More to Markets than Wealth

From p. 92 of James Buchanan’s 2005 essay collection Why I, Too, Am Not a Conservative:

I have often noted how much better it would have been had Adam Smith entitled his treatise ‘the simple system of natural liberty’ rather than The Wealth of Nations, since his very title called direct attention to the aggregate of value generated, despite Smith’s intent and purpose.

Adam Smith’s intent and purpose, of course, was to describe and defend what he called the simple system of natural liberty. The fact that this system enables efficient wealth creation is a good thing, but a second-order benefit.

Buchanan’s intent and purpose is point out that, like Smith’s choice of title, many classical liberals only care about the wealth aspects of markets. This focus is a mistake. Markets’ virtues run far deeper, in a way that can resonate deeply with people of nearly all philosophical persuasions.

This is because market orders are almost completely subjective. Different people have different preferences, and want different things. Because markets treat people as equals, very different people are free to cooperate and exchange with each other however they want, so long as they respect others’ equal rights to do the same. That way you can get the bundle of goods you want, I can get the very different bundle of goods I want, and so on.

Compare this to an election where your choice is between one politician with one bundle of policies, or his opponent with a second bundle of policies. You can’t pick and choose the positions you like from each candidate, and discard the ones from each that you don’t. It’s an all-or-nothing deal.

Markets are more than wealth creation engines. They are dignity creation engines. You can choose how you eat, dress, live, work, and play in a way that top-down systems cannot, or will not, provide. Politics doesn’t work that way, but markets can, when they’re allowed to.

This, Buchanan argues, is markets’ true appeal. The fact that so many classical liberals focus instead on efficiency is as poor a salesmanship job as he saw in his long lifetime.

In a way, it is classical liberals’ own fault their views are unpopular.

One response to “More to Markets than Wealth

  1. Pingback: What Does the World Think of Capitalism? | Inertia Wins!