The Corner

Ever Thus Department

A couple weeks ago, I complained how the Left thinks it’s an incredible insight into, and damning indictment of, the nature of capitalism that it undergoes periods of crisis. My response, in short, was So what? Everything under the sun goes through periods of crisis. That is the nature of things.

Here’s another example of the same sort of thinking. Steve Levitt observes that “In a market economy, there are inevitably winners and losers.”

Shocking!

In every sphere of life there are inevitably winners and losers. In nature the bunnies are losers to the owls. The salmon are losers to the bears. In sports, there are winners and losers. In science, winners and losers. In families, winners and losers. And in every economic system that has, or ever will be, conceived of, there will be winners and losers. Does Levitt mean to imply there are no losers in socialism? Communism? How about in social democracy or corporatism or, I don’t know, feudalism, or mercantalism or anarchism? It seems obvious to me that these systems created plenty of losers, particularly in the form of dead people.

This sort of comment reminds me of the Simpsons where Millhouse ominously observes of the kids in Shelbyville that they like their candy for “the sweet, sweet taste.”

That’s why everyone likes candy!

Likewise, everything creates winners and losers.

Or to be more accurate, nothing — nothing — prevents the inevitable creation of winners and losers. All any economic system can do is redistribute who gets a W and who gets an L. One of the many great and wonderful things about capitalism is that it creates endless opportunities for do-overs and second, third, and fourth chances. Capitalism may not take as much of the sting out of losing as European social democracy (You failed! Here’s two years of paid vacation!), but it offers something better: another bite at the apple. One of the things European business gurus admire most about America is that we consider failure to be “experience.” In Europe, you often only get one crack at the apple as an entrepreneur and if you fail, that failure stigmatizes you.

Levitt goes on to say that people who worry about the poor don’t like markets very much. This is hubris masqerading as sociology and ingratitude posing as compassion. But we can discuss that another time.

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