In other words, the public
good is promoted best by people pursuing their own
private interests. In the case of New Yorkers, enjoying
their beef and potatoes, I think they are far more
concerned about enjoying those items than the motives or
intentions of the suppliers. Smith also said, "I have
never known much good done by those who affected to
trade for the public good."
Parity of the Market
There is another feature of the free market that often
goes unappreciated. That is the parity of the market
place. The market is an extreme form of democracy: one
man-one vote. While the rich have many more dollars
than I have, my one dollar is just as valuable as a rich
man’s one dollar. One might assert that common people
do not have access to Rolls Royces and yachts. You
would be wrong. Microsoft's Bill Gates is super-rich
and can afford to ride in a Rolls Royce and go yachting;
but so can the common man - just not as long. He can
rent a Rolls or a yacht for a day, half-day or an hour.
This is something often forgotten: people can bid on
quantity as well as price.
Market capitalism is the best thing that ever happened
to the common man. The rich have always had access to
entertainment, often in the comfort of their palaces and
mansions. The rich have never had to experience the
drudgery of having to beat out carpets, iron their
clothing or slave over a hot stove all day in order to
have a decent dinner. They could afford to hire people.
Capitalism's mass production and marketing have made
radios and televisions, vacuum cleaners, wash-and-wear
clothing and microwave ovens available and well within
the means of the common man; thus, sparing him of the
boredom and drudgery of the past. Today, the common man
has the power to enjoy much (and more) of what only the
rich could afford yesteryear.
What about those who became wealthy producing these
comforts available to the common man? Henry Ford
benefitted immensely from mass producing automobiles but
the benefits received by the common man, from being able
to buy a car, dwarfs anything Ford received.
Individuals who discovered and companies who produced
penicillin, polio and typhoid vaccines may have become
very wealthy but again it was the common man who was the
major beneficiary. In more recent times, computers and
software products have benefitted our health, safety and
quality of life in ways that dwarf whatever wealth
received by their creators.
Capitalism is relatively new in human history. Prior to
the rise of capitalism, the way people amassed great
wealth was by looting, plundering and enslaving their
fellow man. Capitalism made it possible to become
wealthy by serving one's fellow man. Capitalists seek to
discover what people want and then produce and market it
as efficiently as possible. Here's a question that we
should ponder in light of anti-market demagoguery: are
people who by their actions created unprecedented
convenience, longer life expectancy and made more fun
available for the ordinary person, and become wealthy in
the process, deserving of all the scorn and ridicule
heaped upon them by intellectuals and politicians? Are
the wealthy really obliged to "give something back?"
After all, what more do the wealthy discoverers and
producers of, say, life-saving antibiotics owe us?
They've already saved lives and made us healthier.
Despite the miracles of capitalism, it doesn't do well
in popularity polls. One of the reasons is that
capitalism is always evaluated against the non-existent,
non-realizable utopias of socialism or communism. Any
earthly system, when compared to a Utopia will pale in
comparison. But for the ordinary person, capitalism,
with all of its warts, is superior to any system yet
devised to deal with our everyday needs and desires.
Rights versus Wishes
Often people speak of rights to housing, medical care,
food and other goods and services deemed necessary for
the sustenance of life. That is a vision that leads to
a gross violation of most standards of morality. In
standard usage of the term, a right, sometimes called
negative rights, is something that exists
simultaneously among people. A right confers no
obligation on another. For example, the right to free
speech is something we all possess simultaneously. My
right to free speech imposes no obligation upon another
except that of non-interference. Similarly, I have a
right to travel freely. That right imposes no
obligation upon another except that of non-interference.
Contrast those rights to the supposed right to medical
care or decent housing whether one can afford it or not.
Through government actions, those supposed rights do
confer obligations upon others. Government has no
resources of its very own. The money coming from
federal, state and local governments pay for those
“rights” are not the result of politicians reaching into
their own pockets. Moreover, there is no Santa Claus or
Tooth Fairy who provides the money. The recognition
that government has no resources of it very own forces
one to recognize that the only way government can give
one person a dollar is to first take it from someone
else. A government granted right to medical care,
housing or anything else confers an obligation on other
American have less of something else, namely diminished
rights to his earnings. That is, if one person has a
right to something he did not earn, it requires another
to not have a right to something he did earn.
Let's apply this bogus concept of rights, some might
call positive rights, to free speech and the right to
travel freely. In that case, my free speech rights
would confer financial obligations on others to supply
me with an auditorium, microphone and audience. My
right to travel would require that others provide me
with airplane tickets and hotel accommodations. Most
Americans, I would imagine, would tell me, "Williams,
yes you have rights to free speech and travel rights,
but I'm not obligated to pay for them!"
As human beings we all have certain unalienable rights,
as so eloquently stated in our Declaration of
Independence. Of the rights we possess, we have a right
to delegate to government. For example, we all have a
right to defend ourselves against predators. Since we
possess that right, we can delegate it to government.
In other words, we can say to government, "We have the
right to defend ourselves but for a more orderly
society, we delegate to you the authority to defend us."
By contrast, I do not possess the right to take the
property of one person to give to another. Since I do
not possess such a right, I cannot delegate it to
government. If you're a Christian or simply a moral
human being, you should be against these so-called
rights. After all when God gave Moses the Eighth
Commandment, "Thou shalt not steal", I'm sure that he
didn't mean thou shalt not steal unless there was a
majority vote in Congress. Moreover, I'm sure that if
you were to have a heart to heart conversation with God
and asked him, "God, is it okay to be a recipient of
stolen property?" I'm guessing He would say that being
a recipient of stolen property is a sin as well. Decent
housing, good medical care and decent jobs are not
rights at all, at least not in a free society; they're
wishes. As such I would agree with most Americans
because I too wish that everyone had decent housing, a
high paying job and good medical care. I would go
further to say that I believe one should assist his
fellow man in need. Doing so by reaching into one’s own
pockets to help him is praiseworthy and laudable.
Reaching into someone else’s pockets to do so is
despicable and worthy of condemnation.
Common Good
If the common good or social justice has any operational
meaning at all, it means that there is a system of
governance where the purpose of laws is to prevent one
person from violating another person's right to acquire,
keep and dispose of property in any manner so long as he
does not violate another's similarly held rights. In
other words, laws should be written to prevent force and
fraud. Laws that force one person to serve the purposes
of another are immoral. An extreme example is slavery.
Most people agree that slavery is immoral. But what
makes it so? Slavery denies a person the right to use
his property (body) and the fruits of his labor the way
he sees fit. Slavery forcibly uses one person to serve
the purposes of another. Tragically, most Americans,
including blacks, whose ancestors have suffered from
gross property right violations, think it quite proper
that one person be forcibly used to serve the purposes
of another.
Today, our government has become increasingly
destructive of the ends it was created to serve.
Americans have become increasingly hostile and alien to
the liberties envisioned by the Framers. We have
disregarded the inscription that graces the wall at the
U.S. Department of Justice warning, "Where the law ends
tyranny begins." Or as Justice Louis Brandeis put it,
“The makers of our Constitution conferred, as against
the Government, the right to be left alone--the most
comprehensive of rights and the right most valued by
civilized men.”[2]
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