A core premise of capitalism and free markets is that people voluntarily enter into exchanges and interactions with each other. Each does so because he believes there’s a benefit to be gained from that exchange or interaction. Thus, the benefit is mutual. It is win-win. Both (or all) sides of a transaction achieve with something each desires. This is how the Invisible Hand of capitalism works, and it has driven wealth creation and economic prosperity since the dawn of civilization.
This concept of voluntary, mutual-benefit interaction even appears in the most non-capitalistic societies. In both Red China and the Soviet Union, black markets and areas where the government looked away produced the greatest economic output. Win-win is how societal wealth is created, maintained, and built upon. Win-win is how people come together, in times of plenty and times of want.
None of this is news to anyone who’s looked at even a scrap of history or learned even a modicum of economics (and likely not news to anyone who’s ever worked in a competitive marketplace. Unfortunately, this bedrock reality is ignored or dismissed by many people who should know better.
Consider a recent comment by Karolina Skog, Sweden’s environmental minister:
Cars are driven largely by men so by giving a lot of space to cars; we’re giving a lot of space to men — at the expense of women.
While it’s certainly possible to engage in enough mental contortions and gymnastics to add a veneer of plausibility to this statement, at its core it is the result of fallacious zero-sum or negative-sum thinking. The fact that it’s not laughed into obscurity speaks of a real danger in today’s societal and political thinking. That danger is the abandonment of what we know to be true: that voluntary human interaction produces positive sums, creates wealth, and improves living standards for everyone. Replacing it is the zero-sum mind set, where business owners only succeed by exploiting and taking from their employees, where minorities lose out in their interactions with non-minorities, where A only gets ahead at B’s expense, and where anything “given” to some by society must be “taken” from others.
That last bit is the only one that rings true – if you replace “society” with “government.” It is government that is zero-sum, or more accurately, since it takes a vig for its efforts, negative-sum. It is government that destroys wealth and saps productivity, no matter the multiplier/pay-for-itself farce that’s used to justify government spending of many sorts.
The misconception that interactions are fundamentally winner-loser is understandable, given tribalistic human nature and that we entertain ourselves with sports and other competitive activities. It’s also easily resolvable with the most rudimentary economic education, education that’s little more than opening people’s eyes to the driver (self-interest) behind voluntary exchanges of goods and services. Unfortunately, the truth of win-win doesn’t sell as well as zero-sum does, given (again) human nature (in this case, envy, greed, assumption of others’ greed, and laziness i.e. my life’s easier if I succeed in demanding that others’ stuff be given to me). Were government small and its power limited, this misconception would be of little matter, since it would be little more than petulant whining. But, when government is big and powerful, if enough voters see the world as zero-sum, then politicians will act in a zero-sum way.
Truly, that’s what’s going on. Despite the plain evidence of their everyday voluntary interactions, too few understand that voluntary exchange is win-win and that coercion is win-lose. So, ironically, they demand coercion in order to counteract what they perceive to be win-lose. And, in doing so, they give power and the bully pulpit to ninnies like Ms. Skog.
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