Free Market Activity Is a Win-Win Process
Books and articles by the dozen bemoan the gap between “winners and losers” in today’s economic boom. Even writers not associated with socialism have joined the moaners’ chorus. For example, conservative Edward Luttwak writes in his new book, trendily titled Turbo-Capitalism: Winners and Losers in the Global Economy, “living in a country that so greatly respects and admires high-earning winners, losers find it hard to preserve their self-esteem.”
Let’s ignore the psychobabble and look at this idea of winners and losers. In games, the object is to win, which means to fulfill some arbitrary conditions defined by the rules of the game. Because one player or team wins, the other loses. The victory and loss are not independent events. That’s why we say the Yankees beat the Padres in the World Series.
Writers who describe the economic process in terms of winners and losers indicate, intentionally or not, that the same zero-sum principle applies: namely, that people who make high incomes are responsible for others’ making low incomes. But how can that be? Is Bill Gates the reason that some people earn only the minimum wage? Does anyone live in poverty because Sam Walton got rich?
That’s not only untrue, it’s worse than untrue. The fortunes of Gates, Walton, and anyone who earns a high income are the consequences of their having enriched a multitude of people considerably less wealthy than themselves. You have to produce things people want if you intend to get rich (unless you find a way to milk the taxpayers). Market activity is a positive-sum, or win-win, process. In a free (or free-ish) economy, the rich get richer by making the “poor” richer. If you don’t believe it, ask yourself where would you rather be “poor,” here or in India?
To be sure, people with acute entrepreneurial alertness or valuable skills and knowledge will do spectacularly well. By comparison, the people who lack those things will seem to be losers. But they aren’t. And since there is unlimited wealth yet to be created, anyone—if free—can have his shot at being a “winner.” Whatever is holding a particular person back, we can be sure it isn’t the people who have already succeeded.
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American collectivists have long wanted the government to nationalize the railroads. They finally got their wish in recent decades. As Gregory Bresiger shows, they should have been more careful about what they wished for.
What if family finances were run like the Social Security Trust Fund? William Conerly describes his imaginative method of financing his children’s college education without having to give up anything.
The Academy Award for the best movie in 1998 went to Shakespeare in Love. The script was co-written by Tom Stoppard, whose plays have a feature that sets him apart from most of the arts world: anti-collectivism. Norman Barry looks at the philosophy that underlies Stoppard’s work.
The market order has been credited for many good things. Andrew Cohen finds one more way it benefits us: it provides a foundation for friendship.
Antitrust law’s interference with business efficiency has long been documented by economists and legal scholars. What gets far too little attention is its immorality and injustice. D. T. Armentano demonstrates that the law fails the test of ethics too.
Ever since historian Richard Hofstadter wrote his book The Paranoid Tradition in American Politics, statists have had a convenient way to smear any uncompromising advocate of individual liberty and limited government. James Bovard takes a close look at the book, the thesis, and the author.
Medical treatment presents many complex ethical issues. State intervention in health care only makes difficult matters worse. Karen Selick discusses a case from Canada.
This month marks the centenary of the birth of the late W. H. Hutt, an important and prolific free-market economist. Richard Ebeling contributes an appreciation of Hutt’s long career.
Golf used to be a relaxing pastime. Then the environmentalists came along. Ray Keating explains.
Lawyers have long been jealous of their monopoly in the practice of law. George Leef describes the lengths to which the profession is willing to go to prevent people from obtaining legal advice outside approved channels.
Attempts by states to impede corporate takeovers are presented in humanitarian terms. But as Christopher Mayer explains, they are special-interest bids that undermine property rights.
The clash between academic freedom and freedom of association may seem irreconcilable—until a missing element is brought into the debate. A controversy at the University of Notre Dame prompts James Otteson’s discourse on rights real and imagined.
In the columns department, Donald Boudreaux distinguishes real false consciousness from false false consciousness; Lawrence Reed remembers hard-money man James Blanchard; Doug Bandow argues for voluntary voluntarism; Dwight Lee links conservation to speculation; Mark Skousen reminds us of what Say really said; and Charles Baird reads the California legislature the riot act about compulsory unionism for professors. Andrew Morriss wonders if a hidden fist is really necessary to protect the invisible hand and decides “It Just Ain’t So!”
Book reviews this month examine the federal government’s welfare state for Indians, the Great Depression, the importance of property, the lives of two lucky people, and the global environmental movement.
—Sheldon Richman
