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Unlike Democratic Voting, Markets Give You A Genuine Say.

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Peter Earle eloquently exploded the notion that voting in political elections is an exalted means of self-expression. Few myths are more lethal to liberty than that which equates freedom with majoritarian democracy – and no fallacy does more to fuel this myth than that which declares the essence of freedom to be the right to vote.

In reality, voting is an extraordinarily skimpy and muted means of giving voice to your individual values, hopes, concerns, and preferences. And the right to vote is certainly no great bulwark to protect your liberty.

Bondage by the Majority is Bondage Nevertheless

Nearly all people, regardless of their political and ideological stripes, vigorously reject this conclusion about voting. Even you, dear reader, likely resist it. Yet its truth cannot seriously be contested. In what meaningful way is your freedom protected if, as a result of an election in which you vote, 51 percent of your fellow citizens cast their ballots for a candidate who promises to raise your taxes against your will, to forcibly obstruct your ability to buy imports, and to prevent your teenaged daughter from competing for a summer job by offering to work at an hourly wage below the state-imposed minimum?

The fact that you were among the thousands or millions who cast a ballot in this election does nothing to make you more free than you would be had you not voted or had these impositions been foisted on you by a monarch.

The typical response to my observation goes something like this: “But at least each voter had a say!” To which I reply “Say what? What say?”

A Say that’s Virtually Silent

It’s true that you cast a ballot and that your vote was counted. But your vote – your “say” – was only the faintest of muffled whispers. If you voted for the losing candidate, your request for government not to intrude into your life in the ways promised by the victorious candidate is ignored. You must obey the commands that will now issue from the state. And these commands silence the very real say that you and your family would otherwise have had in the market.

With more of your income taxed away and with customs agents blocking your access to imports, you have less of a say in how your earnings are spent. With your daughter unable to offer to work for a wage below the state-imposed minimum, she has less of a say in choosing the kind of job she holds and in the specific terms of her employment.

Notice that the say that you have in the market is always real and effective. Unlike in political elections, if you prefer to dine this evening at a Japanese restaurant rather than at an Italian restaurant, you will dine at a Japanese restaurant. No one overrides or ignores your choice. And you don’t have to spend precious time and energy convincing a majority of your fellow citizens to expressly give you permission to dine at the restaurant of your choice.

Notice also that your say in the market is more articulate than is your say in political elections. By voluntarily spending your money on the spicy-roll combo, the signal that you send is precise and clear: this evening you want the spicy-roll combo and not any of the many other menu items. In contrast, by voting for candidate Smith rather than candidate Jones, the signal that you send is cloudy. Did you vote for Smith because of her opposition to tariffs or in spite of her opposition to tariffs? No one other than you – and certainly not Smith – knows.

Or perhaps you voted not so much for Smith as against Jones, whose promise to raise the minimum wage intensely frightens you. But if Smith wins, you and other voters get not only her opposition to raising the minimum wage – a policy position that you favor – you also get Smith’s policy positions on countless other issues, not all of which you support. Voting at best allows you to express your opinion about which candidate you prefer; it does not allow you to express your opinion on each of the many different individual issues that are at stake.

Preference-intensity Is Real and Important

Nor does voting allow you to express your preferences’ intensities. If you vote for Smith rather than Jones, you tell the world only that you prefer Smith to Jones. Your vote says nothing about how much you prefer Smith to Jones. Your preference for Smith over Jones might be intense or it might be tiny. Whatever it is, your vote doesn’t say.

The failure of voting to give voice to the intensity of each voter’s preferences is significant. Suppose that Smith wins 51 percent of the votes to Jones’s 49 percent. Suppose also that nearly everyone who voted for Smith has only a slight preference for Smith, but that nearly everyone who voted for Jones intensely prefers Jones to Smith. Is it then the case that Smith is the people’s preferred candidate? The correct answer isn’t obvious.

In your everyday life you of course experience the rank-ordering of your preferences – for example, you prefer to drive an SUV rather than a sedan. But you also experience the intensity with which you hold your preferences – your preference for an SUV over a sedan can range from enormous to negligible. And in everyday life you can express the intensity with which you hold your preferences – say, by willingly paying a much higher price for the SUV if your preference for that vehicle over the sedan is high.

In our one-person-one-vote system, you have no comparable ability to express the intensity of your preference for candidate Smith over candidate Jones. Your vote is mute about the intensity of your preferences.

Your Say in Markets Is Taken Much More Seriously than Is Your Say in Elections

My argument here is not that you should not vote. Rather, my argument is that you should not be duped into believing that voting is either the essential exercise of freedom or that the ‘voice’ you have at the polling place is remotely as clear, as loud, or as effective as is the ‘voice’ you have in the market and in other private spheres. If more people understood this reality, surely there would be less enthusiasm among those of us who live in democracies for giving to the state ever more power over our lives.

The Market Is A Vast Network Of People Being Kind To Other People.

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My wife has been traveling for a few days, so I’ve been alone with the kids for a few days. It’s a little outside my normal routine, but it was made incomparably easier by all the people who helped me along the way. There’s my mother-in-law, obviously, who kept the kids overnight a few days ago because I had a trip that overlapped with my wife’s, but there are and were countless people working behind the scenes who helped this weekend go so well.

It was spectacular in its ordinariness — or at least in what we think of as ordinariness. Virtually every minute was an exercise in tiny miracles turned into the mundane. A lot of unnoticed and unappreciated hands and minds have gone into making our new normal. The beauty of the market economy is that we don’t need to know or care that much about one another to cooperate to mutual advantage.

Consider the sources of the energy powering the computer on which I’m writing this, the dishwasher running in the kitchen, the washer and dryer running in the laundry room, and the electronic devices on which the kids have spent an inordinate amount of time over the last few days. Someone mined the coal that feeds the power plant.

Someone else invented the machinery that another person used to refine the oil that yet another person extracted from the ground into the gasoline that powers the car in which the kids and I have driven around over the last few days. I don’t have to know anything about them, and they don’t have to know anything about me — and yet we are able to make one another better off through a series of transactions summarized in my power bill and a receipt from the gas station.

Or consider the food we ate. We’ll sometimes pray that God would “bless the hands that prepared” whatever we’re about to eat. Those hands are many. Somewhere, a rancher raised cows that a local butcher I don’t know turned into the ground beef that I combined with the seasoning formulated, processed, packaged, and shipped by a veritable army of other people I don’t know so that I could in turn combine the resulting seasoned ground beef with cheese produced, shredded, packaged, and shipped by an army of people I don’t know and sour cream produced, packaged, and shipped by yet another army of people I don’t know in order to have delicious tacos for dinner. Someone grew beans that were processed, packaged, shipped, and available for me at a moment’s notice when my daughter reminded me that I had forgotten to buy some earlier. The sour cream, incidentally, came in a squeezable tube, which made it ever-so-slightly easier to regulate the amount of sour cream we put on each taco and which reduced by one the number of spoons we had to use and wash.

Part of what makes this remarkable is that we take it all for granted. We should wonder in absolute astonishment along with the 19th-century French economist Bastiat how “Paris gets fed,” or in this case, how I and my kids get fed (perhaps a little too much — Smithian self-command misses a foothold in my life on some margins, most of them gastronomic). It works because we have institutions that reward people for helping others achieve their own interests. Somewhere, someone designed a squeezable tube for sour cream. Did he do so because he was thinking about me or because he was thinking about how it would delight taco-eating parents and children everywhere? Almost certainly not. He was doing it because he had his own interests to look after — his own family, his own community, his own church, and so on.

Of course, you may have read the last couple of sentences and thought, “How do you know it was a he?” I don’t, and that’s a good point. Maybe the tube was designed by a she, or even someone who prefers other pronouns. Maybe the sour cream–tube designer is single — or in a polyamorous open marriage. Maybe s/x/z/he doesn’t pray the way I do, or even pray at all. Perhaps we don’t share the same tastes in music, games, and poetry. Or maybe we’d be best friends if we met. One beauty of a free market is that it brings together people who may not otherwise have any reason to come together and who may not even like one another or approve of one another’s lifestyles and allows them to cooperate to mutual advantage — and we can do so with essentially no knowledge about one another.

It’s an example of something F.A. Hayek discussed in his classic paper “The Use of Knowledge in Society.” Hayek quoted Alfred North Whitehead: “It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.”

Countless minds and countless hands have contributed to the slow march of civilization and helped to create a modern world (one fraught with problems, which I don’t minimize) in which I can perform innumerable operations closed off to previous generations without thinking about them. As Russell Roberts put it, “Love locally, trade globally.” As it gets easier to do the latter, it gets easier to do the former.

Or as Jeffrey Tucker likes to say, the market loves you, so you should love it back.

 

Choice Is What Sets Capitalism Apart, Not Competition.

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Capitalism has often been described by as “a system of competition” by its adversaries, or a system “based on competition.” Naturally, this assertion is usually coupled with a spirited oration on how this “tooth n’ nail” competition psychologically corrupts us – pitting man against man in a “race to the bottom.”

Many of capitalism’s most vocal advocates have, themselves, imbibed this premise uncritically. They leap to a fervent defenses of competition, extolling its virtues — real or perceived. In my view, this is a mistake. To accept without evaluation the presupposition that capitalism is a system of competition — in contrast to other hypothetical systems of cooperation (namely socialism and communism) — is to frame the very debate itself in leftist terms and play the game on an unfairly tilted game-board.

Capitalism Is About Voluntary Exchange.

This is not to say that competition is necessarily an evil either. The problem is that defining capitalism as “a system of competition” — in comparison to other systems which are supposedly “cooperative” — is a rhetorical ploy. Those who profess it may honestly believe it to be so, but it’s not true. Capitalism is not “a system of competition.” any more than any other system. Capitalism (at least in its free-market, laissez faire ideal) is a system of the voluntary exchange of goods and services in the absence of physical coercion, theft, compulsion or fraud, predicated upon the fundamental right to own and accumulate property.

Or, for brevity: Capitalism is a system of voluntary exchange, predicated upon the right to own property.

One might even venture, therefore, that it is capitalism that is the system most characterized by cooperation.

Because Scarcity Exists, Competition Is Inherent In Any System.

After all, it is not the presence of private property or the free exchange of goods that creates the presence of competition in a capitalist system. Scarcity causes that. In any situation of scarcity of resources, there is bound to be some form of competition over those resources (as well as over how those resources are allocated).

If we have a system that allows voluntary exchange, some competition is bound to arise out of that, but that would happen under any system. Even if you had a completely communistic society, which was centrally planned and involved no exchange of money whatsoever, people’s time would still be limited. If you were a filmmaker in this society, you would probably want as many people to see your films as possible. As would every other film-maker. This would put you at least somewhat in competition with them. Does this mean that communism, too, is a system of competition? Certainly you would be competing for the only customer — the sponsorship of the state. Corruption and cronyism would surely be the result. Who gets their film made and who doesn’t? Who allocates the highly desirable job of being a film-maker over the undesirable job of being a street-sweeper or refuse collector, and how can their favor be courted? The competition will commence, but instead of being decided by the free and voluntary exchange of film-goers, investors and film-makers it will be decided by someone else, I would argue, in a rather more authoritarian fashion.

Competition is just a feature of living in a world of scarcity, and would exist in any system. Socialism cannot do away with competition – nor can any other system.

Opportunity Cost Means Competition Is Everywhere.

The implications of these facts reach into any circumstances of scarcity beyond the economy. For example, supposing two friends each invite me over to dinner of an evening, I might have to make a choice between their invitations which will result in one of them losing out on my company. Does this then mean that friendship is a system of competition?

Similarly, on the market, our time and resources are limited. We make value-based judgments about choices of products and services to consume based upon what utility we think they will bring to us, sacrificing some options to others. Maybe we will choose a coffee shop based on which has the best tasting coffee, or maybe based on which provides the nicest atmosphere, or maybe based on which is closest, or where the customer service is best, or which is the cheapest, or which we have gone to the longest and therefore find familiar, or perhaps even based on which we think has the best ethos — for example, because they are a social enterprise that only sells fair trade produce and deliberately seeks to employ and train disadvantaged people. The fact is we decide. Each service provider believes they will benefit from our custom and will make attempts to attract us, placing an upward pressure on the quality of services and a downward pressure on price which we may correctly identify as a form of competition.

The Benefits of Free Choice

The miraculous wonder we miss when we focus our attention upon the competition which derives from choice is the ability to choose itself.

In fact, there is actually far more cooperation involved in providing people with goods and services than there is competition. To accomplish anything in the marketplace, one must  cooperate with buyers, sellers, managers, employees, suppliers, customers, advertisers, promoters, marketers, collective buyers, and so on. Leonard E. Read, founder of the Foundation for Economic Education, illustrated this in his most famous essay, I, Pencil, first published in 1958. In it he noted that not a single person on the face of this earth knows how to make a pencil. When you include those who manufacture and transport the equipment involved in these processes you cannot help but marvel at the fact that millions of people have a hand in its creation. They are working in concert, in cooperation, and as a result you can get a pencil for pennies.

Market Competition Brings Choice Out of Scarcity.

Because people make choices with scarce resources and limited time, competition will be an inherent part of any economic system so long as there is scarcity. The primary feature of free market capitalism is not competition, but choice. Rather than moderate the amount of competition in an economy, state intervention will replace competition to serve customers and convince them to voluntarily spend their money on a wide array of ever-expanding goods and services. We can contrast this with other systems in which competition rages over who can gain the favor of those who control the levers of government. That is where the real “tooth and nail” begins.

This article originally appeared at mises.org. Edited for length. Antony Sammeroff blogs on economic issues at http://seeingnotseen.blogspot.com.

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