Free Markets are Lousy Self-Promoters
Free Markets are Lousy Self-Promoters by Donald J. Boudreaux for AIER
Material prosperity is unambiguously good. Prosperity protects us and our children from starvation and malnutrition. It turns many diseases and injuries that were once lethalinto minor inconveniences. Prosperity gives us longer, healthier lives, and it fills those lives with experiences vastly more diverse and enriching than were the dreary routines of nearly all of our ancestors.
Ironically, however, the benefits of material prosperity sometimes create the widespread illusion that they are shrinking even though they are expanding.
Free Markets Are Disdained by Intellectuals
In his 1942 book, Capitalism, Socialism, and Democracy, Joseph Schumpeter famously identified one way in which material prosperity fashions its own camouflage. As society grows ever richer as a result of the workings of free markets – as result, that is, of what Deirdre McCloskey calls “innovism” – it supports and equips larger and larger numbers of intellectuals who speak and write (and now also blog and tweet) against the very economic system that makes their existence possible and that provides them with the platforms and tools they use to trumpet their uninformed hostilities.
Intellectuals’ tirades against free markets would fall on unhearing ears, however, if the reality of market-created abundance were more clearly seen. If ordinary people today in places such as North America and western Europe generally realized that their daily access to goods and services make them not just a bit richer, but about 3,000 percent richer, than was nearly every human being who lived prior to the year 1800, ordinary people today would not take their immense prosperity for granted. They would take notice of it and marvel at it.
But this enormous material prosperity appears to the modern eye instead simply to happen. Free markets work so very effectively and smoothly that material prosperity seems to come automatically from nature. And because the processes of wealth creation, along with the absolute amounts of prosperity, are thus unnoticed by the modern eye, the focus turns to individual differences, at the margin, in prosperity. The store clerk in Sarasota or Seattle takes no notice of the solid roof over her head, the hard floor beneath her feet, her closet full of clothing, her pantry and refrigerator full of food, herself and her children vaccinated against polio and measles, and the astounding computing power that she regularly totes around in the form of a smartphone. These marvels are to her very much as water is to a fish.
She is, though, keenly aware that she has in her bank account fewer dollars than a hedge-fund manager has in his, and that when she flies to New York to visit family she must crowd herself into a coach seat while Jeff Bezos can take the same trip lounging comfortably in his private jet. And if this woman somehow isn’t yet woke to just how much more money the superrich rake in relative to what she earns, intellectuals are hard at work daily churning out op-eds, blog posts, tweets, podcasts, YouTube videos, Hollywood movies, and anvil-heavy tomes to inform her of the misery, oppression, and economic injustice that capitalism habitually inflicts on her and other ordinary people.