Socialists and capitalists naturally take opposing sides on the question of how economically fair life should be. But so do various political parties which claim to be pro-market. So do theologians and philosophers. And so do ordinary people when they’re voting for school-bond issues or deciding how much to cheat on their taxes. Fairness is a potent emotional issue, but how is fairness to be delivered? It’s hard to build a political structure that provides economic fairness. The map is full of failed attempts, and so is this book. When a government controls both the economic power of individuals and the coercive power of the state, we get, at best, Shanghai. A businessman finds that one of his stockholders has tanks, artillery, and jet fighter planes. This violates a fundamental rule of happy living: Never let the people with all the money and the people with all the guns be the same people. There is another difficulty with political control of the economy which keeps even the best-behaved governments from using resources well. This problem was explained by the economists Milton and Rose Friedman in their book, Free to Choose. The Friedmans argued that there are only four ways to spend money: 1. Spend your money on yourself. 2. Spend your money on other people. If you spend your money on yourself, you look for the best value at the best price—knockoff Pings on sale at Golf- Fore -Less. If you spend your money on other people, you still worry about price, but you may not know—or care—what the other people want. So your brother-in-law gets a Deepak Chopra book for Christmas. If you spend other people’s money on yourself, it’s hard to resist coming home with real Pings, a new leather bag, orange pants with little niblicks on them, and a pair of Foot-Joy spikes. And if you spend other people’s money on other people, any damn thing will do and the hell with what it costs. Almost all government spending falls into category four. This is how the grateful residents of Ukraine got Chernobyl. Also, if fairness is important, what is really fair? We may say something like, “People have a right to food, a right to housing, and a right to a good job for decent pay.” But from an economist’s perspective, all those rights involve 3. Spend other people’s money on yourself. 4. Spend other people’s money on other people.
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