The Power of Voluntary Exchange
Trying to force people to do what they would prefer not to do, does not work. Trying to force them to share the products of their labour equally with the rest of the nation, also does not work.
On the surface, submission to force might appear to produce results but what would those same people have produced and achieved under different circumstances? Freed slaves, receiving wages, were more productive than captive slaves. People in free countries are much more productive than those under the yoke of totalitarian regimes.
The disappearance of the Iron Curtain exposed the claimed productivity of the Soviet Union to be an over-statement; published productivity figures were the result of a chain of fabrications put together by factory managers, knowingly carried forward by superiors, all anxious to convince top political leaders that the goals of their economic plans were being met.
In An Autopsy of the Soviet Union, author Gordon M Hahn reported in 1998 that, “Soviet documents now in the Hoover Archives reveal seventy years of economic bungling. He also wrote, “As the Soviet communist regime veered toward collapse, some of its leaders belatedly became aware that the market, as General Secretary Mikhail Gorbachev himself put it in 1990, is ‘one of the great achievements of humankind.’ Recently declassified documents in the Hoover Archives reveal not only the surreal essence of the Soviet economic order but also that the Soviet leadership had increasingly little room to manoeuvre in its desperate effort to compete economically with capitalist economies.”
According to journalist Hedrick Smith, when Russian scientist, Andrei Sakharov, 1975 recipient of the Nobel Prize for physics, who with Aleksandr Solzhenitsyn and Roy Medvedev, was one of the Soviet Union’s three leading dissidents, became disenchanted with socialism he “criticised centralised economic controls. He attacked the vaunted Soviet system of free education and medical care as an ‘economic illusion’ based on underpaid doctors and teachers and offering ‘very low’ quality of services.” He also “condemned the ‘pernicious’ effects of the hierarchical class structure in which the Party-government-intellectual elite enjoys ‘open and secret privileges’ such as better schools, clinics, special stores and a system of supplemental salaries in special envelopes.”
It is notable how the leaders of movements calling for “equity” and “equality” and the expropriation of capital from its owners, exempt themselves from their own injunctions once they gain political power. As happened in the Soviet Union, they just cannot resist a better life for themselves using the appropriated resources that prove inadequate to provide a better life for the nation but supremely adequate to provide a luxurious living for the favoured few. It is also notable that those who historically have promised to lead the masses out of poverty quickly turned to force and suppression to quieten protests when their policies made matters worse for the poor instead of better.
Fortunately, there is an alternative option that has the potential to create peace where there is strife, affluence where there is poverty, good will where there is hostility, smiles where there are frowns, and politeness where rudeness is the order of the day. That option, which is capable of altering a society so dramatically, is called voluntary exchange. It sounds simple but has profound implications.
Any government that adopts voluntary exchange as the measure by which it tests all its proposed laws, policies and actions, will assuredly become popular and leave an indelibly positive stamp on the people who elected it to govern. Such a government will expect citizens to interact voluntarily and will prohibit any action that includes the initiation of force, the threat of force, or fraud against others or their property. The rule of law, in the true sense of the term, which requires a government and its officials never to initiate arbitrary force, threats or fraud against the people, will prevail.
Voluntary exchange, if adopted as a fundamental rule of governance and a rule determining exchanges between individuals, would have far-reaching consequences. It implies that government will not attempt to force unwilling inhabitants of the country to do what is patently not in their interests to do. For instance, no young medical graduates would be forced by legislation to serve time in deep rural areas unless they bind themselves contractually, in advance, to do so. A government subscribing to voluntarism would not engage in any form of business in competition with its citizens. It would recognise that its ethos prohibits it from giving preferential treatment to public enterprises or from prohibiting others from competing with them. It would also not plan from the top and seek to impose its plans by force on an unwilling and unhappy people.
The benefits for government of adopting a voluntarist approach are manifold. It will not find itself taking sides between citizens because citizens in such a society would demand impartial governance free of threats and coercion. Private citizens would be responsible for the provision of all goods and services and government’s task would primarily be to eliminate crime, force and coercion from society and to establish statutes and institutions that support the creation of a voluntary exchange society.
Entrepreneurs would respond to the demands of citizens, which would guide their planning. The investment of their money would create the firms that provide for people’s wants. Taxation would cease to be a form of perverse punishment for the successful who have best served their fellow citizens. Government, instead, would levy taxes reluctantly, and with consent, mindful that taxes taken from the most productive citizens reduces the capital available to entrepreneurs to invest in future production, the real creator of increased employment opportunities.
In a voluntary exchange society employment would be by mutual agreement between worker and employer without government intervention, except if there are occurrences of force, fraud and coercion. There would be no statutory barriers to employment and anyone who really wanted to work would be able to find a job.
In such a society there would be high economic growth, interactions would be peaceful, and the people industrious. Politicians would be popular and able to take credit for the good things that are happening, no longer being blamed for things that should not be under their control anyway. If you were a politician, would you not set about creating such a society?
By Eustace Davie,
A director of the Free Market Foundation.
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