have you noticed how much of a bad rap the free market (aka "capitalism") gets these days?
with the collapse of the economy, folks all over have been lambasting it.
it's been described as a monumental failure. it's been labeled a dead doctrine.
is it?
churchill once called democracy "the worst form of government except for all those others that have been tried."
democracy is not the free market. but the same thing might be said about the free market.
my best friend once joked to me that the free market is really just a system that allows me to give you my chickens in exchange for your bananas.
and it's kinda true.
the free market is really just a barter system with a twist.
i have 10 chickens. you have 20 bananas. i give you one chicken in exchange for 10 bananas.
pretty simple, right?
but say i try to give you my one chicken and you decide that you don't need it. you really want a loaf of bread. so therefore we're unable to work out an exchange.
since i no longer have a means of exchange with you, we now have a dilemma, don't we?
this is where the twist comes in: green paper and shiny coins.
prior to the dawn of green paper and shiny coins, you and i were at a standstill. i wanted your bananas, but you didn't want my chickens.
but now, what i can do is give you two green papers for your 10 bananas. and you're happy, because you can turn around and give those two green papers to mary, who happens to have a loaf of bread.
mary then gives one of those green papers to mark, in exchange for a cup of coffee.
mark then gives two shiny coins to joann, in exchange for a stick of gum.
sounds like a nursery rhyme, right?
but the free market is pretty darn simple. that's the funny thing about it.
why would an arrangement that allows people to give each other green paper and shiny coins in exchange for chickens, bananas, coffee, and gum, get such a bad rap?
is it because some people are able to accumulate more green paper and shiny coins than others? because all that really means is that those people are able to make more exchanges for chickens, bananas, coffee, and gum? is that bad?
after all, what could be a better arrangement than one that enables you and i, and mary and mark and joann, to freely exchange with each other so that we can each collect precisely the number of chickens, bananas, coffee beans, and sticks of gum we want?
what could be better?
would it better if someone else told us how many chickens, bananas, coffee beans, and sticks of gum we should each have?
how about if i told you that you are no longer able to keep your 20 bananas? you would get angry. you would tell me that you spent lots of time and energy to grow those bananas, so what right to i have to take them from you, wouldn't you?
but what if i said that mary and mark and i had gotten together and decided that 20 bananas is more than any one person could ever need, so we're going to make you give each of us 3 bananas. you might be a little frustrated. you'd surely ask why.
"well," i'd say, "we all agree that we need those bananas more than you do. and we have some friends who could also benefit from those bananas, so tough shit."
or what if i told you that you growing your bananas is wrong, and that what you really need to be growing is olives. "but hold on," you say. "you may not want my bananas, but mary and mark come to me for bananas all the time. why should i grow olives when i have people who come to me for my bananas?"
"well," i say. "times have changed. feel free to continue growing your bananas, just so long as you understand that for every 10 bananas you grow, you have to give me 2 of them. also, before you can grow more bananas, you have to fill out a banana growers request form. this form will take two weeks for me to read, because i am a busy person."
"but i can't wait that long," you might say. "i have to spend that time cultivating the land so that i can have the bananas ready by the time mark and mary like to have them."
"doesn't matter," i say. "this is what you have to do if you want to continue growing bananas."
clearly, you catch the drift.
bottom line is that, when you break it down, the free market is simply an arrangement by which we use green paper and shiny coins for the trading of chickens and bananas. and coffee and gum. and even olives.
if that's an evil system, please show me what aspect of it is evil.
my guess is that if there's anything evil about it, it likely has more to do with the human beings who trade the chickens, bananas, coffee, and gum than it does with the actual trading arrangement itself.
but maybe i'm wrong.
it wouldn't be the first time.
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