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Litmus Test

A student of mine was upset about some actions of a corporation he learned about in a Law class here. His immediate conclusion to me was, “this is why we need socialism.” Now, I am almost sure that folks who say this don’t actually know what socialism is, nor are they prepared to discuss the history of it, or the economics of it. In case you wish to have a discussion on issues like this (and others) there is a really fruitful and simple way to proceed.


Just ask the person a question. “I can respect why you think this. But can you do me a favor? Can you imagine getting your ideal world in place, and then rather than “your guys” being in charge, how would you feel if the person/people running it were people you completely mistrusted, despised and disagreed with? Would you feel good about your system? Why or why not?”

I am sure you’ll have an interesting conversation. I thank Bryan Caplan  for discussing this. I remember reading him some time ago on his invaluable Museum of Communism site.

5 Responses to “Litmus Test”

  1. Speedmaster says:

    Bravo, you of course nailed it.

  2. coyote says:

    I often get asked, as a libertarian, why I trust private corporations more than the government, and then the person talking to me likely rattles off a long list of private bad actors (Enron is always on the list).

    I respond that I do not trust private actors more than people in government. What I trust more is the incentives of private actors, and the accountability mechanisms I have over them. Enron, for example, was killed by the market long before the first government prosecutor even showed up on the scene. If I don’t like a private company, I don’t do business with it, an opt-out that is not available to me when dealing with the government.

    In fact, when poor performing companies stay in business (GM) or I am forced to deal with a single monopoly (my electric service), all-too-often this is because of government intervention, not the lack of it.

  3. 1) It is a form of John Rawls’ challenge: design your perfect society… no, you do not get to pick your place in it. Here, you design your perfect society and put your enemies in charge.

    2) For a graduate criminology class in Miscarriages of Justice and Wrongful Convictions, I wrote my term paper on Arthur Andersen. Their conviction was overturned on appeal, but they were dead. Being associated with Enron killed them as partners and clients fled.

    Long ago, writing for Ayn Rand, Alan Greenspan praised the integrity that is required when (then) millions (now billions) of dollars in value are exchanged with a phone call. On a more mundane note, back before everthing went to http://www.com, Newt Gingrich pointed out that you dial an 800 number, talk to someone you never met, give them your credit card number, and show up at the airport actually expecting a ticket to be there waiting for you.

    The fundamental morality, honesty, and integrity of the marketplace is taken for granted even by people who think they want socialism. When was the last time you saw anyone without shoes? We have no government shoe agency, no Department of Clothing, and just about all of our shoes are imported, whether from China or Italy… although, I am proud to say that my new Redwing work boots were Made in the USA.

  4. Harry says:

    MM, I know this is sliding a bit from WC’s topic, but it was for us, and I assume still is, not unusual to do a five-figure heifer deal on a handshake with Amish farmers.

    Of course, the heifers were never loaded on the truck before the cash was handed over.

  5. pjt says:

    Kip’s law: “Every advocate of central planning envisions himself as the central planner.”

    And then there’s Worstall’s addendum.

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