Thursday, October 23, 2014

More on Free Markets vs. Central Distribution

Okay, here's another comment I posted for my economics class in reply to an article by Walter Williams (a professor of economics) that can be found at:
http://www.gracecentered.com/christian_forums/politics/markets-governments-and-the-common-good/

 My Response:

This economics professor obviously is very biased toward the free market system. His description of the two systems is skewed in favor of free markets. Either system--individuals trading individually in a free market or individuals contributing to and receiving from a centralized (government) distribution system--requires a solid moral foundation to best function for the benefit of the people in the system. Absent a foundation of concern for the well-being of others, commitment to integrity and honesty in all dealings, and so on, either system will run the gamut of evils.

Let's say high achiever Joe and struggling Bob work each day and produce some essential goods in a centralized economy. Joe produces 50 chickens in a month and Bob only manages to produce 5 chickens. These 55 chickens are placed into the central distribution system. Since it is well known that every family needs 10 chickens a month to survive, Bob is given 10 chickens to take home. This leaves 45 chickens. Since Joe contributed much more to the system, let's say he is given a double dose of chickens: 20 chickens, more than his family needs to survive. There are still 25 chickens to be distributed to other struggling producers in the system.

In this system the moral prerequisites include: 1) the distribution managers care about the well-being of those receiving goods, 2) these managers have sufficient training and understanding of the system to operate effectively, 3) each producer (Joe, Bob) honestly gives his best effort to produce.

Now let's move high achiever Joe and struggling Bob to a free market economy. Joe still produces his 50 chickens and Bob produces his 5. Bob has a dilemma here. Can he trade his 5 chickens for 10 of Joe's? That doesn't seem fair. Bob could ask Joe for 5 chickens to supplement what he produced, but Joe might say "no." If everyone Bob asks says "no," Bob and his family eventually starve and die.

Now, in this scenario, which system is more moral?
In my scenario, I wrote it in favor of the first system. Both my scenario and the one in the article are of course very simplified to highlight the concepts. In the second scenario Bob could perhaps offer to work for Joe in exchange for 5 chickens. But assuming Joe's and Bob's labor to raise chickens were equal numbers of hours, then Bob ends up working more hours just to have barely enough for his family.

The moral prerequisites of the second system include: 1) each individual must care enough for other individuals not to rip them off in exchanges, 2) individuals must be willing to help those not as fortunate (especially those at the bottom of ability and capacity).

My point is that the question isn't really whether free markets are better than some other system, but rather "can we ensure our people are morally upright enough to handle the free market?"

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