Important Words

Don Boudreaux posts an important Quotation of the Day from Deirdre McCloskey (see Don’s post for full cite):

Unlike stealing or taxing or highhandedly appropriating, exchange is a positive – not a zero- or negative-sum game.  If Sir Botany must tempt the peasants with offers of educational services or consultation on interior decorating in order to get the barley, both he and the peasants are better off.  If he just grabs it, only he is better off and they are worse off.  If I buy low and sell high, I am doing both of the people with whom I deal a favor.  That’s three favors done – to the seller, the buyer, and me in the middle and no one hurt except by envy’s sting.  The seller and buyer didn’t have to enter the deal, and by their willingness they show they are made better off.  One can say it stronger.  Only such deals are just.

I was exposed to the idea of that voluntary trade is a win-win much too late in life. This is the foundation upon which we can credit our superb standard of living, but we all too often are taught to despise rather than celebrate it. We should despise, or at the very least, be more cautious of the unjust transactions.

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One thought on “Important Words

  1. It’s tempting to believe that when we are “forced” to pay a “high” price for one thing or to sell another at a “low” price, we are on the losing end of a deal and that it’s not “fair”. However, if we consider the alternatives – wanting to buy or sell something, but having no option of doing so – it’s obvious that this alternative universe is less good than one in which we have more options.

    Who is it that “forced” us to pay a “high” price or accept a “low” price? Why are the high and low prices considered to be high or low? If we bought something, we obviously wanted it more than the cash we chose to spend and if we sold something, we obviously wanted it less than we wanted the cash we received in exchange.

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