Deserve’s Got Nothing to Do with It

Viewing capitalism through the progressive lens, we can find examples of cosmic injustice everywhere in the marketplace. All around us, the hardworking go unrewarded; the creative lack backing for their visions; the foolish can succeed despite themselves, whether out of nepotism, cronyism, or most commonly, plain dumb luck. It is a natural tendency for many, therefore, to grow frustrated with the whole endeavor and to set out seeking a better way – a way to force this chaos into a more enlightened order. However, this framework misunderstands the proper role of an economy, which is not to dispense justice at all, be it cosmic justice, social justice – even financial justice – or any other sort. As Clint Eastwood’s character explained in Unforgiven: deserve’s got nothing to do with it.

 

Markets are a mechanism for valuing scarce resources and distributing them according to dispersed but critical pieces of information. Besides being more efficient than top-down control over the economy, which lacks any effective means of objectively ranking material wants and needs, a market channels man’s self interest into productive ends instead of the destructive behaviors that inevitably result from political jockeying versus others.

One misconception progressives (and even many capitaists) share is that capitalism is, or should be, rational on the individual level. To the contrary, capitalism relies upon micro-irrational risk-taking to produce the wide array of trials and errors necessary for macro-level advancement.

A perfect example of micro-irrationality/macro-rationality is the Silicon Valley start-up scene, which for the vast majority of young self-starters will prove to be their financial coffin:

The most expensive lottery ticket in the world

It is the height of irrationality for any computer engineer to start a Silicon Valley company, accurately assessing his chances of success versus catastrophic ruin. Yet without this widespread overconfidence among entrepreneurs, we wouldn’t have the transformational breakthroughs of one-in-a-million companies like Facebook and Google. Markets are beautiful because they convert man’s self-delusion not into massive public boondoggles, but into a net-rational evolution by straining out stumbled-upon successes through the law of large numbers. The truly remarkable aspect of the process is it does so entirely according to the consent of the participants. Getting the fuller picture of capitalism through a wider lens than progressivism offers, it turns out to be a highly rational and compassionate arrangement.

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