If Interfering With the Market Makes People Better Off, Then Interfere

David Schmidtz acknowledges the obvious point that the prices of goods and services vary in accordance with their scarcity, not with how important they are to us. He admits that we may know that those who supply scarce goods and services would be willing to supply their goods and services even if the price were far lower, but then asks: “What would get us from here to a conclusion that we have a right to prevent would-be buyers from paying market rates for services in great demand?”

But why is that the question to ask? Why should we assume that sellers have the right to get as much as the market will bear? Two families acquire similar looking acreages of Texas grazing lands. One is fortunate: their land has oil beneath the surface and they become fabulously wealthy. The other is unfortunate: their land has no oil, and despite working as hard as their neighbors, and applying similar intelligence, they remain poor. What gives the former “a right” to their wealth? In my view, nothing. We believe in an inherent right to property because we believe that somehow rugged individuals living in a state of nature can acquire and retain wealth. That is nonsense, of course. Oil would have little value if society did not provide the infrastructure that enables us to use it. Wealth does not exist without society, and the security that society provides.

So instead of asking what gets us to the conclusion that “we have a right” to interfere with market mechanisms, why not ask, instead: “Would interfering with market mechanisms make people, on the whole and in the long run, better off?” That’s an empirical question, and the answer will obviously depend on the precise nature of the interference, and the context in which it occurs. Often, the answer will be in the negative. But sometimes, it might be “yes”. Bertram and Brighouse, in their blog, mention the evidence that in societies that are more egalitarian than the U.S., those at the bottom are significantly better off, while there is ample reason to believe that those at the top would not be significantly worse off if they had a little less income. When such opportunities to make people better off are on offer, we should not allow vague ideas of supposed rights to block governments from improving the welfare of those who live within their jurisdiction.

Also from this issue

Lead Essay

  • “Everyone cares about inequality. Caring about inequality, though, is not enough to make inequality matter,” writes political philosopher David Schmidtz. “Unless we have the right sorts of reasons to care, equality does not matter, at least not in the way justice matters. So, why care about inequality?” Drawing on his illuminating new book, Elements of Justice, Schmidtz lucidly clarifies which inequalities matter, and why, in a world where our fellow citizens are partners in a cooperative system of joint production, not competitors in a race.

Response Essays

  • “When Jeremy Bentham first suggested that the pains and pleasures of an African should count as much as the happiness of an English person,” philosopher Peter Singer writes, “this view had radical implications, for slavery was still legal in the British colonies. Today, the suggestion that the pain of a nonhuman animal might count as much as the pain of a member of our own species is still radical. That is why this sense of equality remains important.”

  • Picking up where David Schmidtz’s lead essay ends, Cato Institute Senior Fellow Tom G. Palmer argues that a common line of reasoning used to justify the authority of the state to rearrange the unequal distribution of wealth is based on a mistake. The kind of equality that matters, Palmer argues, is the “equal right of every person to exercise choice over his or her own person.” The inequalities that emerge from the voluntary interaction of persons exercising that right are not “ours” to reconfigure.

  • In his reply to David Schmidtz’s lead essay, Yale political scientist Jacob Hacker agrees that material inequality as such is not our greatest concern. “The problems arise,” Hacker argues, “when resource inequalities translate into substantial, cumulative, and self-reinforcing inequalities of political power.”