I of course understand that this book is coming from the viewpoint of a likely advocate of capitalism, but then all books are written mostly from an influenced and established point of view and therefore opinionated rather than presented as absolute truth. Still, I like Robert P. Murphy’s presentation.
Here are two passages that struck me:
The free market’s effects are far from arbitrary. Every time you spend tree dollars on tomatoes, you are ultimately “voting” for some of the nation’s scarce farmland to be reserved for tomato production. Smokers similarly “vote” for some of the land to be reserved for tobacco production. When a business has to shut down because it is no longer profitable, what that really means is that its customers valued its products less than they valued other products that other businesses could make with the same materials. If a business is enjoying high profits, that’s the market’s indication that it is using its resources more effectively than other firms.
While fairly obvious, Murphy’s statement brings it home that the market is driven by the consumer–not the producer–and follows the long established theory of supply and demand. If no one buys your plastic pickle, you’re not going to stay in business much less become a millionaire. This “vote” by the public puts the ball squarely in their own court.
While we may say that marketing is a huge factor in what the public buys, it still, to me, would come down to a rational purchasing decision by the public and if some individuals fall for idiotic advertising claims, it’s still in their control to make or break the company.
This to me was also interesting and noticeable in much thinking today:
Even though the bankruptcy of socialism is manifest to everyone, the intellectual elite continue to despise capitalism. For these people, virtually every social ill can be blamed on the free market, and the solution always involves more money and power for government.
While this seems to be a bit overboard in the “is manifest to everyone” portion and the grouping of the “intellectual elite” into a single mindset, the rest of this statement has been voiced a lot lately. Activist groups are ready to jump on anyone and anything to claim offense of some sort against their own beliefs whenever they do not agree with a product or process and seem to forget that “free market” means not only that people are free to attempt to market their own ideas, the public is just as free to accept or reject them.