Suppose you owned a furniture store, and someone asked you what you sold. You would probably say “furniture.” Likewise, if someone invited you to lunch, you would go to a restaurant for something to eat. The use of such words as “furniture” and “lunch” is common, and these words serve a useful purpose in communicating.
Yet, at bottom, no one ever really buys (or sells) “furniture” or “lunch.” What you actually buy is a chair, a sofa, or a table. And when you have lunch, you actually eat a bowl of soup, a Caesar salad, or a hamburger. “Furniture” and “lunch” are collective nouns; they are abstractions that exist only in the mind. The real things are the chairs, hamburgers, and so on.
No one can deny this. But many would say that such a distinction is a nitpick that doesn’t amount to much in practical terms, since everyone implicitly knows what is going on when we use collective terms like furniture and lunch.
But sometimes the confusion makes a big difference, such as in the discussion of human interactions. There, almost without exception, thought and action are carried out in terms of groups of people without regard to the real individuals who make up those groups. While we all remember that chairs, tables, and the rest are meant when we use the term “furniture,” we almost universally forget that individual people are the real things in “society.”
This is collectivism. The insidious common element in all modern collectivist philosophies, whether socialist, communist, or fascist, is the mindset that places collective abstractions about human beings above the individuals who lie below. It is an organic view of society in which its elements, individual people, are lost.
Characterizations about society can only be known by the intellect, not the senses. Only individuals feel better or worse off—collective abstractions about individuals do not. You cannot add chairs and tables together and get anything meaningful. You can’t eat lunch; you can only eat a hamburger. Likewise you cannot add people together and get anything real. In the abstract universe of the collective, individuals and their well-being are sacrificed and implicitly traded against one another in an endless game of redistribution to satisfy some collectivist view that exists only in the mind of the viewer.
As the French political philosopher Bertrand de Jouvenel observed some time ago, people are the reality and society is an artificial convention. In the nineteenth century, when the conception of society was transformed from a collection of people to a collective about and above people, there became no limit to the power of the state—anything could be justified in the name of the collective, which had a being superior to that of any individual.
The concept of a “market” is just that: a concept. It is a collective noun. In the philosopher’s language, “the market” is a universal, a conceptualism, a product of the mind that does not exist independently of its elements. The real, human elements of the “market” are individual voluntary exchanges and associations, each carried out by individuals acting in a mutually beneficial way. One cannot evaluate the concept of a “market”; one can only evaluate its elements—voluntary exchanges. And since voluntary exchanges, and more broadly, voluntary associations, leave humans better off, “markets” must be beneficial to humans, contrary to the conclusions of modern liberals. As philosopher J. C. Lester points out, other than charity, the only alternatives to voluntary exchanges and associations are coercion, theft, robbery, fraud, extortion, and so on. On the personal level the only alternatives are assault, rape, slavery, and murder. To the extent that one objects to the “market,” as many do, then one is advocating these very illiberal alternatives, usually under some statist euphemism like taxation, conscription, regulation, egalitarianism, the public interest, and so on. From before Marx down through Rawls, modern liberalism, communitarianism, or whatever collectivist abstraction happens to be in vogue, is a retreat into holism where human beings are lost.
“Globalization” is just another of those holistic slogans. Like all abstractions, it is difficult to define exactly what it means—what its real elements are—but it seems to be concerned with trade, especially international trade.
To talk intelligently about globalization, you have to reduce the concept to its real elements. Just as the idea of a “market” is a holistic concept, so is the idea of “international trade,” and they are the same thing. Nations (or cultures) don’t trade. People do. Nations trade only in the minds of those who collectivize and aggregate the individual elements of trade—the voluntary exchanges that occur between people who live in different countries. There is no real, elemental difference between international trade and any other kind of trade: both are voluntary exchanges between individuals and/or voluntary associations of individuals (like corporations), and the only difference is that one takes place between people in different countries.
One of the consequences of thinking about international trade in globalized terms is that one may conclude it is bad. While it is difficult to argue that voluntary human associations, like exchanges, are bad, once these are collectivized into terms like “international trade” or “globalization,” that argument is easier for shallow thinkers to swallow. Exactly why it is bad is usually left to the imagination, and human beings, especially so-called intellectuals, have fertile imaginations.
To conclude that international trade is bad you must believe that its real elements, voluntary exchanges, are bad—exchanges made by individuals who believe they will be better off trading than not trading. If you argue that voluntary exchanges are bad it must be because you believe that you know other people’s preferences better than they do—an elitist concept that when implemented leads to all kinds of authoritarian, coercive, nonmarket behavior.
One of the more ludicrous, and illogical, popular notions about globalization is that trade impoverishes. This, of course, is a conflict in terms: trade, by definition, is voluntary; if it is voluntary, it must be mutually beneficial; if it is mutually beneficial, it cannot be impoverishing, unless you live in some weird masochistic world where people choose to make themselves worse off.
The sad thing is that the logical mistakes of communism, socialism, and fascism don’t end there. All modern societies have become collectivist in their outlook. The result is the endless growth of collectivism’s hegemony in the form of statism. There, a higher and higher proportion of human output and action is allocated and regulated by state coercion rather than voluntary human interaction.
John Wenders is professor of economics, emeritus, at the University of Idaho.