If you try to artificially maintain a price, you will simply introduce distortions

One Cosmos Under God Robert W. Godwin

Charles Davenant, an English political economist, wrote in 1699 that "Trade, without a doubt, is in its nature a pernicious thing; it brings in that wealth that introduces luxury; it gives rise to fraud and avarice, and extinguishes virtue and simplicity in manners; it depraves a people, and makes way for that corruption which never fails to end in slavery...." Here again, this could be Dennis Kucinich, Ralph Nader, or some other contemporary secular leftist speaking.

According to Jerry Muller, author of a fascinating book entitled The Mind and the Market (from which the quotes above and below were taken), "there was little room for commerce and the pursuit of gain in the portrait of the good society conveyed by the traditions of classical Greece and of Christianity, traditions that continued to influence intellectual life through the eighteenth century and beyond." But this approach to economics utterly backfired and only created more scarcity and therefore ceaseless war and plunder.

That is, "classic" economic theory, if that's what we want to call it, was predicated on the idea that there was a fixed amount of wealth in the world. Indeed, this is probably an extrapolation -- again, at the human margin -- of the belief that God created the world once and for all. The idea of unlimited economic growth probably clashed with the unconscious notion of a timeless and unevolving world given to us by a creator. Therefore, economic development was hindered by all sorts of dysfunctional ideas, such as a fixed "just price."

One of the sources of hostility to Jews is that they were often merchants, since they were forbidden to engage in most trades. To the economically innumerate, they cannot understand the merchant's role in buying and selling goods at a profit, since the "profit" seems to reflect no added value. Thus, today we still see the enduring hostility to profits, whether it is Walmart, or oil companies, or pharmaceutical companies, or CEOs. Leftists cannot understand that in a dynamic economy, one person's gain is not another person's loss. It is reminiscent of the Scholastic axiom that "money does not beget money."

Indeed, according to Muller, "in early medieval iconography, money was often connected with excrement, and portrayed as filthy and disgusting" -- a tip-off to the psychologically primitive roots of the left's hostility to wealth. Similarly, merchants were regarded with great suspicion and often literally depicted as blood-sucking parasites, unlike "honest" people who worked with their hands and lived off the land.

Even today, virtually anyone on the left has difficulty wrapping his mind around the idea that there is no such thing as a "just price." Rather, there is only the price someone is willing to pay. If you try to artificially maintain a price, whether rent control or a "living wage," you will simply introduce distortions into the marketplace which will ripple outward and cause further distortions -- inflation, scarcity, inefficiency, etc. posted by Gagdad Bob at 6/06/2007 07:46:00 AM 38 comments links to this post