Two Little Reminders

Wednesday, May 24, 2006

Two different columns cover a topic, capitalism, that has taken a beating in recent years in addition to apparently having been mostly forgotten by the Republicans -- when they have not been busy destroying it.

In the first, James Bartholomew notes how much capitalism has improved everyone's standard of living generally. Although he seems about to justify capitalism on altruistic grounds at any moment for much of the essay, that shoe never drops. He does not make the bold case for egoism that an Objectivist like myself would like to see, but his central message is that capitalism has improved the lot of everyone generally. That is a good thing to see in the major media. I'll take it.

What is the biggest benefit that the relatively poor have experienced over the past two centuries? It is surely the terrific reduction in the cost of food. Two centuries ago, food was the biggest part in a family's budget. It was hard for a poor family to get enough to eat. If there was a shortage, there could be a famine, resulting in thousands of deaths. Even in the 1920s, people on average spent a third of their income on food.

Now they spend only a tenth. Look at any chart of the price of the basic foodstuffs, such as wheat, barley and milk, and you will see almost continuous and deep falls. What has caused this massive benefit to the poor? A series of government regulations? A good-looking politician with an easy smile and a "vision"? No. Capitalism.

No single individual did it. Thousands, or millions, did it. They were not directed by any central agency. They just operated in a capitalist system. They invented farm machinery that replaced many men and therefore made food much cheaper. Farmers deployed these machines. Others created ships that could carry grain cheaply, quickly from faraway lands where food was grown more cheaply. Others still distributed the food in ever more cost-efficient ways, by rail and by road on newly created and deployed trains and lorries.

They did this, each of them living his own separate life in his own undirected way.
Bartholomew, in his defense of capitalism from its detractors, reminds the reader how much he has benefitted from it, and in the process makes him feel awe at the great achievements made possible when men are free to exercise their own best judgement for their own benefit. How often did the kings of old get to kick back and watch a DVD? Exactly zero.

And then John Stossel writes about that hero in times of disaster, the so-called price gouger, taking as his point of departure the folly of Mississippi jailing a man who attempted to sell generators -- the scoundrel! -- to Katrina victims. To my home state of Mississippi, all I can do offer the following left-handed compliment: "Thanks for inspiring such a great article!" Stupidity such as that routinely causes the state to have a brain drain, and to be the butt of comments like, "Mississippi is a great place to be from."
John Sheperson is a hero. When Hurricane Katrina struck, he turned on the news and learned that people in Mississippi had lost electric power. They desperately needed generators. He decided to help them, while helping himself.

He borrowed money, bought 19 generators, rented a U-Haul and drove it 600 miles to Mississippi, where he offered to sell the generators for twice what he paid for them. Eager buyers surrounded his truck. "People were excited," he said.

So did the generators go to hospitals? To nursing homes? Did they save lives? Did Mississippi officials give Sheperson a medal?

Nope. Instead, they locked him up -- and his generators, too.

"Nobody got any use out of them," said Sheperson.
Who needs William Faulkner to make Mississippians to look like a bunch of backward yokels when their officials do such a fine job? As for the "price gouging", Stossel hits that one out of the park. "Taking advantage of someone's extreme need means meeting someone's extreme need and getting fairly compensated for the unusual effort you had to make in order to do it."

The fact that Mississippi took the trouble to lock the generators up is especially, albeit unintentionally, symbolic of what all "anti-gouging" interventions by the government do: Such actions keep people from getting the goods they need when they need them. Good going, boys!

So the next time you think of price-gouging, think of your power being out and some hick padlocking a perfectly good generator you could really use.

Read both of these in full. They are excellent.

-- CAV

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