Freeman

ARTICLE

Freedom Footnote

APRIL 01, 1988 by PAUL RUX

The author is a Ph.D. student in educational administration at the University of Wisconsin at Madison. He is also a management consultant.

The economist’s stock-in-trade—his tools—lies in his ability and proclivity to think about all questions in terms of alternatives . . . . The win-lose, yes-no discussion of politics is not within his purview. He does not recognize the either-or, the all-or, nothing, situation as his own. His is not the world of mutual exclusives. Instead, his is the world of adjustment, of coordinated conflict, of mutual gain.”*




* Walter I. Garms, James W. Guthrie. and Lawrence C. Pierce, School Finance: The Economics and Politics of Public Education (Englewood Cliffs, New Jersey: Prentice Hall, 1978), pp. 75-76.

There’s an old saw about finding great value in small packages. In this case, the textbook footnote cited above opened my eyes to the salient difference between the free market and state intervention in allocating resources.

The footnote is remarkable because it succinctly suggests why the free market is preferable to statism. It emerged as one of the critical insights in a summer of rigorous Ph.D. study of school finance at the University of Wisconsin at Madison. Despite its obscurity, the footnote’s bold, bald defense of freedom is worthy of comment.

The footnote reminds us that state action is political. In politics, there’s always a “win-lose” situation. For someone to gain, someone else must lose. It’s “all-or-nothing,” “either-or.” Take, for example, an election. There’s just one winner. Somebody else must lose and bow to the dictates of the winner. Consequently, whenever the state intervenes, the dynamics of politics are at work; people struggle to avoid ending up empty- handed, bitter, and bossed. For all his faults, Lenin aptly summed up politics as “who/whom.” Who’s doing what to whom?

Conversely, as the footnote also suggests, in the free market the key is “mutual gain.” You give something of value to get something of value. This is a “win-win” situation. Consider, for instance, the purchase of a suit. The customer exchanges money for clothing. The haberdasher gains dollars; the customer gains a new outfit. Both are winners.

in a nutshell, the textbook footnote suggests the superiority of the free market over statism. In the free market, “mutual gain” fosters choice and cooperation, as resources tend to fill the needs of everyone. “Win-lose” statism co-opts these resources and sows division and alienation.

These are our choices. It was quite a surprise to find them spelled out lucidly in a textbook footnote!

There’s an old saw about finding great value in small packages. In this case, the textbook footnote cited above opened my eyes to the salient difference between the free market and state intervention in allocating resources. The footnote is remarkable because it succinctly suggests why the free market is preferable to statism. It emerged as one of the critical insights in a summer of rigorous Ph.D. study of school finance at the University of Wisconsin at Madison. Despite its obscurity, the footnote’s bold, bald defense of freedom is worthy of comment. The footnote reminds us that state action is political. In politics, there’s always a “win-lose” situation. For someone to gain, someone else must lose. It’s “all-or-nothing,” “either-or.” Take, for example, an election. There’s just one winner. Somebody else must lose and bow to the dictates of the winner. Consequently, whenever the state intervenes, the dynamics of politics are at work; people struggle to avoid ending up empty- handed, bitter, and bossed. For all his faults, Lenin aptly summed up politics as “who/whom.” Who’s doing what to whom? Conversely, as the footnote also suggests, in the free market the key is “mutual gain.” You give something of value to get something of value. This is a “win-win” situation. Consider, for instance, the purchase of a suit. The customer exchanges money for clothing. The haberdasher gains dollars; the customer gains a new outfit. Both are winners. in a nutshell, the textbook footnote suggests the superiority of the free market over statism. In the free market, “mutual gain” fosters choice and cooperation, as resources tend to fill the needs of everyone. “Win-lose” statism co-opts these resources and sows division and alienation. These are our choices. It was quite a surprise to find them spelled out lucidly in a textbook footnote!

ASSOCIATED ISSUE

April 1988

comments powered by Disqus

EMAIL UPDATES

* indicates required
Sign me up for...

CURRENT ISSUE

July/August 2014

The United States' corporate tax burden is the highest in the world, but innovators will always find a way to duck away from Uncle Sam's reach. Doug Bandow explains how those with the means are renouncing their citizenship in increasing numbers, while J. Dayne Girard describes the innovative use of freeports to shield wealth from the myriad taxes and duties imposed on it as it moves around the world. Of course the politicians brand all of these people unpatriotic, hoping you won't think too hard about the difference between the usual crony-capitalist suspects and the global creative elite that have done so much to improve our lives. In a special tech section, Joseph Diedrich, Thomas Bogle, and Matthew McCaffrey look at various ways these innovators add value to our lives--even in ways they probably never expected.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION