Freeman

ARTICLE

He Gains Most Who Serves Best

MAY 01, 1975 by PAUL L. POIROT

Paul Poirot was managing editor of The Freeman from 1955 to 1987.

"The best offense is a good defense" may be effective strategy in war and various competitive sports to decide winners and losers. But this offense-defense terminology is misleading with reference to free market competition. Voluntary exchange is neither a game nor a war; it is a form of cooperation between buyer and seller to their mutual advantage —as each one determines advantage. So, the rule of the market would run more like this: "He gains most who serves best." A businessman’s profits are a measure of his efficiency in the use of scarce and valuable resources to satisfy the most urgent wants of consumers.

Having competed successfully in the market, a property owner seeks to preserve his gains. But the market continues to insist: "He gains most who serves best." In other words, the way to preserve your gains is to keep on serving consumers efficiently; that’s the only protection of property the market can offer.

It should be noted here that the market recognizes and accommodates numerous forms of property. Perhaps the most crucial and significant form is the individual’s property right in his own person — his freedom to use as he pleases for any peaceful purpose his own ideas and energies and other faculties and possessions. As a self-owning, self-responsible human being, he is free to choose work or leisure, thrift or prodigality, specialization and trade or self-subsistence, formal education or on-his-own, splendor or plain living — anything peaceful, at his own expense. The market is there to serve him to the extent that he serves others: "He gains most who serves best."

In addition to one’s right to his own life, the market recognizes and respects other forms of private property. There is the land, the space one occupies to the exclusion of others who have not earned access or been freely invited to share that space. There are the man-made buildings and tools of further production. There is food, clothing, shelter, transportation, medical and dental care, news and other information, books, education, recreation, entertainment, services ranging from strictly unskilled manual labor to the most highly skilled professional help. All these are forms of private property, things owned and controlled by individuals as a consequence of peaceful production and trade — voluntary market transactions, according to the market formula: "He gains most who serves best."

A Wealthy Nation

Those who speak of the United States as a wealthy nation really mean that the citizens of this nation are relatively well off. And we should add the appropriate qualifications: (1) some of the citizens of the United States own more property than do others, and (2) the typical United States citizen owns more property than the typical citizen of other countries.

Without those qualifying conditions, the reference to a wealthy United States might be misconstrued as meaning that our federal government has unlimited resources at its command — an all-too-common belief.

Perhaps the people of the so-called underdeveloped Third World might be excused for the notion that the wealth of the United States is primarily in the form of government property. Citizens of lands long committed to communism have less reason to believe that the path to prosperity and happiness is through government ownership and control of resources. But what could be our excuse, we taxpayers of the United States, for possibly thinking of Uncle Sam as the source of endless goodies? Either our government is independently wealthy and has no need for taxpayers, or else it is dependent on taxpayers for its resources. Is there really any question about that?

Unfortunately, many citizens of the United States seem to be in doubt as to which is the case. They vote themselves instant protection and welfare, payable from Federal funds, as if there were no tomorrow — no accompanying tax burdens and disruption of business and trade. The facts to the contrary are announced daily in the various taxes added to purchases, weekly or bi-weekly in the list of deductions from pay checks, annually as income tax reports are filed. We have every reason to know there is a tax to pay for every act of government, whether to defend life and property and maintain peace and assure justice, or to transfer property from one person to another for whatever reason.

Why Some Have More

Because the market rewards individuals according to services rendered, the result is that some persons earn and own more property than do others. Strictly by serving the masses of mankind, some individuals have been made extremely wealthy. They have been given stewardship over vast amounts of property because of their proven capacity to use such scarce resources efficiently in providing the goods and services most sought and most valued by others. But if, for some reason, any present owner of scarce resources loses his touch, fails to serve efficiently, the open competition of the ongoing market process soon will bid the property into the hands of some new owner who serves better.

Meanwhile, the market process sustains vast numbers of us who pretend to know better than we do— who feign a wisdom not manifest in our performances. And one version of such "wisdom" holds that "we" know better than "they" how to use their property, that there is a more humane and just method of allocating scarce and valuable resources than to leave it to the market decisions of competing owners of private property. In other words, property should be redistributed "to each according to need," not left to the market rule: "He gains most who serves best." And just how is the market to be closed? Forcibly! Instead of upholding the dignity and property rights of the peaceful owner, the government shall intervene sometimes to drag a supplier unwillingly to market, sometimes to bar or limit his entry; sometimes to protect present owners of property in uses long since declared wasteful by any reasonable measure of the market place, sometimes to forcibly transfer property from the most efficient users into the hands of those who most miserably have failed to serve others in any way whatsoever.

The Best System

So we come back once more to the only rule the market follows, "He gains most who serves best." Despite the inequalities of wealth resulting from observance of that rule, no one reasonably contends that there is a better formula for human action in society. There is nothing morally wrong about voluntarily serving others. A person does not rationally contend that he has been impoverished because others have acted to serve his most urgent wants. When two parties voluntarily exchange their privately owned resources or properties, each gains — else he would not trade; and no uninvolved third party is harmed by reason of the trade.

While the rule of the market allows the greatest gain to the one who serves best, it affords no protection for any gain except through continuing use in the efficient service of others. In other words, the market insists that scarce resources be owned by those who are most proficient in serving willing customers, which is the least wasteful social distribution of wealth that is possible. To arbitrarily or coercively change the market-derived pattern of ownership is to introduce waste; and there is no historical or theoretically sound evidence that waste of scarce resources is socially beneficial. What any waste of any scarce resource amounts to in the final analysis is a waste of human lives — the inevitable consequence when compulsory collectivism interferes with or displaces the market process of open competition.

It is comforting to be a citizen of a wealthy nation. But a nation is wealthy only by reason of the fact that resources are privately owned and controlled according to the rule, "He gains most who serves best." And the only way in which government can usefully serve such a society is to keep the market open, restrain and punish those who violate the rule, but otherwise let free men compete.

ASSOCIATED ISSUE

May 1975

ABOUT

PAUL L. POIROT

Paul L. Poirot was a long-time member of the staff of the Foundation for Economic Education and editor of its journal, The Freeman, from 1956 to 1987.

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