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Economics

#22 – "Voluntary, Market-Based Arrangements ‘Use’ People”

Gary M. Galles

 

The Foundation for Economic Education (FEE) is proud to partner with Young America’s Foundation (YAF) to produce “Clichés of Progressivism,” a series of insightful commentaries covering topics of free enterprise, income inequality, and limited government.

Our society is inundated with half-truths and misconceptions about the economy in general and free enterprise in particular. The “Clichés of Progressivism” series is meant to equip students with the arguments necessary to inform debate and correct the record where bias and errors abound.

The antecedents to this collection are two classic FEE publications that YAF helped distribute in the past: Clichés of Politics, published in 1994, and the more influential Clichés of Socialism, which made its first appearance in 1962. Indeed, this new collection will contain a number of essays from those two earlier works, updated for the present day where necessary. Other entries first appeared in some version in FEE’s journal, The Freeman. Still others are brand new, never having appeared in print anywhere. They will be published weekly on the websites of both YAF and FEE: www.yaf.org and www.FEE.org until the series runs its course. A book will then be released in 2015 featuring the best of the essays, and will be widely distributed in schools and on college campuses.

See the index of the published chapters here.

 

#22 – “Voluntary, Market-Based Arrangements ‘Use’ People”

Among the most well-worn moral criticisms of voluntary arrangements is that they treat people as things or commodities, rather than as individuals. In other words, market arrangements are indicted because participants “use” people in the process. As the late economist Paul Heyne described it, “such a system seems somehow to violate our profound moral conviction that nothing is more valuable than individual persons, and that each person ought to be treated as a unique end, never as a means to some further end.”

The irony is that those who understand and respect market arrangements do so precisely because “nothing is more valuable than individual persons.” I echo FEE’s founder Leonard Read’s understanding that “An individualist…looks upon society as the upshot, outcome, effect, recapitulation incidental to what is valued above all else, namely, each distinctive individual human being.” But why have anti-individual criticisms persisted for so long, despite the contradiction? In part, due to a rhetorical bait-and-switch that changes the meaning of “use” in the middle of the argument.

There is widespread moral condemnation of “using” people. However, use has different meanings. "Use" can mean "utilize" or "employ," with no implication of harm to others. That is what we mean when we say someone uses a hammer. It is also what happens when people voluntarily provide their services to advance others’ purposes in markets. In contrast, "use" can also mean "abuse" or "harm," particularly as a result of force or fraud. That is what we mean when we say “you pretended to care about me, but you were just using me.”

The first meaning is consistent with either imposing no harm on others or benefitting them (as in mutually acceptable market arrangements, which individuals would not otherwise enter into); the second meaning requires that others are harmed. And changing the meaning from the first to the second in midstream allows a logical cheat.

Some people may be fooled by saying, “You use others in markets; using people harms them.” But that is far less likely if you clarify which “use” you mean. “You utilized others’ willingly supplied services, therefore you harmed them” will convince few. Language misuse, abetted by sloppy thinking, can transform the reality of mutual benefits from uncoerced market exchanges into the fiction of exploitation theory.

There is another logical problem that arises from saying we should treat people as ends in themselves and never as means. It is not a choice between the two, because they are not mutually exclusive. People are both ends in themselves and the means by which others advance their ends.

What others offer us in all mutually agreed-to exchanges are means to better advance our ends. But to treat people’s actions or services as means to our ends does not demean them as individuals; it is simply inherent in mutual benefit. And to miss that distinction, condemning such arrangements as the unethical use of others, comes very close to the self-contradictory assertion that nothing mutually beneficial is allowable. Instead, we should laud rather than lambaste a system that can dovetail the often incompatible plans and purposes of multitudes of different individuals to expand what can actually be achieved.

Further, when people freely choose their arrangements, each respects others as important ends in themselves in an important way that is absent when others dictate what is allowable. It allows them their freedom, based in self-ownership, to choose how best to use the means they have at their disposal.

Mutually voluntary arrangements are those the participants believe best advance their ability to achieve their ends without violating others’ similar ability. Nothing is detracted from the ability to pursue the ends we each choose; possibilities for both are expanded. How can we better advance others’ ends than letting them choose how to use their current means most productively as they see it? As Phillip Wicksteed wrote over a century ago in The Common Sense of Political Economy, voluntary economic relations ease “the limitations…of their own direct resources…by the very act that brings a corresponding liberation to those with whom they deal…[leaving] no room to bring against it the charge of being intrinsically sordid and degrading.”

The hypothetical ideal of always treating people as objects of benevolence rather than utilizing their services through mutually beneficial exchanges is also unattainable. As Wicksteed put it, “The limitation of our powers would prevent our taking an equally active interest in everyone’s affairs.” In any society larger than an immediate family, we simply cannot know enough to organize relationships based on benevolence.

Consider the sheer number of transactions and transactors involved in our economic arrangements. As Read’s “I, Pencil” demonstrates, vast numbers are involved for even the simplest products, much less more complex products, such as automobiles. In such circumstances, the alternatives are not coordinating relationships via exchange (another name for persuasion) or via charity, but coordinating relationships via exchange or coordinating them far less well, if at all, because it exceeds our knowledge and capabilities.

Heyne summarized it well:

When money prices, rather than concern for each other as persons, coordinate social transactions, social cooperation becomes possible on a more extensive scale. Those who would like to force all social transactions into the personal mode do not realize how much of what they now take for granted would become wholly impossible in the world of their ideals…They are ignoring the incredible complexity of the system of social cooperation by means of which we are fed, clothed, housed, warmed, healed, transported, comforted, entertained, challenged, inspired, educated and generally served.

Claims that market arrangements involve the unethical “using” of others are of lengthy pedigree. But they are also of questionable merit. They rhetorically transform the utilization of other individuals’ services in ways that benefit all parties involved into “using” others to their imagined detriment. They treat the issue as a choice between treating others as means or as ends, when honoring others as ends in themselves, and so according them the dignity of choosing how best to accomplish their purposes, leads them to voluntarily provide the means to advance others’ ends. They employ a standard of always treating people as objects of benevolence rather than utilizing their services through mutually beneficial exchanges, assuming other things equal, when trying to do so would destroy many forms of social cooperation that voluntary arrangements have produced so dependably that we rely on them daily.

However, careful thinking, not cowed or manipulated by misleading arguments, leads to diametrically opposed conclusions. If we accept the premise that individuals and their development are our ultimate ends, the voluntary arrangements they evolve are, as Friedrich Hayek pointed out, among society’s greatest creations, not its nemesis.

Gary M. Galles
Professor of Economics
Pepperdine University

 

Summary

 

  • Advocates of free markets have long been accused of supporting arrangements that “use” people. It’s ironic because free markets are the one economic arrangement that most respects and empowers individuals.
  • Markets, because they are rooted in the free choice of individuals, self-ownership, voluntary and contractual relationships, and customer satisfaction, are far less likely to “use” people (in the pejorative sense) than arrangements that are coerced, centrally planned, or bureaucratic.
  • People should not be treated as objects of benevolence, but as sovereign individuals with whom we deal voluntarily, peacefully, and for the mutual benefit that occurs through freedom of choice.
  • For further information, see:

“Does Trade Exploit the Poorest of the Poor?” by Russell Roberts: http://tinyurl.com/kdo9b6n

“The Real Exploiters” by Scott D. Palmer: http://tinyurl.com/opcs3om

“Capitalism and Cooperation” by Alan Levite: http://tinyurl.com/o99hpac

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