has provided me with fodder for my own post. One of the commentators asserted that “the economy” was there to provide jobs for people so that they can feed and shelter their families. Another poster pointed out that the economy has no more purpose than weather systems do. There’s some interesting insights to be gained from that point. If you can imagine that we are not only affected by “weather systems” but that our decisions (as a whole) are what make them, a much different view of the economy emerges. We have to make decisions based on the situation we are in, but our decisions along with everyone else’s are what make up markets. Nobody stands in the rain and says, “God, this sucks, someone should DO SOMETHING about this!” and yet people do this all the time when it comes to market forces.
Ah, I can hear some people out there saying, “But if our decisions make up the economy, then surely we can control it, right?” Well, maybe if everyone (or a vast majority) were coordinated enough. The trouble is that every single person’s situation is different from the next and so every person is subject to different decision making processes. This is why it is almost impossible to coordinate enough people to make any real impact on markets. It is also why when changes are forced onto a market from above bad things happen.
Most people “see” patterns in markets and the economy and assume that someone or something must be responsible for those patterns. There isn’t any one person or group of people making those decisions in our economy (thank God) and trying to figure out the something that causes those patterns is like trying figure out why a cloud looks a certain way. The rationale behind a free market approach is that everyone is free to make whatever decisions that will benefit them the most. The patterns that result in the economy are brought about by free choice. There will always be something that any particular person doesn’t like, the popularity of Wal Mart, the loss of jobs in a certain sector, or the automation of work in manufacturing, but if those things come about because people prefer those things (voting with their feet and wallets, not by what they say), then that’s probably the way they should be. If someone comes along and says that one of those things is wrong and that we should “fix” it, they are effectively saying that people shouldn’t have made the decisions that they made. Of course when someone says something like that, they are arguing from their own view of the world. There is no way that they can imagine, let alone take in every unique person’s situation and decision making process.
Maybe John Doe was running late and Wal Mart was open on the way from work, maybe Jane Smith had some dental surgery done that week and the only way she could afford the medicine was by using the pharmacy at Wal Mart, maybe Jack Rogers is a cheap bastard and not paying the absolute lowest price on anything drives him crazy, maybe Judy Juarez likes to go someplace where the check out clerk speaks Spanish, etc. There are an infinite number of possible reasons to choose (or not choose) any particular business and no one person can make an informed decision for everyone. If people are allowed to make their own decisions, certain patterns will emerge. You may not like all of them, but those patterns are the result of everyone making the best decision for themselves in their particular situation. And just like the weather, you may not like rain, but stopping it for your own comfort (or the imagined comfort of others) has serious consequences.
Markets, and the economy that is made of them, are formed by people’s decisions in day to day life. If everyone is free to choose what they want and everyone is free to compete (both businesses and people) for money, the resultant patterns are made by people’s priorities and what they feel is important. You might disagree with their priorities or how someone goes about making their life as good as they can make it, but that’s none of your business. Or to put it another way, worrying about those things is as useful as saying that it shouldn’t be raining right now, or that the humidity is too high.
Isaac