As Dispatch contributing writer Leah Libresco Sargeant and others have pointed out, human beings are dependent creatures. “Each of us begins our lives utterly dependent on one woman,” Libresco Sargeant wrote in her most recent book. “Most of us die in a state of deep dependence once more. All of our lives in between are dappled with dependence, whether through disease, disability, or exposure to the needs of others.” We’re surrounded by good things we didn’t create. We cannot meet all our needs by ourselves. Interdependence, rather than independence, carries us through life.
I’ve noticed, though, that writers who focus on this fact rarely make the observation that Kevin D. Williamson has—that perhaps the best example of this interdependence is market economics. If any of us had to single-handedly build our own house, grow all our food, fix all our appliances, sew all our clothing, etc., we would struggle merely to survive. We owe our existence to the toil of those around us, and we benefit from the labor of other people whose names we don’t always know and whose faces we don’t always recognize. As Jonah Goldberg, Scott Lincicome, and Williamson have all pointed out, without this large-scale interdependence, we would all be eking out subsistence lives, constantly worrying about disease, poor harvests, and bad storms.
Each of us is dependent on our loved ones, friends, neighbors, and parishes at various points in our lives. But we also depend, in ways we often overlook, on the vast network of exchange which undergirds modern living. We expect the lights will come on when we flip the switch, because the power plants are operating on schedule, and the lines which transport electricity to our homes aren’t damaged, and the coal or natural gas which fuels the power plants has been extracted from the ground and brought to the right place. We only notice how desperately we need the labor of others when one of these systems fails.
In short, we depend on a complex network of peaceful human cooperation which extends all around us and in which we live our lives. And another word for this network is capitalism.
My favorite lesson from Leonard Read’s “I, Pencil,” isn’t “nobody knows how to make a pencil.” It’s that the greatest example of peaceful cooperation on a mass scale in the history of the human race is the market. Read points out that no central planner can coordinate people around the world to create the conditions in which a pencil can be produced, but he also points out that, unlike almost every other example of human cooperation on a mass scale, this process doesn’t require coercion. In the case of the pencil, (but for the occasional, unfortunate victims of repressive regimes such as China and Russia) all the participants in the vast network of farmers, laborers, merchants, sailors, and manufacturers participate of their own free choice.
In Two Cheers for Capitalism, Irving Kristol explains that while it is true that capitalism is the best example we have of peaceful human cooperation on any grand scale, it doesn’t feel cooperative. Communism, on the other hand, feels cooperative, but actually depends on coercion, because it is implemented at gunpoint. The market doesn’t feel cooperative because it involves money. The interactions that produce the pencils and cars and heat and clothing upon which we depend are voluntary, but they require the exchange of payment. To many people, that feels icky. Or frigid, as the case may be.
But whether or not we think the world should operate some other way, in the world we inhabit, there’s no such thing as a free lunch. We have to work to provide for ourselves and our families. If we want something from other people, we have to give them something in return.
I want to defend the principle of mutual exchange as a matter of fairness. Not because I want to make sure I always get what I want, but because I never want to take advantage of another person. The important part of the transaction to me isn’t what I receive, but what I give to the other person.
Capitalism is built upon mutually beneficial exchange; such exchanges are mutually beneficial because each party ends up better off after the exchange. Each party to the transaction is better off, because each person gets what he or she values more. The baker has more bread than he can eat, but he needs money to pay his mortgage. When hungry customers go away full and the baker goes away with enough money to pay his mortgage, all parties are better off than they were before the exchange.
One definition of justice is giving to each what he or she is due—paying people what they are worth. Just as we wish to be treated fairly by others, we need to treat others fairly. And one tenet of that is not taking from others without giving them something in return (except in cases where they voluntarily give us something as a gift). Just as we don’t want to be shortchanged, we need to make sure we don’t shortchange others.
Some will still object that the system we are describing depends on self-interest. They may quote Adam Smith’s The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”
But while at first glance this sounds rather cold, at second there is something beautiful and noble about it. We depend on the butcher and the brewer and the baker. In turn they depend on their customers and their suppliers and on the people from whom they purchase their clothing and tools. This network of interdependence works, even though it doesn’t require anyone’s benevolence. And it persists even when benevolence wanes and the people involved grow tired. It’s a marvel that we can walk down the street and obtain meat, bread, and beer without having to go out and produce them ourselves. It’s a marvel that everything we need, everything on which we depend, is available almost 24/7 in our modern economy.
It would be nice if this network of cooperation worked on benevolence, because it would be nice if people were always naturally benevolent. But if we were, we would already be living in heaven. We wouldn’t need money, and we wouldn’t need governments either. As James Madison noted in Federalist 51, “if men were angels, no government would be necessary.” Here in the fallen world, we can’t depend on other people to be angels. We need laws and we need money. If we did depend on other people to be angels, we wouldn’t reliably have the meat, beer, bread, or anything else we need.
The marvel of capitalism is that self-interested human beings can have these complex networks of mutual cooperation without coercion. The fact that we aren’t angels makes this ability to depend on the labor of others even more miraculous.
Yes, we depend on their self-interest. But as Adam Smith knew, humans aren’t solely self-interested. And more importantly, when we say that capitalism is about self-interest, we aren’t saying that it’s about selfishness. Indeed, the market teaches us not about our own self-interest, but about other people’s. We don’t improve our lots by thinking constantly about our own needs. We improve our lots by focusing on how to meet other people’s needs.
The fundamental lesson of honest business is that the way to make yourself better off is to make other people better off by solving their problems. We get ahead by enriching other people, whether that means fixing their leaky faucets and repairing their toilets, selling them vehicles that transport them safely and reliably to where they need to go, or investing the seed money in their business ventures so that they have the capital to launch.
Let’s pause for a moment to say a word about cheating and scamming and other forms of exploitation. You’ll note I say “honest business.” There will always be people who try to get ahead by scamming others. Sometimes, these people succeed. Often, they don’t. Often, if they do succeed, it’s not for very long. But it’s a sad reality of the world that some people lie and cheat and steal.
The crucial fact is that this conduct would exist in any system. In a feudal system, in a barter economy, in socialism, in communism, there would still be people who try to cheat. One can point to the Soviet apparatchiks who ate caviar while their people starved as easily as they can point to Enron. Until we go to heaven, we will not live in a perfect society without any bad behavior.
Speaking of heaven, it’s been said that hell is a place where everyone sits around a table laden with a spectacular feast, only they are all miserable because they only have too-long spoons, and they can’t eat with their hands. Heaven, according to this story, is exactly the same, except that everyone uses their too-long spoons to feed each other. I don’t know whether this is an accurate depiction of heaven and hell. What I do know is that a good society is one in which everyone works to make other people better off.
And, paradoxically, this is what a capitalist system is: a system in which each of us works to solve others’ needs. We can enjoy the food, because we do benefit from others’ labor. And the best part about it is that we do so of our own free will. We aren’t forced to feed other people by a soldier with a rifle.
If we didn’t depend on a great network of other people—the butcher, baker, brewer, and millions of others—we would always be hungry. What food we have would always be meager. We would need to work very hard to make those too-long spoons fit food in our mouths, if we could manage it at all. But we don’t have to do that, because we can depend on the efforts of all the people around us. The more guests at the feast, the more we will be dependent on a greater number of people. But, paradoxically, the better we will eat, as each of us is able to specialize more narrowly on serving our neighbors in the ways we best can. As Adam Smith put it, “the division of labor is limited by the extent of the market.” But perhaps it’s more appealing to say, “Humans are a positive good,” because we each contribute to the well-being of our fellow man, and in turn they contribute to our well-being.
And though we know that they are acting out of their own self-interest, we can learn to be thankful for their efforts. And even though we are working for other people in order to meet our own needs, we can learn to enjoy helping other people, too. We can learn to take pride in making other people better off. We can learn to take pleasure in their benefit as well as our own. And in so doing, we can learn to become a little better than we are.
