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RE: The Wealth of a Nation: Why Capitalism Works
I disagree on the central point that capitalism works because it is voluntary. It is not, for at least two reasons.
- People are creatures of habit and many agents within capitalism exploit this. Addiction & other bad habits prevent 'choices' to be voluntary.
- There is no way to not participate in the market, which makes it involuntary by definition. Even if one chooses to live off the grid, one has to buy some land. You are free to do what you want, but you have to play the game.
There is also the problem of public amenities and services. If we just had a free market, who would build a road between two poor neighbourhoods allowing free movement and such? Who would take care of the homeless when they needed help? Infrastructure and a social safety net are a huge basis upon which capitalism can work, but without which it would be be a suboptimal solution.
People are social creatures. They want to do things together. Government is one expression of that.
But who will build the roads? So companies have the intelligence to put cell phones in our pocket, but they wouldn't be able to devise a system to build a road from a house to a store. I think you limit the creativity of Mr. Market. And yes, you are right, people are social creatures. However, this doesn't make big government necessary. Friends, family, clubs, sports, associations, jobs, events, parades, communities all can support people's need to socialize.
That's not exactly what I'm saying. I'm suggesting that a lot of the infrastructure that businesses depend upon is provided by the state. I'm thinking about property rights, currency (at least until Bitcoin, but still to a very large extent), roads, etc. I don't think the market couldn't do it, but for a big part it isn't incentivized enough to do it (example: a road between two poor neighbourhoods, clean water/electricity for everyone, even if they live far from others).