Tuesday, October 23, 2007

Thanks for acting in your own self-interest 

Phil Miller and John Palmer talk about the sign that says "If you ate today, thank a farmer." Or for that matter "If your child can read, thank a teacher" ... as if I would have let my child sit in front of a TV or sit alone on a swing illiterate if it wasn't for public education.

Should we thank these beer distributors in London for hoarding the resources to make beer (which means not used for ethanol, e.g.) in a rainy summer so that we can have lower prices this Christmas? Should we compensate them for the losses they took on warehousing the suds? Or do we just allow them to make a loss and think we're just lucky because of the weather?

As the Stossel video below shows, the farmer you are thanking doesn't even know your name; at least the teacher knows your child's. The beer distributors are making a loss but sell to you cheap beer during the holidays, not because they want your thanks but because they don't want to pay to warehouse that beer anymore. What motivates all of them is the desire to earn a living, to trade with people they do not know. The growth of our standard of living depends in great part on being able to trade not with just the people you know but those you don't, not out of friendship or love but one's own self-interest. The institutions that develop to permit this, and to widen that circle of strangers, are what we collectively call "the market".