Thursday, July 8, 2010

Federalist No. 3 "The Divine Beauty of Trade"

More and more every day, American find themselves being lead by those who hide behind the banner of “the greater good” and “charity”, all while demanding more govt control, more political power, and more of your hard-earned tax dollars. War, or the moral equivalent of war, is used to unite mankind under a common cause, to make it easier to push for greater authority and control. Fear is used as a tool by the left and the right to sway the opinions of men, and to blind them to reality. The way to combat that fear, is to expose it to truth, and to support one another with love and compassion, in that truth.

The truth of the matter is this: in a society that does not value individual freedom and private property, “…the reach of the herald is the sound of his voice” (Aristotle). Simply put, governments based on the concepts of common good or concrete communal aims, can only serve to govern small bodies of individuals without the use of fear. Reliance on commonly perceived aims and dangers fails to govern larger bodies, as the greater number of individuals you have in a group, the more diverse their varied interests are, and with greater difficulty does it become to effectively govern them. This is common sense, or at least should be. How then, do you sustain a government that rules over a large body of diverse individuals with varying wants and needs in a manner that is both fair and just?

First: a crash course in economics. We live on a world of scarcity. It dominates our lives, determines our opportunities, and shapes our experiences. If I have an apple, you cannot eat it by the simple fact of reality that I already have. The laws of Nature and physics simply dictate: you cannot consume a resource for one purpose, and then hope to consume it again later. In short: you cannot eat your cake and have it to. And yet, despite this pervasive aspect of reality, there seems to be those who would say, like the French Queen, “Let them eat cake!” Economics is merely the consideration of two consequences that are derived from the reality of scarcity: the problem of allocation, and that of coordination.

Scarcity forces us to make choices. There are only so many hours in a day, and that forces people like you to choose how, when, and in what manner you will spend your time. Time spent sleeping is time not spent working and earning a living. Time spent working is time not spent in preferable leisure and recreation. Scarcity forces everyday people like us to make choices about how we will allocate our time, what we will consume, and when, and whether you will save now so you can enjoy later.

Implied in all theses choices are of course the costs of such choices. Opportunities taken now naturally mean opportunities forgone at the same moment. The cost of work is the 8 hours you could spend doing something else. The cost of a choice is that which we give up when the choice is made.

In a world of scarcity, and the choices imposed by it, the question of allocation is a real and serious one. Who decides what goods and services go to whom, and why? Do we allocate on the basis of first come-first-serve? By random choice? Lottery? Tribal or political affiliations? Executive fiat? Perceived relative need? We can quickly reason out that no matter our choice of allocation, scarcity will STILL exist, and choices will still need to be made at a cost.

And thus we return to our original question: How, do you govern over a large body of diverse individuals with varying wants and needs in a manner that is both fair and just, especially now in light of the very harsh reality of scarcity?

All of human history will prove that where the idea of private, or several, property exists and is protected, along with individual freedom to use his property as he sees fit, civilization has prospered; and where such ideas have been stamped out by central economic planning (i.e govt control), such civilizations have withered away. Civilization is not merely a product of evolution –it is a process of establishing a sound and reliable framework of rules and laws that protect individual freedom and private property.

In this regard trade is almost supernatural in its ability to generate wealth and prosperity. Suppose for example you and I both wanted the apple I had in my possession. Among the various methods of obtaining my apple (guilting me into giving it to you at my expense, stealing it, or killing me to obtain it) by far the most civilized manner is to merely offer me something I value more than the apple itself that is yours to give (perhaps an orange or banana that you have in your possession that you value less than the apple). Thru engaging in such transactions, each of has taken something of value from someone else, something that has been given freely, and yet the net result is that we are BOTH BETTER OFF in terms of personal gratification and happiness. When both of us acted in self-interest, we both mutually benefited, despite the claims of self-proclaimed champions of altruism (i.e. your Marxists, socialists, communists, etc).

In the real world, a safe assumption is that everyone acts out of genuine self-interest. Altruism, while a nice ideal, is not a reliable means of predicting human behavior, and is not a dependable means of governance (you cannot govern a large body of individuals with nothing more than the hope that they will "do the right thing" simply because). Self-interest, however is both these things. People will always act in their own self-interest, unless adequate (and often tyrannical) incentives are provided to encourage otherwise.

Govt control, or central planning, does not work for this very reason: either it will ignore self-interest, and pretend that everyone (or at least, the ruling elite), acts out of selfless altruism, which then results in corrupt and self-interested politicians rising to power and receiving a blind eye to their selfish and destructive behavior; or self-interest is viewed as a threat and in diametric opposition to Utopian altruism, and thus ever-increasingly Draconian measures are exercised in order to provide the aforementioned incentives towards altruism.

Opponents to what Friedrich Hayek called the extended order of economics (capitalism) will argue that such exchanges lack charity, as you are giving something only in exchange for something you value in return. However, such arguments overlook the very obvious fact that even philanthropists are engaged in a willful exchange, for clearly they value the warm-fuzzy feeling that comes with the charitable act of giving more than they value what they have given away. Thus, an exchange has occurred, albeit a less tangible or visible one. In many ways, this is no different than paying money for services rendered to please us such as having our food prepared for us, or our car washed. ALL individuals, even the humble and sincere philanthropist, act in self-interest, for if he did not benefit from such an act of charity, why do so at all? That as outsiders we cannot perceive the benefit obtained by the act, does not diminish that he still benefits from the act in some way, whether it be obtaining the fame and notoriety that comes with philanthropy, or a "feel-good" sensation taught to him by the traditions and morals of his upbringing.

In making such arguments, one should not suppose that I lack certain altruistic tendencies or desires, shared by proponents of social planning (socialism). If anything, my support of the extended order only demonstrates my own altruism and compassion, for without the civilization that would clearly cease to exist without the extended order of free markets, millions of human beings would find themselves subject to poverty and death. There is a distinction to be made between unenlightened self-interest (selfishness or greed), and enlightened self-interest. The former is a character failing that inevitably leads to human suffering if left unchecked. The latter is simply the humble recognition that our our needs and wants should be met first in order that we might be more suited to satisfy the needs and wants of our neighbors. Even Christ found himself needing time away from the masses, begging him for healing and food, so that he could draw closer to His Father in Heaven and recharge His capacities to do good unto them.

The free market system is able to govern large bodies of diverse individuals with varying wants and needs, and to do so without "breaking my leg, nor picking my pocket". The divine beauty of trade allows one to seek his own wants and needs, as he satisfies the wants and needs of others.


No comments:

Post a Comment