Those of us who want to see at least the most minimally sized state or even (gasp!) no states at all, go by a number of names. I’ll just call us voluntarists for the purposes of this post. Those of us who fit such a description are regularly confronted with some standard challenges. How could such a thing exist; who will look after the poor; how will the roads be built; who’ll educate the kids; who’ll protect the environment; won’t society break down into battling warlords? For the record, I answer all these questions in my book, Voluntary Governance: A Roadmap. But should I?(1) There is a particular problem with answering these challenges on their own terms. It leads us to winner-loses logic.
The reason for this is that one of our main criticisms of statists is that society [easyazon-image-link asin="0226320936" alt="Individualism and Economic Order" src="http://ecx.images-amazon.com/images/I/41TKygBGVaL._SL160_.jpg" align="right" width="93" height="160"]cannot be planned by some central social engineers. Notably, both Ludwig von Mises, in his famous paper on the impossibility of socialist calculation, and F.A. Hayek, in his seminal essay on the market as a spontaneous social knowledge regulator, demonstrate the impossibility of central social planning.
It is the market, as a dynamic reticulated network of trial and error experiments (2) that gradually gropes its way toward the best solution, taking account of all the diverse individual preferences and the availability of scarce resources. After Gutenberg invented the printing press and it turned out that there was a mass market for the printed word, no great planner sat down and devised the route to go from moveable type to the iTablet. It took centuries of trial and error by countless thousands of entrepreneurs – going by way of typewriters, dime novels and mainframe computers, etc. – to finally work out the way there.
[easyazon-image-link asin="0945466072" alt="Economic Calculation in the Socialist Commonwealth" src="http://ecx.images-amazon.com/images/I/41YvKLOrXQL._SL160_.jpg" align="left" width="126" height="160"]When there is a demand for a solution, people are willing to pay a premium for it, which brings new investment looking to profit from that demand. This is what we mean when we say that the market will take care of it. Not the market as some amorphous, abstract entity, but as the pooled effort of humans looking to make the most of what their fellow’s desire. And the whole point is that no one of us can identify or predict the solution that will finally emerge as the best. (Though, if we could, we sure could get rich!)
So, when we are challenged about the roads, the poor, the schools, the environment, and military defense, far from being a copout, as some might suggest, deferring to the market is in fact the only honest and accurate answer that we can provide. Yet, let’s be honest: that leaves many of our challengers unsatisfied and we’re so full of imagination. And we’ve read about historical examples and theoretical projections – surely we can give some credible explanation. And so we can. But why and at what cost?
The truth is, no matter how clever and well researched our answer to any of these questions, those answers are virtually guaranteed to be wrong. Of all the brilliant inventors who built upon the invention of Gutenberg’s press, could any of them have anticipated the iTablet? No, our “answers” give us some sense of satisfaction and maybe plant a seed of hesitation in the all too often knee jerk dismissal of our critics. But, the irony is that in doing so, we undermine our own values and vision of a better world. The degree to which we presume to provide blueprint solutions for a better world, we actually lend credibility to the very central planning aspirations that we know are both impossible and promise disaster.
To the degree that we win the argument that there are superior alternatives to the current statist operations, we are in danger of losing the larger argument that in reality no one is ever smarter than the market and inadvertently lend credibility to the delusion that central planning actually could work. We, indeed, could be the central planner! The winner loses. All for what? To avoid seeming without an answer? To feel the pride of showing a challenger we’ve thought the matter through more than has he or she? To simply feel less at the whims of the historical forces of aggregate human desire? However narcissistic, noble or tragic our motives, the result is the same. We undermine our own knowledge of the truth.
If we do indeed understand what markets are and how they work; if we recognize that the greatest human problems will only ever be solved by the greatest concentration of human ingenuity: then let that be our answer and let us not fall victim to the self-defeating ironies of winner-loses logic.
(1) In the book, I do make much the same point as here, as a form of qualification, but I thought it might be a good idea to have this point on a blog post for easy reference.
(2) This is actually a short hand version of a definition of the market. A fuller version would be along the lines of “a reticulated, negative-feedback, self-correcting system of dynamic and reflexive trial and error experiments in resource allocation and preference satisfaction.” Something like that.