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Utilitarianism

The Right to Bare Arms

Libertarianism and Fascism

Right is the Child of Law

It took a long time to recognize the truth behind what we now see as classical economics. The strange idea that by everybody doing what they wanted to do somehow everybody gets what they need more efficiently than asking them what they want and planning it. It is a very strange idea to get your head around in the first place but once you succeed it becomes a fascinating thought.

Even more counterintuitive than the basics of Adam Smith's ideas of classical economics and the advantage of the division of labour is the idea of comparative advantage, associated with David Ricardo. This teaches us, that no matter how absurd it seems nations that are less good at doing everything than their neighbours can still trade to the mutual benefit of each and all. I remember myself being blown away by those arguments, they work, they do make sense once you have the courage to accept them. After swallowing those two ideas it becomes very easy to accept that doing whatever you want to do will naturally lead to the best of all possible outcomes for each and all. Only, well, it doesn't. Pity, because otherwise it makes life so much easier, just do whatever you want to do and explain that everybody benefits. That is so convenient an idea that the fact that it doesn't work in either theory or practice does not get in the way. Enter the world of the ideologically empowered selfish bastards, or as they prefer to call themselves, libertarians.

The price mechanism and the law of comparative advantage are great. They work, in both theory and in practice. In practice they work less well because of the complexities of the real world and the imperfections of man but it is difficult to argue that they work. Economic activity has never been on as high a scale since we opened everything up to the free markets. True there are poor people who are suffering, but there always are, and anyway, we are not suffering so who cares, the poor are probably lazy and deserve it or perhaps their poverty is the price that must be paid for efficiency. Economic activity is not connected with the Earth's ability to absorb it, but hey, this invisible hand is powerful, maybe it will magic up some more clean fuel whenever the oil runs out, so far so good, we have not totally destroyed everything yet. The invisible hand found coal when England ran out trees, it found oil when America ran out of whales to kill so perhaps it will find something else when the time comes. So far so good. It didn't help the people of Petra, Chacco canyon or Easter Island when they ran out of trees but those guys didn't believe in the power of classical economics, so they deserved to lose their civilizations anyway, they were probably evil kingdoms or some such, not true democratic freedom loving capitalists. And of course being rich doesn't make you any happier, but then what does?

Free market economics is very bad at conservation. It does nothing to protect the supplies of products in short supply. Market forces will happily drive species extinct. The North Sea cod fishery is at the point of total collapse and yet on television each day I see advertisements for cod fish fingers (two for one at Iceland) and cod liver oil medicines. Why don't I see advertisements telling me to switch to something else instead to let the stocks recover? Why is there no advertising telling me to switch to a cheaper type of fish? The fact is that cod is priced by how much it costs to catch, process and market. It is still cheap to catch right up to the point where there is virtually no cod left. This is normal free market economics. Without intervention cod, anchovies and tuna will become extinct. They don't belong to anybody until they are caught. So why let somebody else catch the last ones? Free market economics does not maximize utility or human satisfaction. Leaving everything up to the market will not eliminate shortage, hunger, poverty, greed, unhappiness, conflict, strife or misery. Neither will it maximize happiness, freedom or even efficiency. Free markets are for communities what prevailing winds are for sailing ships, they are a source of power and drive, but not direction. The prevailing winds of trade blow a few degrees adrift of the course of human happiness, we need to keep a hand on the rudder. Surrendering to market forces is merely suggesting that you accept that where you wash up is where you wanted to be, and accepting that as a matter of faith.

Classical economics works, to a degree, but where did classical politics come from? The idea seems to be an extension of free-market principles, which they accept without question. It must surely stand to reason that letting everybody do whatever they want will lead to the greatest possible level of freedom and overall satisfaction? No. It doesn't. It only seems to work by the extension of the analogy of classical economics. If you accept classical free market economics in unadulterated form then you develop a mindset that is willing to accept the extension of the idea of the free for all being in the best interests of all and each. But where is the mechanism? Where is the invisible hand that maximizes over-all utility? I see no evidence of it.

Nobody wants to breathe polluted air that contains chemicals that stunt the intelligence of children. But adding lead to fuel makes cheap fuel work as well as expensive fuel. So in a free market what happens? People complain, most people buy the cheaper leaded fuel as long as it is available on sale, some feel guilty about doing so, most think that it is “an issue of individual liberty” and buy cheaper leaded fuel, some then ask the Lord to forgive them. When the politicians (boo hiss) make leaded fuel illegal everybody has what they want, no lead pollution and the same price fuel as that bastard down the road with no conscience. The unseen hand of unfettered selfishness does not get the job done. The application of democratic will does. Naturally those that like to feel put upon by governments, politicians and their fellow man in general blame every wheeze of their old cars on the new fuel but that is only one step away from blaming your insomnia on the government's mind rays.

In economics when everybody pursues their own selfish interests an unintended consequence is that an efficient distribution of resources is achieved. But that lesson cannot be extended to every sphere of life. No more than the law of gravity can be applied to stock market prices, often what goes up never comes down. Acting selfishly harms the interests of others, and often it does more harm to the bystanders than it gives benefit to the selfish one. One smoker in a cinema. One streaker delaying a football match.

Real life is far more complicated than any model of economics. Real life is far more complicated than economic real life. The knee jerk reaction that freedom is good and so perfect freedom is perfectly good is nonsense. Freedom cannot be maximized for a society as a whole. The best we can do is to optimize freedom. Having perfect freedom is bowing down to the tyranny of every selfish bastard, the tyranny of the permanent minority veto on all issues. Perfect freedom is chaos. When none are constrained all suffer. Nobody gets what they want when society throws away its power to make rules.

Socialism and social democracy are often portrayed as paternalistic. I don't see that as an insult or a weakness. I would much rather live in a world that cares for me as a child than a world that treats me as a minuscule component of an inert and meaningless audience or market. I am sure the beggar I passed in the street yesterday would prefer to be cared for a little more and would not be overly concerned if his inalienable right to carry a machine gun in McDonalds or protect his mansion with landmines was infringed a tad. Freedom is not the only thing worth having, and the optimum amount is not the same as the maximum amount.

Libertarians distrust the power of government. THEY imposing their will on US. But the government in a democratic country is not they, it is us. Hamstringing the government and preventing it from attempting to do anything that we the people want it to do is giving they, the minority, a permanent veto. Constitutions that limit the power of government with artificial limits are draconian. Majorities should have the power to act, not have that power limited by men who died two hundred years ago. More people have their freedoms curtailed by the limits to the actions of their government than any people is ever likely to freely impose on itself.

© 1999 - 2008 by Martin Willett.

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