Why I’m a Libertarian Part 4/4: The Harmony of Interests

For part 1 of this series, see The Coercive Nature of Law.
For part 2, see The Efficiency of Free Market Capitalism.
For part 3, see Negative Externalities of Government.

“The history of all hitherto existing society is the history of class struggles,” write Karl Marx and Friedrich Engels in their Communist Manifesto. Others might instead highlight the struggle between racial, ethnic, or national groups, between religions, between the sexes, or between any number of differently defined groups.

What all these perspectives miss is that throughout history, the dominant pattern has been inter-group harmony – peaceful coexistence and mutually beneficial cooperation and exchange. This harmony is occasionally interrupted by inter-group conflict, and because conflict is more interesting than harmony, it occupies a much more prominent role in our history books and our imaginations, but that doesn’t change the fact that conflict is the exception, rather than the norm.

Capitalists and workers might occasionally clash, but the norm is for both of them to cooperate to mutual benefit. Capitalists need workers to operate their machines, factories, offices, etc. Workers need capitalists because most work requires the use of expensive capital goods which most workers wouldn’t be able to afford on their own. Many forms of work also only produce sales revenue several months or years down the line, whereas most workers don’t have sufficient savings to wait that long and need an income right now.

Thus we have a harmonious relationship where capitalists benefit from workers and workers benefit from capitalists. This is not to say that there is complete agreement. For example, capitalists would like to pay lower wages and workers would like to receive higher wages, but the point is that at the wages established by the competitive market process, both capitalists and workers benefit.

A similar case can be made for the sexes. Most people live or desire to live in a romantic relationship with a member of the opposite sex. Or, as a pithy saying has it:

No one will ever win the battle of the sexes; there’s too much fraternizing with the enemy.

(This quote has been attributed to Henry Kissinger, but the case for that is very thin.) Beyond that, men and women differ in their abilities and inclinations, so that men benefit from women doing work that men are less suited or inclined to do and vice versa.

This last point also applies to different racial, ethnic, national, and religious groups. If Germans are better at producing beer than the French and the French are better at producing wine than the Germans, both nations benefit if Germans focus on producing beer and the French focus on producing wine, and then trade what they don’t want to consume themselves.

The amazing thing is that this pattern holds even in the extreme case where one group is better than another at literally everything. If German workers are twice as good at producing T-shirts as Chinese workers and ten times as good at producing cars, both Germany and China can still benefit from specialisation and trade. If the Chinese focus on producing T-shirts and the Germans focus on producing cars, more T-shirts and cars will be produced overall. Through trade, both nations can emerge from this process with both more T-shirts and more cars than they would have under autarky. This amazing result, typically attributed to British economist David Ricardo, is called comparative advantage.

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Wherever volunatry social interaction and market exchange prevail, we find mutual benefit and harmony, thanks primarily to the efficiency of the division of labour, the mutual advantage provided by trade, and comparative advantage. Wherever we enter the coercive sphere of government, conflict prevails.

Government sets employers against employees as each group tries to lobby government for laws which will give them an advantage. It sets racial and ethnic groups at each others’ throat as they try to jockey for special privileges. It pits men against women, taxpayers against retirees, landlords against tenants, creditors against debtors, etc.

Each group seeks to use the coercive power of the government to gain an advantage, and those who fail to lobby government, or do so ineffectively, will be at a legal disadvantage. In extreme cases, they might become second class citizens, or even be expelled from the country, imprisoned, or killed. In this way, governments create inter-group hostility and an enormous amount of resources is wasted on unnecessary conflict.

This is why we need to pare back government as far as possible. Give people autonomy over their own lives and let them freely engage in cooperation and trade. Then we will see the beautiful harmony of interests shine through.

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