liberals, and all other kinds of economic levelers think that unconstrained industry, agriculture, and commerce lead to the exploitation of people who aren’t very good at these things. A little bit of immoral wealth and a great deal of unconscionable poverty is supposedly thereby created. It was Adam Smith in The Wealth of Nations (published with happy coincidence in 1776) who originally argued that a free market is good for everybody. Smith seems to have been the first person to realize that all voluntary exchanges increase prosperity. Wealth is created by any swap. It may seem like an even trade, but each trader gives up something he values less in order to receive something he values more. Hence the wealth of both traders grows. When Neolithic spear makers did business with Neolithic basket weavers, the spear makers were able to carry things around in a manner more convenient than skewering them on spear points, and the basket weavers were able to kill mastodons by a method more efficient than swatting them with baskets. The free-market outcome benefits all. It’s moral. And the beautiful thing about this morality is that we don’t have to be good to achieve it. In the most, perhaps only, famous passage from an economics book, Adam Smith states, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Smith saw that a man’s selfish concern with his own well-being is a desirable, indeed, a splendid thing for society. “[He] intends only his own gain,” wrote Smith, “and he is in this . . . led by an invisible hand to promote an end which was no part of his intention.” That end is the end this book is about: economic progress. The general morality of the free market, however, does not answer the specific objection of unfairness. Economic liberty leads to differences in wealth. And the differences are enormous. The “wealth gap” is the subject of a critical debate about economics. The perception of unfairness is the reason that enormous numbers of the world’s decent and well-meaning people, in fact the majority of them, do not rush to embrace the free market in its totality. Complete economic liberty would mean a system like Hong Kong’s under John Cowperthwaite with no barriers to trade or capital flow, and no barriers to labor flow, either; no check on immigration, no minimum wage, no cost controls, and no attempt to create a fair society. This is a daunting prospect, and it’s not just the Swedes and Fidel Castro who are daunted by it.
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