Conflict or Cooperation
Different Americans have different and often intense preferences for all kinds of goods and services. Some of us have strong preferences for beer and distaste for wine while others have the opposite preference — strong preferences for wine and distaste for beer. Some of us hate three-piece suits and love blue jeans while others love three-piece suits and hate blue jeans. When’s the last time you heard of beer drinkers in conflict with wine drinkers, or three-piece suit lovers in conflict with lovers of blue jeans? It seldom if ever happens because beer and blue jean lovers get what they want. Wine and three-piece suit lovers get what they want and they all can live in peace with one another.
It would be easy to create conflict among these people. Instead of free choice and private decision-making, clothing and beverage decisions could be made in the political arena. In other words, have a democratic majority-rule process to decide what drinks and clothing that would be allowed. Then we would see wine lovers organized against beer lovers, and blue jean lovers organized against three-piece suit lovers. Conflict would emerge solely because the decision was made in the political arena. Why? The prime feature of political decision-making is that it’s a zero-sum game. One person’s gain is of necessity another person’s loss. That is if wine lovers won, beer lovers lose. As such, political decision-making and allocation of resources is conflict enhancing while market decision-making and allocation is conflict reducing. The greater the number of decisions made in the political arena, the greater the potential for conflict.
The inherent problem with the political distribution of goods and services, as Williams points out, is that the model is always a zero sum game: if one person wins someone else must lose. Free markets do not work this way. In free markets, both parties gain from a voluntary exchange at mutually agreed upon terms. If a customer X feels that buying a pair of jeans for $40 adds at least 40 dollars worth of value (or more) to his life, then the exchange happens. If he doesn’t, no exchange happens and the customer moves on to find a better use for his $40. The point is that value imparted to an item by a customer is always subjective and in the eye of the customer alone. As long as he is freely making that decision, he is always adding more value to his own life in that exchange as long as he deems it so. And the jean manufacturer is also adding value to his or her life as he or she is presumably pricing the good for a profit (otherwise the manufacturer would not offer the good as they would eventually go out of business). Kinder, gentler, happier.
Win-Win
