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Monday, September 23, 2019 Leer en Español

Free Markets Promote Those Who Peacefully Improve Others’ Lives

By enriching most those who are most productive, capitalism makes those they deal with more fit for survival, as well.

Photo by You X Ventures on Unsplash

Dog-eat-dog, “survival of the fittest” rhetoric has long been a favorite grenade thrown by opponents of private property, voluntary exchange systems (i.e., capitalism without crony as a modifier). But it is striking that they never answer a central question without which their verbal assaults are logically meaningless—fit for what?

Fit as Determined by Reward

Murray Rothbard may have stated this best in Man, Economy, and State:

To apply the principle of the “survival of the fittest” to both the jungle and the market is to ignore the basic question: Fitness for what? The “fit” in the jungle are those most adept at the exercise of brute force. The “fit” on the market are those most adept in the service of society. The jungle is a brutish place where some seize from others and all live at the starvation level; the market is a peaceful and productive place where all serve themselves and others at the same time and live at infinitely higher levels of consumption.

What is fit, and therefore who is fit, depends on what is rewarded. As Sheldon Richman put it, “The ‘fittest’ are those who best meet the requirements of the system.” Matt Zwolinski extends the analysis to what being the fittest does not mean:

To be “fit” is not necessarily to be “better” or “more virtuous” than one who is unfit. All that fitness means, in the evolutionary sense, is adaptation to environment.

Zwolinski makes his meaning clear with an example:

The fact that a rattlesnake will outlive a horse in a desert doesn’t make the rattlesnake morally better than the horse. It just means that the rattlesnake is better adapted to surviving in the desert.

And David Henderson brings it closer to home, citing Stalin and street gangs as examples of how, as the most ruthless, they were the fittest for survival in their human jungles, but that those jungles provide

no protection of the rights of someone who simply wants to go about his or her business peacefully. Peaceful, productive people are in fact sitting ducks waiting to be picked off by the violent.

Private Property Rights

To understand what is fit and who that makes fittest, it is most useful to return to the sine qua non of capitalism: private property rights.

Private property prevents the physical invasion of a person’s life, liberty, or property without his or her consent. By preventing such invasions, private property is an irreplaceable defense against aggression by the strong against the weak.By enriching most those who are most productive, capitalism makes those they deal with more fit for survival, as well. In other words, private property protects those fit for voluntary cooperation against those fit for the jungle.

Ludwig von Mises explained private property as the basis for “joint action and cooperation in which each participant sees the other partner’s success as a means for the attainment of his own,” creating a situation where people benefit from looking for ways to help you rather than ways to hurt you. That is also why, by enriching most those who are most productive (most fit for voluntary cooperation), capitalism makes those they deal with more fit for survival, as well.

Rothbard recognized that

the free market, therefore, transmutes the jungle’s destructive competition for meager subsistence into a peaceful co-operative competition in the service of one’s self and others… On the market, everyone gains. It is the market—the contractual society… that permits the “weak” to live productively.

He also described the jungle as where “the stronger crush the weaker” but markets as rewarding “those better at serving others.” And who would not rather be served than crushed?

So how should we characterize fitness for market economies?

Competition and Cooperation

Unlike the domination of some by others suggested by dog-eat-dog imagery, the marketplace rewards those who cooperate best in providing others what they want. Market competition—the freedom to offer cooperation on terms one is willing to accept—allows capitalism to create wealth out of otherwise latent abilities. And it favors those better able to serve others, however weak they may be in politics or social power.

Capitalism’s competition in production was captured well by George Reisman when he wrote:

Instead of… animals striving to grab off limited supplies of nature-given necessities, with the strong succeeding and the weak perishing, economic competition under capitalism is a competition in who can increase the supply of things the most… offering the best and most economical products their minds can devise… in the positive creation of new and additional wealth.

Zwolinski recognized the “peaceful economic competition that exists within industrial society” as a crucial “evolutionary advance from early forms of more violent competition.” William Graham Sumner saw that

markets turn the competition of man with man from violence and brute force into an industrial competition under which men vie with one another for the acquisition of material goods by industry, energy, skill, frugality, prudence, temperance, and other industrial virtues.

Ken Ewert added that

markets reward morality in the form of honesty, keeping commitments, entrepreneurship, and hard work turned to others’ advantage.

Innovation’s Impact on Poverty

These characteristics are dramatically different from those fittest to survive in an environment of arbitrary power. There, those most willing to use coercive power to reward friends and punish enemies are most likely to attain their desired results at someone else’s expense, in contrast to the fittest in markets, who make others their friends by their creative and productive willingness and ability to serve their desires.

Finally, to understand the emptiness of the dog-eat-dog critique of market competition, we need to return to its results. Steven Horwitz saw that

once people no longer needed permission to innovate, and once the value of new inventions was judged by the improvements they made to the lives of the masses… the poor began to live lives of comfort and dignity.

And Howard Baetjer, Jr., put it all together when he wrote:

In the market, people cooperate in a production process. Not limited to nature’s bare provision, they transform natural resources and produce an abundance of new goods. Each tries to provide what others want. All contribute; all gain from others’ efforts.

  • Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network.

    In addition to his new book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).