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14 Comments

1. Dom says

   This is highly recommended by Don Boudreaux at Cafe Hayek (and by me, if that matters):

   http://video.pbs.org/video/2160792049

   Posted October 28, 2011 at 8:25 am | Permalink
2. Malcolm says

   And me too.

   Money quote:

   “…if you let people go through voluntary transactions that produce mutual gain, you will increase overall welfare; you will improve the position of those on the bottom. But increased overall welfare will produce greater skews in income — because in a world with genuine opportunities, you’ll create billionaires; in a world without it, the people at the bottom will remain where they were, there’ll be nobody at the top to subsidize them, so everybody will turn out to be worse off.”

   Posted October 28, 2011 at 9:40 am | Permalink
3. Severn says

   if you let people go through voluntary transactions that produce mutual gain, you will increase overall welfare

   Sounds likes a statement of religious belief.

   Posted October 28, 2011 at 2:15 pm | Permalink
4. Malcolm says

   Well, it’s a belief. I don’t know about ‘religious’.

   Posted October 28, 2011 at 3:34 pm | Permalink
5. bob koepp says

   I’m content to set aside the question of whether or not the belief in question is an article of faith. Whether it’s true, however, depends crucially on whether or not mutual gain, in absolute terms, is sufficient to produce an increase in overall welfare. Let’s see… Suppose that consequent to some economic transactions, I gain $1 while you gain $1,000. Letting supply and demand do their work, it’s quite likely that I’ll have less “real” purchasing power than before this “mutual gain”.

   Posted October 28, 2011 at 4:29 pm | Permalink
6. TheBigHenry says

   “Letting supply and demand do their work, it’s quite likely that I’ll have less “real” purchasing power than before this “mutual gain”.”

   Suppose that were the case. Then it wouldn’t have qualified as mutual gain.

   Posted October 28, 2011 at 8:25 pm | Permalink
7. bob koepp says

   TBH – Well, sure, if you define mutual gain in terms of an increase in overall welfare… But then the claim that voluntary transactions that produce mutual gain increase overall welfare becomes an empty tautology — utterly uninformative.

   Posted October 28, 2011 at 9:07 pm | Permalink
8. Malcolm says

   It’s a simplistic formulation, a sound-bite.

   What Professor Epstein was getting at, I think, is that trade is not a zero-sum game, and that a free marketplace has shown itself throughout history to be the most effective engine for generating general prosperity.

   Obviously there will be be plenty of room for disagreement about the proper role of government in regulating the marketplace, but I imagine that Professor Epstein would argue that when the primary objective becomes reducing inequality, rather than fostering a robust market environment, the overall growth of prosperity declines.

   Posted October 28, 2011 at 10:38 pm | Permalink
9. Malcolm says

   Cafe Hayek, by the way, is an excellent resource for conservatives with an interest in economics. Thanks for mentioning it, Dom.

   Posted October 28, 2011 at 10:46 pm | Permalink
10. bob koepp says

    It’s precisely the simplistic, sound-bite quality of the formulation that I object to. It’s almost as simplistic as the notion that trade is a zero-sum game.

    Economic transactions are complicated things, transacted by complicated human beings in complicated circumstances. There is no simple relationship between economic gain and overall welfare.

    Posted October 29, 2011 at 6:53 am | Permalink
11. Malcolm says

    Yes, of course just about everything is terribly complicated, and I’m sure Professor Epstein realizes that. This was a nine-minute interview.

    His point, I think, is that in general, and compared to other systems, voluntary trade in the free market does the best job of increasing overall prosperity.

    Posted October 29, 2011 at 11:24 am | Permalink
12. bob koepp says

    Malcolm -
    With that, I have no quarrel — none at all. Stated clearly and directly, as you have done, it stands very well on its own. The good professor didn’t need to reach for a sound-bite.

    Posted October 29, 2011 at 11:32 am | Permalink
13. TheBigHenry says

    bk,

    If you define mutual gain in terms of a zero-sum game, then you get — a zero-sum game. This leads to a not-quite-empty tautology, nor one that is utterly uninformative, but close enough for this discussion.

    Posted October 29, 2011 at 11:33 am | Permalink
14. Malcolm says

    Good, Bob! Glad we agree.

    Posted October 29, 2011 at 12:18 pm | Permalink