Where Politics Divide, Markets Unite

While politics is zero-sum and all-or-none, voluntary exchange is positive-sum and allows everyone to enjoy whatever they prefer and avoid whatever they don’t.

When Discount Tire Company announced a $1 million donation to defeat Arizona legislation that would legalize marijuana use, they sparked outrage and a boycott of their tires. It seems to have been a poor business move. In fact, if their goal is to attract as many customers as possible, why even speak up about an issue that could only distance themselves from a significant chunk of the tire-buying population? What do tires have to do with the legal status of marijuana anyway?

Contrast the divisive nature of politics to the unifying and cooperative nature of individuals interacting in markets.

And you have certainly noticed the hate and vitriol of the current presidential election. How many times have you seen a post on social media announcing the unfriending of any supporter of the other candidate? Friends, families, and communities are torn apart over silly political news cycles that fade so fast.

Of course, there’s nothing inherently wrong with using social media or your sphere of influence as a business owner to speak on ideological matters. But I would recommend against taking it so far as to lose friendships or customers. It’s counter-productive in two ways: you diminish the size of your audience such that future ideological statements will find fewer ears, and the methods that would end friendships aren’t rhetorically effective anyway.

It’s the equivalent of playground threats like “then you won’t be invited to my birthday party!”

Politics vs. Markets

Contrast the divisive nature of politics to the unifying and cooperative nature of individuals interacting in markets.

While politics is zero-sum and all-or-none, voluntary exchange is positive-sum and allows everyone to enjoy whatever they prefer and avoid whatever they don’t.

Political outcomes involve mandates that everyone must do this or nobody can do that. Market outcomes involve no such mandates--no matter how much Jeffrey Tucker enjoys his Tuft & Needle mattress, we are all free to choose a different one.

Recognizing these differences requires just a basic understanding of economics. Economic principles like scarcity, opportunity cost, the gains from trade, comparative advantage, and the division of labor are a great start. You can learn about them for free in this new online course: Economic Principles: Cooperation and Prosperity.

FEE's New Course

You’ll learn the solution to the Diamond-Water Paradox, which still confuses some people even today, whenever somebody asks why school teachers earn less than professional athletes.

In FEE's new course, you'll come to admire the cooperation and spontaneous order of the market economy.

You’ll learn to spot and avoid the Broken Window Fallacy, which is often committed in the wake of natural disasters by uninformed economics writers.

You’ll see the beauty of the division of labor--how we all enjoy a huge amount and variety of goods and services despite only performing one relatively small set of tasks.

You’ll grasp consumer sovereignty, or how consumer preferences really guide all production in the economy because consumers ultimately determine the profitability of any production process.

You’ll understand the importance of the opposite of profit in the market economy: losses. Losses allow us to quickly reshuffle productive resources to profitable, wealth-creating uses.

You’ll see the consequences of all kinds of government interventions in the economy. Price controls, regulations, and wealth redistribution schemes (for individuals or businesses) only stifle what entrepreneurs can do for society.

You’ll come to admire the cooperation and spontaneous order of the market economy. Even the production of a simple good like a pencil requires the cooperative efforts of millions of people across the globe over many years.

In the end, you’ll see how freer economies have higher standards of living, longer lives, and less social unrest because people's needs are being met.

When individuals are free to interact in the market economy, it leads to some spectacular results: cooperation and prosperity. When the same individuals encounter each other in a political way, it only leads to disaster and divisiveness. Hopefully, your new understanding of these basic economic principles will change your view of the world to be more vibrant, more complete, and more appreciative of human diversity, cooperation, and potential. Get started today.

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