I discussed some of the differences between the natural world of "biological competition" and the free market's "catallactic competition" in my post of yesterday. Today, I shall continue on the same theme, and discuss yet another important difference between the jungle and the urban catallaxy.
The world of nature, characterized by pitiless "biological competition" and the "survival of the fittest," is so because of the simple fact that all resources are strictly limited by nature itself. On the other hand, what characterizes Man in the market order is that he is a "producer." The market order is about "production" and "exchange" - and we are all producers first. Each participant in the market catallaxy produces a "surplus" above his needs - and all these surpluses are bought by the same people in their capacity as consumers. Thus, the resources available for consumption far exceed what niggardly nature would have produced. The best example is chicken.
Not very long ago, before the advent of modern poultry farming, chicken was a rare and special treat in Indian homes. Today, we have chicken coming out of our ears - it is abundant. This is not chicken supplied by Nature; rather, this is chicken we have "produced" through farming. In the jungle, we all would have to hunt chicken - to extinction. Now, because of the market, chicken will never become extinct. Farming is good for endangered species. Ostrich, crocodiles and even the tiger (in China) are surviving well because of farming.
Thus, whereas nature has been niggardly, and only the fittest survive there, the urban catallaxy has literally poured the fabled "horn of plenty" onto mankind. There is scarcity, of course, because of nature, and all "economic goods" are so because of natural scarcity, but what the market economy does is create conditions of abundance. The needs satisfied by modern markets far exceed what could be extracted from nature by primitive man. In all "developed" nations, agriculture is just a small fraction of the overall economy - and, it is noteworthy that we now have a "leisure industry" larger than the food industry. Tourism is the world's biggest industry.
Modern capitalism is "mass production for mass consumption." This is what has dramatically improved the conditions of the masses in the West - they succeeded as consumers. In the market system of "production" and "exchange" the production part is the "disutility." The real "utility" comes from the goods we purchase after selling what we have produced. Consumption is the goal of all our efforts. And it is here that we need modern Capitalism and unilaterall free trade. This is especially important for the masses and the workers - the social classes whose cause our socialists profess to champion.
Recommended readings:
1. Frederic Bastiat's essay "Scarcity and Abundance" available here. Bastiat shows how governments that support producers create scarcity; whereas if all economic policy favoured consumers, there would be abundance.
2. There is also a published debate between Julian Simon and the environmentalist Norman Myers titled Scarcity or Abundance? that is truly worth reading. Simon establishes the case that the planet Earth is a huge place, that all "natural resources" are abundant in the catallactic sense, and that the environmentalists' who spread fears of the earth "running out" of everything because of human "overpopulation" have got their facts wrong. Simon, of course, is the author of The Ultimate Resource, which first established the fact that the human mind is the most precious resource we have. It is this mind that seeks out and makes available all the "natural resources." You are a possessor of one such mind. Take good care of it.
Hello, thank you for discussing these interesting topics.
ReplyDeleteAs a biologist, I have to say that you have hit on an important point that is often overlooked/ignored in evolutionary models -- resource acquisition is not always a zero-sum game. In fact, the most important events in the history of biology are those innovations that expanded the resources available to life (e.g. photosynthesis, colonization of land).
Humans are the epitome of this process -- we constantly innovate and we constantly expand the resources that are available to us (granted, part of this is by taking resources from other organisms, but much of it through mobilization of new resources or efficient use of existing resources).
The other interesting point is that we do this by cooperating with each other. The competition that exists in markets is only secondary to the cooperation (e.g. salesmen compete for the privilege of cooperating with the customer).