Monday, November 5, 2012

Let us Trade

This article was another reminder of how incompetent legislators and journalists are when it comes to matters economic.

This isn't rocket science. Suppose superstorm Sandy hits New York, where Paul the Policeman works. Living in neighboring Pennsylvania are Sally the Saint, and Jared the Jerk. Sally the Saint, on hearing of the plight of new yorkers, packs a truck full of blankets, food, and gasoline to give to the needy. Jared the Jerk does the same, but only because he thinks he can make a killer profit by selling them to desperate new yorkers. Jared's greed is thwarted by Paul the Policeman, who phones him and informs him that if he tries to carry out his nefarious plan, he will face hefty fines, as well as a likely prison sentence.

The end result: One less truck full of vitally important goods for the hapless and homeless, and one policeman who, rather than spending his time helping these people, is spending his time preventing trucks of goods from coming into New York. Yes, if Jared the Jerk has his way, new yorkers will have less of those pieces of paper that we call money, but clearly, at this point, they would prefer to have food and fuel more than pieces of paper, otherwise they wouldn't voluntarily trade them away.

The essence of capitalism is that it takes something inherently bad, greed, and channels it into productive activities.  In true capitalism, the way you get money is by providing something of value to other people. Non-capitalist ways of getting money, on the other hand, involve stealing, lobbying the president to favor your business with billions of dollars in stimulus money, or doing any number of wasteful things.

Liberals love to accuse conservatives of having Gordon Gekko philosophy and motives. When they use that argument with so-called price gouging, however, they're largely missing the point. Greed is as powerful and as ubiquitous as water. Water can shatter, kill, and corrode. Greed can do the same to societies and individuals. Both are realities that must be dealt with, and it makes as much sense to outlaw capitalistic greed as it is to build New Orleans below sea level and hope that the old levees will hold. Wouldn't it be better to build irrigation, and hydropower plants, and let the water do at least some useful things? This analogy is far from perfect, for obvious reasons, but there's something to be said for recognizing realities. For all of their supposed intellectuality, Democrats often fail to do this when reality contradicts their instinctive sense that if someone is making a large profit, it must have been ill-gained.

"Give us food or let us trade" was the protest of North Korean market women just a few years ago. They may not live in a totalitarian country, but new yorkers could justifiably protest with the same chant. Government and charitable assistance in the wake of any disaster are wonderful things, but when they fall short, it makes no sense to prevent market assistance.