Philosophy 101

Free Market Cure offers good documentaries on the wrongness and evil that is socialized medicine. They do a decent job at exposing the misleading use (surprise!) of statistics on the collectivist/altruist side. I also particularly love this cartoon of Michael Moore. The project is sponsored by The Moving Picture Institute, which supports documentaries advocating a free society. On a side note, another notable project they funded is the documentary Indoctrinate U, dealing with the denial of individual rights in Higher Education.

Bill Gates is facing another antitrust case, this time regarding his charitable foundation. Apparently, it’s influence in the philanthropy sector has become so great that government entities like FEMA (we all recall how FEMA saved the day during Katrina) and other charities like the United Way and the Salvation Army have been eager for the Justice Department’s antitrust division to launch an investigation.

The investigation, cheered on by Senators Hillary Clinton and John McCain, has bipartisan support. Both McCain and Clinton released a joint statement, averring that, “The free market is a wonderful thing, but how can we expect the government and other organizations to match the giving power of Gates? The free market in philanthropy is going to give us the same results as the free market in computers and electronics: exploitation.”

Indeed, Microsoft has been exploiting us through its innovative, life-improving technologies. I am being exploited as I type this post on a PC with freshly installed Vista operating system, which I chose to purchase because I wanted the product more than I wanted to keep my money. Would anybody buy Microsoft products if they felt exploited? Would Microsoft make any profits if consumers thought that their products were not good enough for them to part with their money? Is Microsoft a hindrance to any other company wanting a piece of the pie? Well, if you are not smart and innovative enough, sure, but is that Microsoft’s fault? Is Microsoft not rather inspiring businesses through its success seek to enter into competition by offering similar or better products for lower prices (think of open source products).

Likewise, is it Microsoft’s fault that people choose to give money to support its charity’s causes rather than another’s? Perhaps the Bill and Melinda Gates’ foundation gets the job done better than other charitable organizations. If so, it is being punished for exactly that, for being more productive, just as Microsoft’s antitrust woes show how it is punished for being more innovative than others. In effect this investigation reveals a thoroughly collectivist premise: that every charity has the right to stay in the business to do to good regardless of whether they are competitive and profitable enough.

No business has the right to stay in business indefinitely if it is not competitive and profitable enough. The only right a business has is the right to take the actions necessary to sustain itself by becoming and remaining competitive without violating someone else’s rights (whether consumer or rival), by producing and selling its products and services for the price it sets and to the people willing to purchase them for that price. It does not have a right to an equal or any share of the market it has not earned through production and trade.

The free market does not establish coercive monopolies. Governments do. Only the government can outlaw competition through legislative action (think of the U.S. Post Office). Only the government can give businesses an unfair advantage over their competitors by rewarding their lobbying efforts with legislative favors.

The fight against any monopoly held by businesses in a free market is a fight against the superior, more able, smarter, stronger and more innovative producers. It is a fight for the mediocre, the less able, the dumber, weaker and unimaginative producers crying foul because they cannot keep up. The destruction of businesses due to antitrust laws means the stifling and destruction of those creative minds that improve this world, whether in computer technology or charity.

A popular veggie snack food is being recalled by its manufacturer due to concerns over salmonella contaminations. The company reacted after the FDA had contacted them about 51 cases of salmonella poisoning. However,

none of the products has tested positive for salmonella, but the company acted as a precaution after the FDA and the Centers for Disease Control and Prevention reported that many of the infected people had eaten the product.

On the surface it surely seems reasonable for a company to be cautious. However, pressure from the FDA classifies as government force obstructing the right of the company to act in its own best interest and conduct its business in the manner it pleases.

The moral argument for the existence of the FDA is that the self-interest of business is opposed to the interest of the consumer. Therefore the consumer needs to be protected from the potentially damaging effects of business’ self-interest. After all, businesses have more power than the consumer and they will do harmful things in order to make a profit. Such is the nature of greed.

But how do businesses make profits? They make profits only through voluntary trade with consumers. The existence of government agencies to protect consumer interests is not only obstructive to the right of businesses to produce and sell in the way they deem fit, but also to the right of the consumer to make the choice whether to buy these products himself. Arguments for government controls of the free market also grossly underestimate the intelligence of the consumer to make his own choices. If the FDA did not exist, an independent market driven consumer group would have become aware of the salmonella cases, investigated them and presented its findings to the company. Why? Because consumers want and are able to ensure that they are not being harmed by the negligent or deceitful behavior of some businesses. Free market advocates do not claim that dishonest businesses do not exist. The simply say that a free market will punish them. If I do not like a product, I won’t buy it. If a business rips me off, I go some place else and I will let others know not deal with that business. If the veggie snack company thought to act on the findings of a consumer driven group would be in their self interest, they would have done so. After all, would publicity over neglecting to act on evidence for possible salmonella contamination not hurt them?

The interest of businesses and consumers are not opposed to each other. It is not against my self-interest to pay for a product a business is offering to me. It is not against my self-interest to buy a product I want from a business that is willing to sell it to me. The profit is the business’ rightful reward for producing the product I want. But it is against my self-interest and the self-interest of the business if the government prevents us from engaging in that trade.

Further, government controls over the free market do not just infringe on the right of business and consumer to act in their self-interest. Worse, such intervention stifles progress and innovation. Businesses will think twice before putting a product on the market that may receive intense scrutiny and regulation from the government, which is not only time-consuming but also often involves a high cost (think of the time and money spent on drug testing to pass FDA approval).

Maybe the veggie snack really was contaminated, but the company has been so intimidated by the FDA, that it acted before any conclusive evidence was found. Such action is costly, not only to the company but also to the consumer since he is deprived of his right to act on his own best judgment when deciding to purchase the product in question.

In case you were wondering how much the FDA costs us, it is not just taxpayers’ dollars and millions in approval costs the drug companies face which they have to pass on to the consumer. The FDA actually costs us human lives.