Antagonism toward markets is present in various views in political philosophy, and among a large portion of the general public. This attitude is misguided. Not only are markets a valuable feature of society, they are a necessary part of any functional, moral society. This fact doesn’t rest in some grand theory of government or in some personal philosophy. It rests in incredibly basic facts about human beings. First, we are often selfish, and second, we want things. This is all we need to explain why markets, and the businesses that operate with them, are an inexorable part of any just society.
People want things. There are four basic ways to obtain them: make them, steal them, ask for them, or buy them. More precisely, we can obtain them through our own labor, we can obtain them from others without their consent, we can obtain them from others with their consent and without compensation, or we can obtain them from others with their consent in exchange for compensation. The first and third options are inefficient on a societal scale, and the second one is immoral. A functional, decent society will have to focus on business and trade as a means of fulfilling our desires.
There is very little we can obtain by our direct efforts. There’s a wonderful TED talk where Thomas Thwaites builds a toaster from scratch. The result is an obscenely expensive, ugly, and barely functional product that took nine months to complete. Almost everything we purchase in modern society is a product of a vast array of actions by a large number of individuals who typically have little understanding of the part others play in the creation of the final product. Isolated from society, some people might barely survive by their own efforts, but no one would be happy doing so. We need others to get what we want, and the more people we can rely on to help us get what we want, the better off we are.
Coercive or involuntary means of getting what we want such as stealing are obviously immoral. Less obviously, they are also inefficient. There is little reason to make things if there is a high likelihood they will be stolen. People who realize their efforts will have no connection to their own well-being have little reason to be productive. This was a huge problem for communist societies, and it would hold for any societies grounded in theft. There won’t be much to steal if there isn’t much reason for people to make things. The only way to even try to maintain such a society would be to force people to work against their will. Stealing labor through slavery, then stealing the products of that labor directly might allow a continued, poor society to exist. Such a society would be a moral atrocity, though.
If others were naturally driven to do all they could to make us happy, we could rely on them to give us what we want and need. “From each according to their abilities, to each according to their needs” could be a viable social plan for deeply altruistic beings. In limited societies, for limited periods of time, this has actually worked. Maybe the best example is the early Christian church as described in the book of Acts. They took Jesus’ command to love their neighbors as themselves seriously, and tried to be self-sacrificing without limit. However, while Christianity spread, it did so only by watering itself down. The limitless altruism didn’t come with it. A stable, efficient, long-term society that satisfies human needs cannot rest on altruism alone. A hefty degree of selfishness is an obvious part of human nature, and efforts to live in selfless ways have never succeeded on a large scale or for a long time.
The failure of these alternatives leaves us with approaches that involve free trade. In these societies, people choose to give up something they have to others in exchange for something they want at least as much. If this approach is a legitimate option, then it would be better than the others. There are good reasons to think that this standard is more than adequately met. There are at least three clear benefits of business and trade as a means of satisfying human desires.
First, business provides an efficient, sustainable method for solving problems. In order to provide for our needs, people need to make things, and to get them to the people who want them. Markets allow us to do this in a way that has a number of benefits. First, it provides an incentive for people to create better and more easily obtainable solutions to our problems. If someone wants a more effective way to communicate, then coming up with a better way will allow you to get them to purchase from you. If someone is happy with the type of communication they have, then finding a way to make a version that is cheaper will get you customers. In either case, there is always a good reason to make improvements, which, in turn, will dramatically increase the rate of progress in a society. In addition, business allows for great diversity in the offered solutions. Central planning usually results in one-size-fits-all solutions that can’t satisfy the variety of interests and special circumstances people have to deal with. Markets can. Finally, business provides solutions that are testable by the market. People decide which solutions are best for them by making purchases. The good ideas get purchased, while poor solutions disappear, and none of this requires any additional costs to society. For all of these reasons, business usually provides a more effective means of problem solving than the alternatives.
Second, businesses are typically non-coercive. In business, you provide some people with an option to purchase a good or service, and others with an option to help you do so as an investor or as an employee. However, you aren’t allowed to force people to accept these offers. If you tell someone to work for you and they say no, you can’t use this to justify stealing their stuff or locking them in a cage. This is different from government solutions, where people are required to invest in them in the form of taxes, in rare occasions are forced to work to implement the solutions offered (e.g. conscription and jury duty), and are always forced to buy these solutions in the form of more taxes under threat of punishment for failing to pay. Since coercion is usually wrong, this provides a strong moral reason to prefer market solutions to government ones.
Third, business takes a potentially destructive force, human greed, and harnesses it for social good. As Adam Smith puts it, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.” Smith understands that businesses survive by meeting the needs of others. Trade provides a peaceful means of securing a better life. Free exchanges of goods by fully informed individuals will make both parties better off. And they will do so without the dangers involved in violent efforts to obtain those advantages through theft. Business takes the natural drive to satisfy self-interest and provides a way to meet that goal that is safe and beneficial to others.
Many approaches to political philosophy are hostile to trade as a core element of a just society. All of these views seem to ignore basic facts about human beings and about morality. We want things. We aren’t naturally and universally altruistic. Stealing is wrong. The case for business as an important, if not the most important element of any society that works for the sort of beings we actually are rests on nothing more than these simple facts. Whatever its limits or problems, free trade is something we should all be fighting for.
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