Russell Shannon Is a professor, Department of Economics, College of Industrial Management and Textile Science, Clemson University.
This article first appeared as part of a weekly series in Greenville News, Greenville, South Carolina.
In the clutter and bustle of our daily lives, how often we overlook or ignore the underlying reality of current situations! In the sphere of economic policy, it may be helpful, then, to recall a famous old tale, the fable of "Tom the Table Maker."
Once upon a time, so the story goes, in a cozy little bungalow on the edge of the Forest there lived a table maker named Tom Smith, his wife Eve, and their three happy children. Their lives were good, fulfilling ones, for while Eve tended the house and cared for the children, Tom worked in his shop making tables. And what handsome, useful tables Tom’s were! Tom carefully crafted them so they were sturdy and strong and then stained them with a deep, dark walnut finish whose glow reflected the young workman’s pride.
Tom’s tables were popular in the Neighborhood. People came from miles around to buy them and often returned for more, because the tables were useful in many ways and also made fine presents. People who received them as gifts were always glad to get something both practical and attractive.
Then one day, so the fable goes, something sad occurred. People stopped buying Tom’s tables. They did drop in to Tom’s shop from time to time for a friendly chat, but when they left, they were usually empty-handed.
Now Tom Smith was the jovial, optimistic sort. He enjoyed making his tables so much that he just kept at it. But gradually he began to realize that he was approaching the very brink of disaster. Unless he could sell his work, Eve would be unable to put food on their table. His optimism gave way to despair. "Alas and alack!" Tom thought. "What am I to do?"
One evening after giving all the children a kiss and bundling them off to bed, Eve sat down at the fireplace next to Tom. "I know you’re worried," she said. "What’s wrong?" "No one wants my tables any more," Tom replied sadly.
Eve put her hand gently on his arm. "I know," she said; "I heard people talking in the Market today. Someone named Mot on the other side of the Forest is selling tables now. I hear they aren’t as sturdy and beautiful as yours, but Mot sells them a lot cheaper and so our Neighbors are buying them."
"Whatever will I do?" Tom asked in dismay. "I just can’t bear to compromise the quality of my tables." He sat rapt in thought for several minutes. Then his eyes lit up and he said to Eve, "Perhaps I should go to our Government in Dryington up on the Potogold River. The people there have power to stop the sale of tables from the other side of the Forest."
"True, you could do that," Eve replied, "but it would put Mot out of a job. I hear he’s got a wife and children to feed, too. Besides that, our Neighbors seem happy to buy his tables, since now they have more money left over to buy other things." "Yes," Tom agreed, "you’re right. But my tables are so handsome and so durable, it seems awful not to produce them. Maybe I could get our Government to buy some. They could be put in a museum somewhere for people to admire, and they sure would come in handy if Mot ever quit producing tables."
"But where will our Government get money to buy your tables?" Eve asked. "You know, the Potogold is really only water. Our Government will have to raise taxes to get the funds, and then our Neighbors won’t be able to buy as many other things."
"Once again, you’re right, Eve," Tom admitted. "But now I have really exhausted all my resources. Our children will starve. We won’t be able to meet the mortgage payments on our cozy little bungalow."
"You’re really not thinking about what your true resources are," Eve said, patting Tom on the shoulder. "Think about our farmers. If people stop buying the wheat they grow, what will they do? They’ll grow corn, or oats, or tomatoes, or barley, or something else instead, People who weave cloth and make clothes can make something else people want, like buckets or bricks. Do as they do. Make chairs and benches instead."
"It will take time," Tom said, "to master the art of making chairs and benches. We’ll still have to tighten our belts."
"We can stand that for a while," Eve said cheerfully, for both she and Tom were actually just a bit stout anyway. "In the end, you’ll be making something people in the Neighborhood really want. That way, we’ll all be better off."
And Eve was right. Of course, the Smiths did have to live on a leaner diet for a while, and once they almost missed the mortgage payment. Eventually, though, Tom was turning out such finely crafted chairs and benches of such admirable design that he could barely keep up with the orders. The Neighbors were proud of the wares they took home to their families and friends. In fact, even Mot bought some with his newly acquired Neighborhood money. And once again the Smiths had plenty to eat and mortgage money to boot.
One evening, while Tom was relaxing by the crackling fire, his wife sat down next to him. She was quiet at first, but after a few moments, she became philosophical. "It seems to many who’ve inquired into the subject," she said, "that Government subsidies and trade restrictions almost always end up doing more harm than good."
She went on: "Many people don’t seem to realize it, but it’s really through individual initiative, open competition, and free markets that we are most apt to achieve the greatest wealth for Neighbors—or even Nations." And saying that, Eve Smith beamed proudly at her husband, who responded with a knowing nod.