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Saturday, 21 December 2013

Thought Experiment

Pythagorus and his lot worked by thought experiments alone. That’s what mathematicians do. What they tell us is true. That’s how Austrian economists work.

Here’s a thought experiment. It should help you to discriminate between policies.

Imagine an island. Fish and fruit keep the population alive. The population grows. It becomes harder to feed everyone. An island-wide conversation takes place. There are two parties: One group is desperate to ensure that fish and fruit should be divided equally; the other group has ideas about how to catch more fish and how to grow more fruit. Which group will you join? Are you insane?

We are insane. Our political parties vie with each other about how best to divide stuff. On the sidelines are people saying, “Division isn’t the issue! Production is the issue!”

They are shouted down.

One group wants division to be “equitable”; the other wants greater production. Which group will you join? Are you sane?

Just in case you are not, be aware that “free markets” give us vastly greater productivity than statist “equitable” distribution.

Since 1970 the number of people living in abject poverty (who do not know where their next meal is coming from, who expect a substantial proportion of their children to die before the age of five) has fallen by 80%. Eighty percent! Free markets have done this – including “free markets” in China, Vietnam and much else of Asia.

Opposing free markets is wicked.

Let’s distribute our production equally. Absolutely not! Let’s free the creativity of mankind to increase production.

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