Friday, November 18, 2011

The Market Miracle


I'm always surprised when people are skeptical about "the miracle of the market." It is an amazing thing that I can, with great confidence, find pretty much anything I want, almost whenever I want. A device that allows me to communicate instantaneously with a person half-way across the state, or the world? Done. A haircut in every imaginable fashion? No problem. A quick hamburger? An expensive hamburger? A vegetarian hamburger? Right away sir. But I don't wake up in the morning and plan these things. I don't email the Department of Fulfillment about my pending needs. I don't email McDonald's that I'll be dropping by. I just do it, and it's there. To me, that's a miracle. 

The other thing that is miraculous, to me, is it is voluntary. I want to buy a car, I can buy a car. No one forces me to buy from a specific vendor nor a specific model. Someone wants to buy my investment advice, they can. Or they can decide not to. I can decline to offer my advice to someone if the price or other terms aren't acceptable. Because I think this voluntary exchange is an integral part of the liberty we enjoy as Americans, by and large, I'm against things that restrict my freedom to engage in voluntary transactions. 

I reject your straw man choice between a robust regulatory state and unfettered capitalism. Free markets, at least in my mind, do not mean unrestricted, or completely unregulated markets. There are public goods, the commons, to be protected. There are community needs that government is uniquely qualified to serve. Rules need to be set, in many cases, by government. 

I am not one to deny the government can do amazing things. In the social arena the civil rights movement is a miracle of government intrusion. The Internet is an outgrowth of the DARPA net, a government funded project to create a computer network that could survive a nuclear attack. I regard the National Park Service as a completely uneconomic, waste of resources and one I will fight vigorously to keep uneconomic and wasteful.

So it's a matter of degree, and who you trust. Me, I tend to trust markets more than governments. Markets fail and governments fail. Markets succeed and governments succeed. But generally, from my perspective, markets succeed more often and more effectively and has the advantage of maximizing my freedom of choice. 

I hope the reason I trust markets more is the evidence. When Jimmy Carter de-regulated the natural gas industry and the airline industry there were increased choices and lower prices for consumers. To me, that's a good thing. When the federal government decided to become a bigger factor in homes, secondary education and medicine, prices went up. I think that is a cause and effect. I'm sure you can point to instances where the markets failed and government succeeded, as can I. But again, from the evidence I have seen, or have chosen to see, it seems markets generally serve people better.


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