The argument for free markets, morality bursts efficiency by
Walter E. Williams.
Freedom can be preserved. Only if it is treated as a
supreme principle, which must not be sacrificed for any
particular Advantage, quote by F A Hayek.
Freedom's, first principle freedoms, first principle is
each person owns himself, the transition from socialism to
capitalism, and the preservation of capitalism.
Require what philosopher? David Kelly calls the
entrepreneurial outlook on life, which he describes in part, as a
sense of self ownership, a conviction.
That one's life is one's own. Not something for which one must
answer to some higher power once we accept self-ownership.
As a first principle, we readily discover, what constitutes just
and unjust conduct. Unjust conduct is simply any
conduct that violates an individual's property rights in
himself, when he himself, has not infringed upon the property
rights of another. Therefore, acts like murder.
Rape and theft, whether done privately or collectively are
unjust because they violate private property.
There is Broad consensus that government-sponsored, murder and
rape are unjust. However, not as much consensus
is reached regarding theft theft be.
Defined as forcibly taking the rightful property of one person
for the benefit of another. For individual freedom to be
viable. It must be part of the shared
values of a society and there must be an Institutional
framework to preserve it against encroachments by majoritarian or
government will. Constitutions and laws alone.
Cannot guarantee the survival of personal freedom as is apparent,
where western-style constitutions and laws have been
exported to countries not having a tradition of individual
Freedom. Us articulation of the right to
individual. Autonomy is found in our
Declaration of Independence. We hold these truths to be
self-evident. That all men are created equal
that they are endowed by their creator with certain unalienable
rights, that Among these are life, liberty and the pursuit of
happiness. That statement which played such
an important role in the Rebellion against England.
And in the establishment of the US Constitution was the
outgrowth of libertarian ideas of such thinkers as John Locke
Montesquieu and Sir, William, Blackstone.
Even in societies with a tradition of Freedom such as the
United States, the value supporting that freedom have
suffered erosion and have proven an insufficient Safeguard
against encroachment by the state as is so often the case
political Liberty, democracy has been used to redistribute income
and wealth. The redistribute of State in
turn has had a stifling effect on economic Liberty and has
reduced individual freedom. Ultimately the struggle to
achieve and preserve Freedom must take place in the habits
and minds of individuals and as admonished by the Constitution
of the state of North Carolina Article 1 Section 35, the
frequent reference to fundamental principles is
absolutely necessary to preserve the blessings of liberty.
It is those fundamental principles that deliver economic
efficiency and wealth, not the other way around.
Fundamental moral principles or values, are determined in the
arena of Civil Society value such as Thrift hard, work,
honesty, trust, and Cooperative Behavior based on shared Norms,
are the key to improving The Human Condition and provide the
undergirding for a free market economy.
Just as important are such social institutions, as respect
for private property, sanctity of contracts, educational
institutions, clubs Charities, churches.
Is and Families. All of those institutions
provide the glue to holds Society together in terms of
common values and provide for the transmission of those values
to successive generations to often informal institutions and
local networks are trivialised and greater favor is given to
the intellectuals narrow conception of what constitutes
knowledge and wisdom. The importance of informal
networks. Such as friends church members,
neighbors and families cannot be underestimated.
As demonstrated. In the following example of
small proprietorships, the critical determinants of a
proprietor success. Our perseverance character,
ability, and other personal characteristics Banks.
Seldom Finance the establishment of such business.
Most small businesses are financed through friends and
family the And is that those are the people who have the lowest
cost in acquiring the necessary information about the
Proprietors characteristics, deemed critical for Success.
Also, friends and family, who lend the proprietor money.
Have a personal stake in the business and have an incentive
to moderate, their likely bias in favor of the borrower.
Clearly a formal lending institution could query friends
and relatives. However, the information
obtained would have greater bias because friends and relatives
would not have sufficient stake in the business to offset any
personal bias. They had in favor of the
borrower. Institutions and wealth, fa
Hayek refers to the rules of several property, determined by
traditions and values. Those rules consisted in what
David Hume called, the stability of possessions transference by
consent and the keeping of promises Nations that have
respected. The rules of several property
have produced, social and economic climates far more
conductive to the welfare of their citizens.
The Nations who have failed to Tact property rights.
People in countries with larger amounts of economic freedom,
such as the United States Canada Australia, Hong Kong, Japan and
Taiwan are far richer and have greater human rights
protections. Then people in countries with
limited free markets, such as Russia, Albania China, and every
country in Africa. The role of private property and
free markets in. Creating wealth is often
overlooked factors such as natural resource endowment,
population size and previous conditions, colonialism are
claimed to explain wealth yet. Those factors cannot explain
human betterment. The United States and Canada
have relatively small populations, abundant national
resources and are wealthy. However, if low population
density and abundant natural resources were adequate,
Explanations of wealth. One would expect the former
Soviet Union and countries on the continent of Africa and
South America to be wealthy. Instead, the former Soviet Union
Africa and South America are home to many of the world's
poorest and most miserable people.
A history of colonialism is often given as an excuse for
poverty. But that is a bogus hypothesis.
The world's richest country. The United States was formerly a
colony Canada, Australia and New Zealand were colonies and Hong
Kong remains a colony, a far better.
Explanation of wealth are the values and traditions that
produce the rules of several property.
Economics, is not an independent variable, whose laws are
unaffected by the Institutional framework, within which it
operates, economic efficiency is a byproduct of pre-existing
cultural and moral norms. The intellectual defense of
Liberty, all too often Defenders of free market, capitalism base.
Their defense on the demonstration that capitalism is
more efficient in terms of resource allocation, and hence
leads to a larger bundle of goods, then socialism and other
forms of statism. However, as Milton Friedman
frequently points out economic efficiency, and greater wealth
should be promoted as simply a side benefit of free markets.
The intellectual defense of free market capitalism.
Them should focus on its moral superiority.
In other words, even if free enterprise were not more
efficient than other forms of human organization.
It is morally Superior because it is rooted in voluntary
relationships rather than force and coercion and it respects the
sanctity of the individual. The wealth created by free
market capitalism also cultivates Civil Society, for
most of human history, individuals have had to Simply
eke out a living with the rise of capitalism and the
concomitant rise in human productivity, people were able
to satisfy their physical needs with less and less time.
Economic progress, made it possible for people to have the
time to develop spiritually and culturally.
The rise of capitalism enabled. The gradual extension of
civilization to greater and greater numbers of people, as
The Wealth of Nations grew people had, the means to become
educated in the liberal arts and to gain greater knowledge about
the world around them. The rise of capitalism enabled.
Ordinary People to attend the Arts, afford Recreation and
contemplate more fulfilling an interesting life activities and
engage in other culturally enriching activities.
That Formerly only within the purview of the Rich D.
Mystification of the state AV dicey 1914 page, 257 wrote The
Beneficial effect of State intervention, especially in the
form of legislation is direct immediate.
And so to speak visible whilst its evil, effects are gradual
and indirect and lie outside our site.
Hence, the majority of mankind. Kind must almost of necessity,
look with undue favor upon government intervention.
This natural bias can be counteracted only by the
existence in a given Society of a presumption or Prejudice in
favor of individual liberty. That is of laissez-faire.
One can hardly determine the casualties of War simply by
looking at survivors. We must ask what happened to
those whom we do not see. Similarly when evaluating
intervention is public policy. We cannot evaluate it simply by
looking at its beneficiaries. We must discover its victims.
Most often. The victims of public policy are
invisible to Garner greater public support against
government command and Control, we must somehow find a way to
make those victims visible. In all interventionist policy.
There are those who are beneficiaries and those who are
victims. In most cases.
The beneficiaries are highly visible and the victims are
invisible. A good example, is the minimum
wage law. After enactment of an increase
in the minimum wage law politicians accompanied by
television Crews. Readily point to people who have
benefited from the legislation. The beneficiaries are those with
a fatter paycheck. Thus the politician can lay
claim to the wisdom of his legislation that increased
minimum wages. Moreover.
The politician is also a beneficiary.
Since those now, earning higher wages will remember him.
When election time Comes Around by parading minimum, wage
beneficiaries across the stage. Those who oppose minimum wage
increases can be readily portrayed as having a callus
mean-spirited. Disregard for interests of
low-wage workers. A political strategy of those
who support Liberty should be. That of exposing the invisible
victims of minimum wage laws. We need to show those who have
lost their jobs or do not become employed in the first place
because their productivity did not warrant being employed at
the minimum wage. We should find a way to
demonstrate how jobs destroyed by the minimum wage such as
Busboys gasoline, station attendants, and movie Usher's.
We must show how marginally profitable firms have been.
Forced out of business, they'll surviving firms may have the
same number of employees. We should show how Capital was
artificially substituted for labor as a result of higher,
mandated wages and how firms have adjusted their production
techniques in order to economize on labor.
The particular adjustments firms.
Make in response to hire mandated wages are less
important than the fact that adjustments will be made.
A more dramatic example of the invisible victims of
interventionist, State policy can be found in the regulation
of medicines and medical devices.
As in the case of the Food and Drug Administration, FDA in the
United States, essentially FDA officials can make two types of
Errors. They can err on the side of
under caution and approve. A drug with dangerous
unanticipated side effects, or they can err on the side of over
caution. Not approving a useful.
Safe drug or creating costly and lengthy, drug approval
procedures. Errors on the side of under
caution lead to embarrassment and possibly loss of
bureaucratic careers and promotions.
Because the victims of unsafe drugs will be visible through
new stories of sick. People Congressional
investigations and hearings. However errors on the side of
over caution through extensive delay in the approval of drugs
as in the case of propranolol, sir, Peta and Other Drugs,
impose virtually no costs on the FDA big.
Of FDA errors, on the side of over caution are mostly
invisible to the press, the public and politicians.
Those victims should be made visible once the FDA or some
other approving agency. Approves a drug widely used
elsewhere with no untoward effects.
We should find people who died or needlessly suffered as a
result of the fda's delay. For political efficiency.
We cannot simply offer intellectual arguments.
We must get pictures and stories of FDA victims, in an effort, to
appeal, to the sense of fair play.
Decency and Common Sense among the citizenry, but there was
also We Roll for intellectual arguments in the sense of
teaching, people that any meaningful use of safe.
Must see safety as a set of trade-offs, rather than a
category. The attempt to get a safe drug
means that people will die or needlessly suffer during the
time. It takes to achieve greater
safety. That toll must be weighed
against the number of people who might die or become ill because
of the drugs earlier availability, and Ended
unanticipated. Harmful, side.
Effects people should also be taught to understand that if a
hundred percent safe drug has ever achieved, it will be the
only thing in the world. That is 100% safe.
Another area of state interventionism which
particularly applies to less developed Nations is
restrictive, import laws and regulations restricting foreign
imports. As a means to save jobs.
Sounds plausible, adding to the appeal of restrictive trade
policy is the fact that its beneficiaries are highly visible
while its victims are invisible. Using an example of the American
Experience, may suggest a political strategy.
Most people fully understand that import restrictions raise
the cost of products, but may have little understanding of its
systemic effects. Arthur Denso of the center for
the study of American Business, found that voluntary restraints
on imported steel, save nearly 17,000 jobs in the steel
industry. However, the higher steel
prices. Thing from the restraints went
to a loss of 52,000 jobs in American Steel, using
Industries. On balance steel restrictions
led to a net loss of 35,000 400 jobs.
The process is easy to understand.
Caterpillar company uses steel to produce heavy construction
equipment, trade, restrictions caused higher steel prices that
in turn raised caterpillars production costs, higher costs
made caterpillar less competitive in both domestic and
international markets, which led caterpillar to It's labor force,
as a result. We see more Japanese and Korean
produced, heavy equipment in the United States, importing
finished products. By the way, is just another way
to import Steel. In addition, to causing a net
loss of jobs, trade, restrictions are costly to
Consumers. According to estimates, the
Reagan administration's voluntary, import restraints on
Japanese cars, increase the price of Japanese cars sold in
the United States by $900 and increase the price of US cars by
350, for a total cost of the American Consumer of 4.3 billion
dollars that price tag translates into a cost of Two
hundred thousand dollars per year for each job saved in
Detroit. It would have been cheaper to
have given each Detroit Auto worker laid off by Freer trade,
a check for sixty thousand dollars a year so they could buy
a vacation residents in Miami. That way collectively, we could
have been better off to the tune of 140,000 dollars per job
saved. Of course, that policy choice
would not have been politically feasible because the cost would
have been apparent and taxpayers would have refused to pay for
the free vacation. It is not only Auto Workers.
Him. The nation could have made the
trade according to the Federal Trade Commission.
Quotas on textile products from Hong Kong cost consumers
thirty-four thousand five hundred dollars per year for
each job saved for American textile workers earning seven
thousand six hundred dollars to ten thousand seven hundred
dollars annually. Identifying the invisible
victims of trade restrictions may suggest a political strategy
to fight such restrictions one. Such strategy is to organize
companies, adversely affected by import restrictions such as
steel using companies in the case of u.s.
Import restrictions on Steel. Justice process burst results at
the heart of most interventionist policy is a
vision of Justice. Most often this Vision evaluates
the presence of Justice. By looking at results, social
justice has considerable appeal. And as such as used as a
justification for interventionist, statism, there
are several criticisms of the concept of social justice that
Hayek has answered. Bill, but Defenders of personal
Liberty must make a greater effort to demystify the term and
show that Justice or fairness. Cannot be determined by
examining results. The results.
People often turn to, in order to determine the presence or
absence of Justice are educational and occupational,
status income, life expectancy and other socioeconomic factors,
but Justice or fairness cannot be determined by results.
It is a process question. Consider, for example, that
three individuals play a regular game of poker.
The typical game outcome is individual a when 75% of the
time, well individuals, B and C, when 15 percent and 10 percent
of the time respectively by knowing the games result.
Nothing unambiguous can be said about whether there has been
poker Justice. Individual a is
disproportionate. Winnings are consistent with his
being an astute player clever cheater or just plain lucky.
The only way one can determine whether there has been poker,
Justice is to examine the game's process process questions would
include. Did the players play?
Voluntarily were the poker rules, neutral and unbiased Lee
applied was the game. Played without cheating.
If the process were just affirmative answers would be To
those three questions. And there would be poker Justice
irrespective of the outcome. Thus Justice is really a process
issue. The most popular justification
for the interventionist state is to create or ensure fairness and
Justice in the distribution of income.
Considerable confusion, obvious station and demagoguery
regarding the sources of income provide status with copious
quantities of ammunition to justify their redistributionist.
Agenda income is not distributed in a free Society, income is
earned people serving one another.
Through the provision of goods and services generate income.
We serve our fellow man in my RAID ways.
We bagged his groceries teaches children, entertain him and heal
his wounds by doing. So we receive certificates of
performance in the United States.
We call these certificates dollars elsewhere.
They are called pesos Frank's marks again and pounds.
Those certificates stand as evidence proof of our service,
the more valuable our service to our fellow man as he determines
the greater number. Which certificates of
performance we receive and hence the greater our claim on goods
and services. That free market process.
Promotes a moral discipline that says, unless we are able and
willing to serve our fellow, man.
We shall have no claim on what he produces contrast that moral
discipline to the immorality of the welfare state.
In effect. The welfare state says, you do
not have to serve your fellow man through intimidation threats
and coercion. We will take what he produces
and give it to you. The vision That season come as
being distributed, implies a different scenario.
For the sources of income, never made explicit the vision that
sees income as being distributed, differs little,
from asserting that out there. There is a dealer of dollars.
It naturally leads to the conclusion.
That if some people have fewer dollars than others.
The dollar dealer is unfair. He is racist, sexist, or a
multinational list. Therefore Justice and fairness
require a re dealing income distribution of dollars.
That way, the ill-gotten gains of the few are returned to their
rightful owners. That vision is the essence of
the results, oriented view of Justice underpinning, the
welfare state. Side note.
Welfare state doesn't just mean money given to the poor military
industrial complex, welfare state.
The bankers, getting troubled, asset relief, protection money,
welfare state, and so on and politicians and the lobbyists
whatnot. People who criticize the
existing distribution of income as being unfair and demand
government redistribution are really criticizing the process
whereby income is earned. Their bottom line.
Is that millions of Individual decision makers, did not do the
right thing. Consider the wealth of
billionaire, Bill Gates. The founder of Microsoft dates
earned billions, because millions of individuals
voluntarily spent their money on what they wanted his products
for someone to say that Gates is income, as unfair, is the same
as saying that decisions of millions of consumers are wrong
to argue that Gates is income, should be forcibly taken and
given to others. Is to say that somehow third
parties have a right to preempt voluntary, decisions made by
millions of Traders. When sources of income are
viewed more realistically, we reach the conclusion that low
income for the most part is a result of people not having
sufficient capacity to serve their fellow man.
Well, rather than being victims of an unfair process, low
income, people simply do not have the skills to produce and
do things their fellow, man. Leave values.
Seldom do we find poor highly productive, individuals or
nations? Those who have low incomes tend
to have low skills and education and hence low productive
capacity. Our challenge is to make those
people Nations more productive. One last side note money is not
the only way to measure the value of a person.
Another explanation of low income is that the rules of the
game have been rigged. That is people do have an
ability to provide goods and services valued by their fellow,
man, but are restricted from doing so, among those rules are
minimum wage laws occupational and business, licensure laws and
regulations and government-sponsored,
monopolies, henceforth. And Argument for free market
capitalism, is that it is good for low-income low-skilled
people. Yeah, I believe he is wrong in
that. It's the only way I guess he
didn't say it's the only way to measure value you could look at,
you know, say someone makes a bunch of videos and they have 10
million hours of watch time. But no one's necessarily gone
out of their way to make donations.
That doesn't mean well, number of dollars is the only way to
value that person. So I would disagree with Walter
Williams there, the vision of black markets.
We should always keep in mind the resiliency of Gets despite
the efforts of socialist regimes markets tend to survive to one
degree or another. They are an irrepressible part
of human nature. As Adam Smith in 1776 wrote.
It is the necessary. Certain propensity and human
nature, to truck barter and exchange.
One thing for another during the 70 years of the Soviet
experiment, with massive attempts to suppress markets,
including jail banishment. Ant and death markets in one
form or another survived. The conditions, for the
formation of markets are always present and explain their
resiliency. Those conditions are one private
ownership of property to interaction between people who
place different valuations on goods and three individual will
and self-interest. Those conditions give rise to
markets, be they legal or illegal black markets.
According to some estimates up to 84% of Soviet people purchase
goods and services through the black market or fart, Soul
Shiki. The farts of Shiki was also a
source of additional employment and Hanson come for as many as
20 million Soviet citizens. According to Automotive news
1985. 80% of Soviet citizens used black market, mechanisms
for auto repairs and another 30% purchase gasoline and parts from
Black Market Distributors Soviet officials could never eliminate
black markets and one doubts that they want to do.
After all the Soviet system may have survived as long as it did
because some of its more uglier consequences were mitigated by
the presence of black markets. Given the periodic short ages of
the Necessities such as food and clothing.
There may have been uncontrollable social disorder,
if Soviet citizens had to do without rather than have a black
market Outlet to which they could turn to for Relief, the
Soviet experience proves that man is by nature a capitalist,
the transition from socialism to capitalism requires, only that
human nature be permitted to flourish conclusion.
The struggle to extend and preserve free markets must have
its primary focus. The moral argument State,
interventionist stand naked, before, well-thought-out moral
Arguments for private ownership of property, voluntary exchange,
and the parity of markets, people readily understand, moral
arguments on a private basis. For example, one person does not
have the right to use Force against another to serve his own
purposes. However, However, people often
see government redistribution as an acceptable, use of force in a
democratic welfare state that coercion is given an aura of
legitimacy. The challenge is to convince
people that a majority vote does not establish morality and that
free markets are morally Superior to other forms.