I previously covered the ideas behind the practical reasons behind economic conservation. There are several ethical/moral reasons as well. Even though many people see rationing by price to be greedy, not very nice, and even immoral, I think that it is the opposite. Price rationing is not only the most effective way of rationing a scarce resource, it is also the most just and most moral way of doing it.
One of the insights into the economic way of reasoning is that there is a difference between market interactions and interactions between friends and family. Economists do not actually auction off dessert or TV time among their children even though that would be the market savvy way of doing things. We aren’t interested extracting our producer’s surplus from the consumers in our own house. We value love more than any “profits” that we could possibly get in those situations. Where many people get screwed up is they try to apply those same values to the world at large. If everyone were indeed friends and loved one another, it might work. In reality, love is scarce and it’s impossible to know everyone let alone love them. So how do we keep a society functioning and growing? Through market interactions. Where there isn’t love, the market can distribute resources to where they are needed. Adam Smith wrote that it was not through love that the butcher and baker provide us with food, it is due to their own self interest that they provide these services.
Hayek wrote an entire book about this idea, it’s called “The Fatal Conceit.” What was the fatal conceit? It was that we can treat the world at large as if they were our family. There is little worry about treating our family like the outside world, but the warning that he gave us was that if you try to treat society like your family or your family like society, you will ruin both. It’s pretty obvious that the way to avoid most of the catastrophic societal ills is to make that society as wealthy as possible. History (and all the theory in the world) has shown us that that wealth is created through distributing resources through market activities.
The reaction allowing prices set by market operations being “unkind” or “soulless” comes from falling under the conceit that we need to treat everyone as if they were in our family. When I say “we” I am talking about policy set by the government. If any particular individual decides to treat everyone as if they were in his family and accepts the ensuing poverty, then that’s their decision. The key is that we cannot have policy set as if we were all one big family depending on love to get by. The result would be the total collapse of the wealth creating and situation improving mechanism that society enjoys. The US is fantastically wealthy, even its “poor” citizens are doing very well, and it is due primarily to our historical division between market operations and charity. The government allows us to pursue what we think is our best option, the overall result is prosperity.
When people use the government to help certain people (usually through price manipulation like subsidies, tariffs, etc.), it is succumbing to the idea that we aren’t being nice to that group. In reality, there is no “us” that is “doing” something to those people. The market works a certain way, and if left alone, it will give people the incentive to change behaviors. When the government decides to take people under its wing, it is just taking money from one set of people and giving it to another with all of the associated incentive warping consequences that government actions are so famous for. You have to be very careful of the “Killing the goose that laid the golden egg” syndrome. By systematically “helping” people, or trying to show “love” through the government, you risk the functionality of at least parts of the system that is the best way of alleviating the very problem you’re trying to cure.
It is very important to understand that no group can “love” or “care,” those are emotions and only individuals have those things. Groups only have actions and the decisions of the leaders (if there are any). Any time a group coerces someone into doing something (and the government is, as far as I can tell the only group that can do this), it leads to all sorts of consequences even if the group accomplishes the goals that the leaders spell out. Those consequences will divert resources (money, time, attention, etc.) away from things that individuals care about and funnel them into what the leaders of that group think are important. The only thing this can lead to is the disruption of the mechanism that creates wealth and is the best way of alleviating those problems. Hayek goes into significantly more detail of course, he’s got an entire book about it, but this is the executive summary…
The bottom line is that if you think there is a moral reason for doing something or distributing resources, it is up to you to get it done without forcing everyone else to go along with you. I’m willing to admit that there are always people that slip through the cracks in even the best functioning society. Drug addicts, mentally ill people, totally disabled people, etc, all need help, and I think that all people should help them. There’s a big difference between that thought and forcing everyone to help them. Given enough resources, I might indeed be able to adequately take care of those types of people, but it would take away from other things. If the government is not involved, things will be run much more efficiently and more will be accomplished with less money. The things that are not done because of the forced donations are benefits that have essentially been taken away from people. That in itself seems morally questionable, but there’s another level to it as well. If you’re the type of person that thinks about morality as opposed to just ethics will have some sort of payoff from doing the “right thing.” Whether it is getting into heaven, accumulating good karma, or just getting the satisfaction of helping someone, you are the one that needs to do it if you want to do the “moral” thing.
For me, “having a soul” involves doing the things that make people as a whole better off. That in itself will minimize the number of people that are helpless and need help. By taking care of the others with my own resources (as much as I can) instead of forcing others to do what I think is right, I will have helped accomplish both the better overall situation and helped the unfortunate. And yes, I am counting on people to step up and help out of their own pockets. I don’t think that this will be a problem because if there was less government fiddling, there would be more money available to do this stuff AND I believe that most people are good. If decisions about morality are left to many people instead of a few, better results will result, what can I say, I’m an optimist:-)I can’t see another morally correct way of going about things….