Of Markets and Mores

Note: This post is adapted from an essay I wrote in the summer of 2011 that won honorable mention in the Institute for Liberal Studies' "Morality of Capitalism" Essay Contest.

I have not always believed in free enterprise. On the contrary, as a teenager, I looked at the capitalist system with a deep-seated suspicion. From my current libertarian vantage point, I remember wistfully the loathing and contempt with which I viewed the notion that a system of self-interested individuals making free choices could ever benefit the common good. I saw competition between individuals for scarce resources, goods and services as just so much lubricant on the slippery slope to a cutthroat, social Darwinist dystopia. The whole scheme, I reasoned, was immorality at its worst. Greed, selfishness, chaos, mutual sabotage instead of mutual assistance, taking advantage of labor instead of providing for workers’ needs altruistically—all these were strands of a web of vice and perfidy. I sincerely believed that capitalism was simply a sublimation of some of the worst impulses in the human character.

Who would imagine that an illustrated storybook, of all things, would have shown me the error of my ways?

Yet so the story goes. During a visit to a friend’s dorm room in university, I happened upon a copy of cartoonist Gary Larson’s book There’s aHair in my Dirt! In it, a family of earthworms—mother, father and son—sits down to supper. The little worm, discovering a stray hair in his routine dinner of topsoil, explodes into a tirade about the boredom and drudgery of his life as a lowly annelid. A stern Father Worm, seeking to teach his naïve son about his true place in the ecosystem, launches into a fable about a young human girl named Harriet who goes for a walk in the forest near her home.

During her promenade, Harriet is awestruck by the beauty of the natural landscape she observes. She is bedazzled by the kaleidoscope of color in a field of blossoming flowers, exclaiming, “I’m gazing at a painting! Oh, Mother Nature! What an artist you are!” She thrills to the sound of songbirds chirping as they wing through the air, interpreting their sweet strains as expressions of good cheer. She coos over two cute young fawns playing in a meadow. She marvels at the “graceful acrobatics” of dragonflies circling over a nearby pond, and gushes over the lights of fireflies dotting the night sky, calling them “the fairies of the night, enchanting the forest with their magical little lights!”

Father Worm, of course, wastes no time bursting the young maiden’s bubble. The blooming flora Harriet witnessed were actually waging war on a “reproductive battlefield”—using their bright colors to compete for the attention of insects, which, of course, bear the pollen those plants need to breed. Those birds belted out their avian aria not to delight human ears, but to communicate with each other—relaying “an array of insults, warnings, and come-ons to members of their own species.” The fawns frolicking in the field instinctively did so not to engage in carefree horseplay, but to form added neurons in their brains, improving their intelligence and thereby increasing their chances for survival in a life in which predators were constant threats. Meanwhile, the dragonflies were engaging in predatory maneuvers, and Harriet’s beloved fireflies were really beetles whose displays of light were the products of biochemical processes used to attract potential mates.

Underpinning all of the sensory delights Mother Nature has to offer is a rough-and-tumble reality: fierce—and often lethal—competition. Moreover, although that never-ending struggle coexists with extensive cooperation between organisms, such cooperation is not altruistically driven. Rather, when living beings assist one another, they receive some sort of benefit in return. As naturalist and author Edward O. Wilson wrote in his foreword to There’s a Hair in My Dirt!, “Nature really is red in tooth and claw. While it is true that organisms are dependent on others, the ecological web they create is built entirely from mutual exploitation. Life is tough! There is no free lunch, and what one creature consumes, another must provide. I know of no instance in which a species of plant or animal gives willing support to another without extracting some advantage in return.”

I remember feeling awed when I first absorbed the wisdom in this simple yet profound parable. I already knew, of course, that in scientific terms, human beings are but the smartest subjects in the animal kingdom. Most, if not all, of our behavior has its roots in our less evolved ancestors’ primal struggle for survival. If the natural world could have spontaneously evolved into this arrangement—this system that was at once based on competition and cooperation, albeit a decidedly self-interested cooperation—without leading to utter chaos and collapse, then maybe, just maybe…

Yet I thought that perhaps the most striking insight in this tale was one left unspoken by the author—indeed, one that may not even have occurred to Mr. Larson himself. Out of the ferocity of competition in the state of nature comes beauty—awe-inspiring, breathtaking beauty of the kind that genuinely enhances our existence and helps make life worth living. The ruthlessness of the battles waged by blooming flowers, prancing deer, chirping birds and luminous beetles should not distract us—and does not detract—from the fact that what they produce is nonetheless wondrous, and our lives would be severely diminished without it. The thing to remember is that without the competition, the beauty would not exist.

Competition, then, leads to beauty—if it is done correctly.

The accordance of human existence with this principle soon dawned on me. Virtually every one of the products and services that we take for granted in our daily lives reaches us through a pipeline laid through a foundation of competition. No architectural marvel would exist without a butting of heads between architectural firms, contractors, engineering companies, and any number of other businesses involved in its construction. Every musical masterpiece is composed by an artist or group of artists who knows how many other such artists are champing at the bit to obtain one of a finite number of available record deals. Every garment is designed by an artisan who comes up with an outfit and a look that enough customers are likely to want to make it a worthwhile investment. In a true capitalist system, every winning competitor gets to the top of the heap by offering consumers an arguably better deal for their money than their rivals do. Competition spurs businesses to pursue true excellence, in the quality and utility of the products and services they offer.

Even when this basic paradigm is violated by misguided, meddlesome politicians and bureaucrats, the reality of competition does not go away. Thanks to the universal reality of unlimited wants and limited resources, that economic clash is inescapable and cannot be banished by government. All such intervention accomplishes is to push that competition into a context in which it is less likely to serve a socially beneficial purpose. Firms that lobby governments to give them no-bid contracts, or subsidies, or tariff hikes to shield them from foreign imports, still have to compete for those cronyistic favors. Unfortunately, instead of competing to give paying customers the best bang for their bucks, they are jockeying for political patronage—the kind that corrupts the political process, swindles their customers by artificially inflating prices, squanders taxpayers’ money and distorts the market beyond all recognition.

No matter what system of political economy a society adopts, competition will always exist, as will any avarice that accompanies it. In countless societies that sought to stifle competition throughout history—from the former Soviet Union to North Korea and Cuba today—one finds that the elites in the uppermost echelons of government power have always claimed material perks and privileges that were unavailable to ordinary people. Moreover, to a large extent, the proof of capitalism’s moral superiority to other economic systems is in the pudding. Fifty years ago, the Soviet Union felt the need to construct a wall through the city of Berlin to trap the people under its jurisdiction and prevent them from getting out. More recently, the US government contemplated building a fence along its southern border to keep out people who were desperate to get in. The voluntary flow of people between capitalist and anti-capitalist societies has always been almost entirely one-way. That stark reality speaks volumes as nothing else can.

The genius of authentic free market capitalism, then, is that it encourages capitalists to engage in the right kind of competition—to bend their energies toward benefiting society instead of plundering and pillaging it. In short, true free enterprise harnesses two unavoidable facts of life—competition and self-interest—for the greater good. There can be no system more moral.