07.04.09
It’s clearly time to go over some free market basics
Not only in the comment threads here at BN but also in plentiful supply in the media and society generally we see supposed substantiation for arguments in favor of collectivist economics and against capitalism. The three main areas where this crops up these days is when the conversation turns to health care, banking or energy (although a recent comment thread here also brought agriculture into the proceedings.)
The basic argument is that corruption and greed are inseperable from the profit motive. What I feel is important to point out is that examples that are cited to bolster this notion generally have to do with people and institutions that got busted for laws that are already on the books. In other words, we have legal safeguards in place in our society to prevent and / or stop any unethical manipulation of the free exchange of goods and service by free individuals freely forming various types of associations. In short, to point out something that Enron or Bernie Madoff or Lilly got in trouble for proves nothing about the viability of a particular economic system.
Now, although it should be unnecessary to do so due to the irrefutable obviousness of it, I will assert afresh the basic principle that profit is the key to a healthy society and the advancement of human well-being. Profit is what’s left over after a business enterprise has covered all its costs. It can be saved, invested in other enterprises, distributed to shareholders, used for research into new and improved products, made available to increase the pay of staff members, or all the above. It is how an individual or organization knows whether it is succeeding or failing.
As for this matter of greed, I will once again point out the fallaciousness of the idea that it plays some kind of important role in a free market. You can’t ask more for your product or service, whether you’re selling a business’s product or negotiating pay for a job you seek, than the market will bear. The party in a postion to cut you a check will say, “This doesn’t meet my needs and expectations” and go elsewhere.
Does one party in an economic exchange have to swallow hard sometimes? Of course. This gets to the even more basic level of truth about reality upon which economic principle is based: All life is a tradeoff. No one in the world can guarantee you all your fondest wishes and grandiose dreams. You must, in an economic trasaction, find that point at which cost and benefit seem like something desirable to you.
Any alternative to this brings in some third party besides buyer and seller. We all know what that party ultimately comes down to: the coercive power of the state to distort this arena of freely arrived-at agreement in the name of some kind of phantom “fairness.”
Mr.Dings said,
July 4, 2009 at 5:18 pm
Various il papas have grappled with this question too, throughout the 20th and on into the 21 Century. Benedict will soon weigh-in on the topic in his first social encyclical. He said he wanted to update what he had drafted so the document would deal thoroughly with the current crisis and offer “a more adequate response” to the world’s financial woes.
http://www.catholicnews.com/data/stories/cns/0903003.htm
Instead of focusing on theological beliefs, the social encyclicals written by most modern-day popes have tried to shape the way Christians and all people of good will can better serve the common good. Each social encyclical was unique in that it sought to respond to the most pressing social realities at the time.
Mr.Dings said,
July 4, 2009 at 5:18 pm
Various il papas have grappled with this question too, throughout the 20th and on into the 21 Century. Benedict will soon weigh-in on the topic in his first social encyclical. He said he wanted to update what he had drafted so the document would deal thoroughly with the current crisis and offer “a more adequate response” to the world’s financial woes.
http://www.catholicnews.com/data/stories/cns/0903003.htm
Instead of focusing on theological beliefs, the social encyclicals written by most modern-day popes have tried to shape the way Christians and all people of good will can better serve the common good. Each social encyclical was unique in that it sought to respond to the most pressing social realities at the time.
Bentnotesmanhisself said,
July 4, 2009 at 6:00 pm
Any serving of the common good must be consistent with allowing the individual to soar to the greatest heights of excellence, achievement and (freely chosen) contribution that he can.