Sunday, December 10, 2006

A sense of wonder

Virginia Postrel points us to an excerpt from a Clive Crook essay that begins: "Much of what is wrong with popular attitudes to capitalism comes down to one thing: a lack of wonder at what uncoordinated markets can achieve."

Crook had more to say in his essay about why economic freedom is misunderstood:
It is still true, despite Friedman's best efforts, that economic liberty is widely regarded as very much a second-class kind of freedom -- if it counts as freedom at all. . . . There is no great mystery about the reason for this double standard. Freedoms that express themselves through market relations -- the freedom to buy and sell -- are widely regarded as ethically compromised. This is the freedom to gratify one's greed, to exploit others, to con and be conned, where the market is a jungle, a war of all against all. There is a germ of truth in all that, of course, enough to lend it plausibility. But it misses the larger truth, of the market as an astoundingly productive system of voluntary cooperation, in which people of myriad beliefs, loyalties, and faiths can engage with others, freely, and to their enormous mutual benefit.
Indeed, only this past spring Friedman said:
Though it is not as true now as it used to be with the influx of immigration, the Scandinavian countries have a very small, homogeneous population. That enables them to get away with a good deal they couldn’t otherwise get away with.

What works for Sweden wouldn’t work for France or Germany or Italy. In a small state, you can reach outside for many of your activities. In a homogeneous culture, they are willing to pay higher taxes in order to achieve commonly held goals. But “common goals” are much harder to come by in larger, more heterogeneous populations.

The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically.
The EclectEcon takes a sceptical look a different sort of misunderstanding of economics.


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