Voluntary Exchange

It should be obvious to all that the modern progressives (who hate progress) are people who detest individuals acting freely without direction from some planning board. The latest round of economic woes reminded me of an essay by Rothbard.

Austrian Economist Murray Rothbard wrote the following in his great essay called “Anatomy of the State“:

Man is born naked into the world, and needing to use his mind to learn how to take the resources given him by nature, and to transform them (for example, by investment in “capital”) into shapes and forms and places where the resources can be used for the satisfaction of his wants and the advancement of his standard of living. The only way by which man can do this is by the use of his mind and energy to transform resources (“production”) and to exchange these products for products created by others. Man has found that, through the process of voluntary, mutual exchange, the productivity and hence, the living standards of all participants in exchange may increase enormously. The only “natural” course for man to survive and to attain wealth, therefore, is by using his mind and energy to engage in the production-and-exchange process. He does this, first, by finding natural resources, and then by transforming them (by “mixing his labor” with them, as Locke puts it), to make them his individual property, and then by exchanging this property for the similarly obtained property of others. The social path dictated by the requirements of man’s nature, therefore, is the path of “property rights” and the “free market” of gift or exchange of such rights. Through this path, men have learned how to avoid the “jungle” methods of fighting over scarce resources so that A can only acquire them at the expense of B and, instead, to multiply those resources enormously in peaceful and harmonious production and exchange.

This seems so simple to me that it should not even be necessary to point these things out to people past middle school age, and yet it comes as a shock to many. Few people in the general public seem to be able to understand it. A man can live by trying to be a self-sufficient hermit, taking from others by force or fraud, or a man can cooperate voluntarily with others to enrich everyone.

I believe that voluntary cooperation is in our very genes. We are programed by millions of years of evolution and experience to divide tasks up so that the division of labor allows everyone to be better off than if the task was undertaken individually. When a group of men work together to get a job done and there is division of labor, we get far more productivity than if only one man tries the same job. Just try making an old time pencil for your school child all by yourself someday. Be sure and start with absolutely no tools at all since you are going to make everything yourself.

I think that the voluntary cooperation piece of the “division of labor” is more important than most people appreciate. We can not tell in advance where the innovation and marginal improvements are going to come from, and so to attempt to dictate the billions of exchanges that happen each day from a central committee is to hamper and hinder the progress of all mankind. This has been seen in socialist experiments around the world. Central planning and control is just plain inefficient compared to a free market situation where everyone is free to voluntarily trade in goods or services with others.  And besides the inefficiency aspect of central planning, we have the fact that people are meant to live free and not as slaves to faceless bureaucrats who use the brutality of the police state to enforce their mindless edicts.

One state has a motto that reads, “live free or die”. I like that and would just add that one can never live free as long as he is a subject of the nation-state.



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