Freeman

ARTICLE

Freedom Footnote

APRIL 01, 1988 by PAUL RUX

The author is a Ph.D. student in educational administration at the University of Wisconsin at Madison. He is also a management consultant.

The economist’s stock-in-trade—his tools—lies in his ability and proclivity to think about all questions in terms of alternatives . . . . The win-lose, yes-no discussion of politics is not within his purview. He does not recognize the either-or, the all-or, nothing, situation as his own. His is not the world of mutual exclusives. Instead, his is the world of adjustment, of coordinated conflict, of mutual gain.”*




* Walter I. Garms, James W. Guthrie. and Lawrence C. Pierce, School Finance: The Economics and Politics of Public Education (Englewood Cliffs, New Jersey: Prentice Hall, 1978), pp. 75-76.

There’s an old saw about finding great value in small packages. In this case, the textbook footnote cited above opened my eyes to the salient difference between the free market and state intervention in allocating resources.

The footnote is remarkable because it succinctly suggests why the free market is preferable to statism. It emerged as one of the critical insights in a summer of rigorous Ph.D. study of school finance at the University of Wisconsin at Madison. Despite its obscurity, the footnote’s bold, bald defense of freedom is worthy of comment.

The footnote reminds us that state action is political. In politics, there’s always a “win-lose” situation. For someone to gain, someone else must lose. It’s “all-or-nothing,” “either-or.” Take, for example, an election. There’s just one winner. Somebody else must lose and bow to the dictates of the winner. Consequently, whenever the state intervenes, the dynamics of politics are at work; people struggle to avoid ending up empty- handed, bitter, and bossed. For all his faults, Lenin aptly summed up politics as “who/whom.” Who’s doing what to whom?

Conversely, as the footnote also suggests, in the free market the key is “mutual gain.” You give something of value to get something of value. This is a “win-win” situation. Consider, for instance, the purchase of a suit. The customer exchanges money for clothing. The haberdasher gains dollars; the customer gains a new outfit. Both are winners.

in a nutshell, the textbook footnote suggests the superiority of the free market over statism. In the free market, “mutual gain” fosters choice and cooperation, as resources tend to fill the needs of everyone. “Win-lose” statism co-opts these resources and sows division and alienation.

These are our choices. It was quite a surprise to find them spelled out lucidly in a textbook footnote!

There’s an old saw about finding great value in small packages. In this case, the textbook footnote cited above opened my eyes to the salient difference between the free market and state intervention in allocating resources. The footnote is remarkable because it succinctly suggests why the free market is preferable to statism. It emerged as one of the critical insights in a summer of rigorous Ph.D. study of school finance at the University of Wisconsin at Madison. Despite its obscurity, the footnote’s bold, bald defense of freedom is worthy of comment. The footnote reminds us that state action is political. In politics, there’s always a “win-lose” situation. For someone to gain, someone else must lose. It’s “all-or-nothing,” “either-or.” Take, for example, an election. There’s just one winner. Somebody else must lose and bow to the dictates of the winner. Consequently, whenever the state intervenes, the dynamics of politics are at work; people struggle to avoid ending up empty- handed, bitter, and bossed. For all his faults, Lenin aptly summed up politics as “who/whom.” Who’s doing what to whom? Conversely, as the footnote also suggests, in the free market the key is “mutual gain.” You give something of value to get something of value. This is a “win-win” situation. Consider, for instance, the purchase of a suit. The customer exchanges money for clothing. The haberdasher gains dollars; the customer gains a new outfit. Both are winners. in a nutshell, the textbook footnote suggests the superiority of the free market over statism. In the free market, “mutual gain” fosters choice and cooperation, as resources tend to fill the needs of everyone. “Win-lose” statism co-opts these resources and sows division and alienation. These are our choices. It was quite a surprise to find them spelled out lucidly in a textbook footnote!

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April 1988

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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