Friday, January 17, 2014

Munger on Rawls and Inequality

Article Link

From the article:

What, then, of profits and the income disparities associated with market processes?  Is not the pursuit of profit the goal of capitalism?  Absolutely not, and to say that is to fundamentally misread the argument for capitalism.  Capitalism is that system that best ensures consumer sovereignty.  Full stop.  Profits, and income inequality, are waste products, byproducts of the attempts by entrepreneurs to serve consumers.  And like by-products in any other context, the idea that the world would be better if the level of external effects were reduced to zero is quite mistaken.  

and

The problem with this formulation– explicit the (selected) quote from Mill, and implicit in Rawls–is a question-begging premise:  “The things once there, mankind, individually or collectively, can do with them as they like.”

The things once there?  Seriously?  And economists get mocked for their facile question-begging assumptions!  (“Assume a can opener”).  We have no basis for assuming that “the things” will be there, unless prices and profits can perform their directive functions.  Without the promise of profit, the things are not there.  In fact, the things are not even “things” yet, but rather ideas that no one has ever thought about until some entrepreneur imagines them.


Source: Mike Munger, "A Libertarian Mungerfesto, Part IV: Consumer Sovereignty, and Getting 'The Things' There," Bleeding Heart Libertarians, January 16, 2014.

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