"Caring vs. Uncaring"

Nothing is more beautiful than a flawless, concise illustration of a particular concept. This is exactly what I ran across many years ago in an article by Dr. Walter Williams titled "Caring vs. Uncaring." The article and the argument therein perfectly corroborate my post about capitalism and its benefits. This post is somewhat of a summary of the article.

As I have argued and will continue to argue, capitalism and the free market system make for the most efficient outcomes, specifically the most efficient allocation of scarce resources. It leads to the best outcome for every individual in society. But let me suspend this belief for a moment to entertain an alternative proposition. What about the seemingly selfless Mother Theresa or the admirable work of the Red Cross or The Salvation Army or charities?

"In December 1999, Stephen Moore and Julian L. Simon wrote an article titled "The Greatest Century That Ever Was," published by the Washington, D.C.-based Cato Institute. In it they report: Over the course of the 20th century, life expectancy increased by 30 years; annual deaths from major killer diseases such as tuberculosis, polio, typhoid, whooping cough and pneumonia fell from 700 to fewer than 50 per 100,000 of the population; agricultural workers fell from 41 to 2.5 percent of the workforce; household auto ownership rose from one to 91 percent; household electrification rose from 8 to 99 percent; controlling for inflation, household assets rose from $6 trillion to $41 trillion between 1945 and 1998. These are but a few of the wonderful things that have occurred during the 20th century."

How did all these things come about? Hopefully the answer is pretty obvious. These things came about not because of selfless donation, but because of capitalism and its principles. People weren't concerned for others. They looked out for number one. People's attempts to profit allowed everyone to profit. I use my computer just about every single day. Do you think the laborers in Japan or China or wherever it was made simply wanted to make me happy? Or that the manufacturing company just wanted to help the world by providing affordable computers? No! They make sure that I can enjoy my cheap computer because in doing so they make sure that they themselves are better off. Essentially, in terms of the basic principles of economics, an increased producer surplus means an increased consumer surplus.

As such, all those wonderful things that came about during the 20th century were the result of humans pursuing profits. The unfortunate fact is that bureaucracy has rendered "profit" a dirty word, whereas "nonprofits" appear righteous and morally whole. I get so tired of hearing statements along the lines of "So-and-So is a nonprofit organization." Ok, does that mean they are completely selfless and righteous? Absolutely not. It is for this reason that privatized charities and such and more efficient. Well, really, most of the time, privatized everything is more efficient.

The politicians and liberal media have caused the word "profit" to have extremely negative connotations simply because most people don't understand the purpose and importance of profits. Think of it this way. Which sort of institutions produce the greatest amount of consumer satisfaction, grocery stores and computer manufacturers and clothing stores and the like or things like public post offices and motor vehicle departments? I think everyone can agree that it is the former. The survival of those institutions depends on profiting and in turn pleasing the average, everyday consumer like you and me. The latter examples do not.

Obviously markets don't always produce perfect results, "but they're the closest we'll
come to perfection here on Earth."

Read more at Armchair Economics.