P.J. O’Rourke Lite – The Free Market


The free market is the greatest repository of our freedoms.  We don’t often exercise our freedoms of speech, belief, and assembly for anything of equivalent consequence to our nation’s or our people’s freedom.  I don’t know much about business, but I know enough to thank it for existing.
 
Free Market in Japan
 
Business investment defines humanity.  If a dog has a surplus s/he will eat it all and vomit it up rather than give a portion of it to another dog in return for shares in ( ) the chewing of shoes.

Business investment defines civilization.  Barbarians don’t raise money through debt and equity.  They raise money through stealing. ( ) Business investment is one of the most important ideas in history.  If it weren’t for business investment, all the inventors, innovators, manufacturers, wholesalers, and retailers who have brought prosperity to the modern world wouldn’t have been able to as they have.

The free market is not a creed or an ideology ( ) it is simply a measurement.  It is a bathroom scale.  We may not like what we see when we step on the bathroom scale, but we can’t pass a law making ourselves weigh 165.  Liberals and leftists think we can.

The free market gives us only one piece of information, but it’s important information.  We ignore it at our peril, the way the leaders of the old Soviet bloc did.  They lost the cold war not because of troops or tanks or Star Wars missile shields.  The Soviets lost the cold war because of Bulgarian blue jeans.  The free market was attempting to inform the Kremlin that Bulgarian blue jeans didn’t fit, were ugly and ill-made, and nobody wanted them at any price.  People wouldn’t wear Bulgarian blue jeans—literally not to save their lives.  But the Kremlin didn’t listen.  And the Berlin Wall came down.
 

Ugly-Fitting Designer Jeans

I’m Sorry, Folks–I Can’t Tell–Are Those the Bulgarian or Designer Jeans?


 
Opposition to the free market is forever expressed in outrage at capitalist success.  Capitalism exploits workers, robs widows and orphans, and concentrates wealth in the hands of the rapacious few.  Critics of the free market think of capitalists as being  ( ) the faceless and thus even more wicked partners at Goldman-Sachs.  ( ) but that’s not who capitalists are, and capitalism is ( ) not a product of the free market anyway.

To undertake any material project—whether it’s the Great Pyramid, a hospital, or a paper mache puppet for a preschool, requires a fund of accumulated resources of some kind whether it’s money, or just paste and recycled paper.  This is “capital”.

Capital can come from savings.  Capital can come from borrowings.  Capital can come from getting something needed for the project by trading a share of ownership of the project once it’s finished (this is what stocks are).  Capital can come from paper money that has no real worth; e.g. that a bank has pulled out of its ass.

 
Capitalism, so-called, is when people accumulate capital of their own free will for use on freely-determined projects.  The fact is that most of these projects flop.  What’s good about the free market is that it lets capitalism fail.  Think of all the wonderful moneymaking ideas people get—and you’ve probably had some of these ideas yourself:  Chocolate-covered hairballs to give your feline something yummy to cough up; scented candles for men—“Mandles”—that fill a guy’s home with smells of “Gear Oil” and “Frying Meat”; FunScreen to protect children from dangerous exposure to fun.  Use FPF 40 if the kid has a skateboard.

Imagine a world where all such schemes come to fruition.  At the end of 2008 and the beginning of 2009, America conducted an economic intervention that kept businesses that were staggering around, intoxicated by overtrading, and blinded by MBA moonshine from falling down the manhole of liquidation.

“Moral hazard” is the term economists use for a situation that reduces the incentive to avoid bad economic behavior. 

The message that the U.S. government sent to the broke banks and beggared financial institutions was “Don’t you ever do this again or we’ll give you more money.”   After which there was a flurry of government regulatory activity to make sure it was illegal to do “this” again.  And the banks and financial institutions won’t do “this” again.  They’ll do “that”.  John H. Cochrane, professor of finance at the University of Chicago ( ) pointed out that “the regulatory system ends up encouraging artificial obscurity.”  Make the rules tougher and they’ll play the game tougher.  Are the people named Masters of Regulation likely to be quicker and better motivated than the people named Masters of the Universe?

Professor Cochrane again:  “To give government officials the power to bail out firms at their discretion, especially if those officials are elected or political appointees, is practically to guarantee a bailout.”

The business of government is failure-proof; i.e. government props up the unpropworthy. ( ) You’ve just explained where those Bulgarian blue jeans came from.  Fortunately, most of America is still allowed to fail.  The free market teaches us a lesson in the value of failure.
 

Orange and Black Striped Stinkbugs Mating

If a Stinkbug Falls in the Forest, Is It a Bad Thing?


 
Cherry-pickings from P.J. O’Rourke’s, “Don’t Vote, It Just Encourages the Bastards”, pp. 36-46, 122-23—Selected lines excerpted, italics indicate paraphrasing.  Closed parens ( ) used versus ellipses to indicate skipped portions of lines.
 

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