Recently I was talking with someone else about capitalism and the free market. They voiced concerns over the fact that capitalism does not alleviate everyone’s needs equally. This seems to be a common concern among the economically illiterate with a fondness for “virtue signalling”. Presenting ones self as “compassionate” of others and their social ills is considered paramount and above sound economic perspective. And such concerns unjustly lay the cause at the feet of the free market rather than the true culprit: government.
Let us tackle the idea that the free market unjustly distributes wealth. There are a couple of problems with this idea. The first being that it views the free market as a zero sum game. Such an idea is completely false when contemplated for longer than five minutes. The free market is free because it involves voluntary exchange meaning, trades only occur when both participants in the trade perceive that they benefit from it. An example I always give is that of a customer and a fruit stand vendor. The customer wants to eat and the fruit stand vendor wants to sell his food and they happen to meet on the street. The customer reaches into his pocket to give the vendor money and in exchange the vendor gives him an apple. This is because of the differing value scales that are a given with individuals. All individuals act by applying the scarce resources in their control (their property) towards their perceived uneasiness. What individuals perceive as an “uneasiness” will vary among individuals and this is what creates the differing value scales among all of us.
These critics of the free market view capitalism as a zero sum game due to the inherent greed they perceive in it. The beauty of capitalism is that it channels the greed of an individual towards serving others by providing value in their communities. The greed of the fruit vendor is channeled into serving the needs of the customer. The greed of the customer is channeled in another way into serving someone else, possibly with labor, to earn a wage which he can use to pay for the fruit. It is only within statism and egalitarianism that a zero sum game is a given. Why?
The reason is that the concern for equality these people have means that people must be made equal. But this skepticism of the free market based on the the distribution of wealth that naturally occurs on the free market is unfounded. If we are distrustful of the “unfairness” of the market, we must be outraged at the “unfairness” of life itself. Some people are born taller than others. Is that fair or should some be cut off at the knees so that all can be equal? Some are born blind while others are not. Should we gouge one eye out of a person that can see fine now so that both him and the blind person can see poorly? If these examples are abhorrent to people, why do some of these same people advocate for stealing from one person to make them equal with someone less fortunate? What makes that different from gouging an eye out or hacking legs off in principle?
The answer is, “nothing”.
This is because wherever there is a “trade” backed by coercion, it is indeed a zero sum game. Unlike the voluntary exchanges on the market, both parties do not benefit. Only the the initiator of violence does. The victim of coercion loses. One gains at the expense of the other. This makes the idea that the free market is a zero sum game and “unfair” laughable since it is clearly the side arguing against capitalism that is guilty of this.
Anyone that wishes to infringe on property based on “virtuous” pretenses is a terribly misguided person. Their obsession with equality only guarantees that everyone will be equally miserable poor, not well off.