This post is by Jeff Carter from Points and Figures
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Capitalism is under assault in the US. There are a lot of people that are comfortable with socialism, or “just a little socialism”. A question I might ask is are you okay with “just a little bit of dog poop in a big brownie mix”.
What people don’t realize is that the urge to trade, to get gains from trade, to interact with markets is really somehow encoded in our DNA and makes us human.
Over and over again we see it. Professor Mark Perry has a series called “markets in everything”. Humans always find a way out of problems by using markets. You might not have seen it but there was a person in Venezuela that started mining bitcoin and using it to buy food on Amazon Prime because his family was starving, but the electric power was “free”.
Humans understand costs/opportunity costs almost intuitively.
I have it in past blogs, but if you haven’t read Economics of a POW Camp it is a great study in how humans turn everything into markets in order to improve their lot in life.
Last year when I was in San Francisco, I went to a vegan restaurant. It was on Mission, and in kind of a sketchy area. My wife and I parked and walked to the restaurant. There were a lot of homeless people on the corner. They weren’t begging. They were trading. They were trading goods that they had back and forth. They weren’t using currency, it was straight up barter.
Homeless people using markets to try and improve their lot in life. Many of them are mentally ill, hurt emotionally, messed up. But, a marketplace still existed.
Markets are incredibly powerful. They scare socialists. Socialists want total control. True free markets are uncontrollable. Because markets are messy and outcomes often unclear, socialists are able to scare people into not believing in the power of the market. “Markets break” they often say so they have to be regulated.
I’ll agree that they should be regulated for transparency. Price discovery, who’s buying and selling, volumes all ought to be 100% transparent. But, outcomes should never be regulated.