Mike Munger makes the case.
Poverty is what happens when groups of people fail to cooperate, or are prevented from finding ways to cooperate. Cooperation is in our genes; the ability to be social is a big part of what makes us human. It takes actions by powerful actors such as states, or cruel accidents such as deep historical or ethnic animosities, to prevent people from cooperating. Everywhere you look, if people are prosperous it’s because they are cooperating, working together. If people are desperately poor, it’s because they are denied some of the means of cooperating, the institutions for reducing the transaction costs of decentralized VPC.
I think it helps if people understand this. However, progressives will argue that we cannot have VPC without government and that, moreover, government can improve VPC.
Pointer from Don Boudreaux.
It’s a well-written piece. I don’t see much that the average progressive would, I think, disagree with. In fact, I imagine most progressives would take MM’s arguments and run with them: “why yes, we ARE all interdependent aren’t we? Therefore, your objections to Social Security, Medicare, Medicaid, ACA, SNAP, TANF, Section 8 Housing and whatever else are illegitimate, because we clearly need to make certain that those we are dependent on are well cared for.” Or maybe “yes, cooperation IS a kind of sharing, so when we use progressive taxation as a way to transfer resources from high income to low income individuals, we’re just furthering cooperation by forcing people to share.”
Etc, etc, etc.
But it’s still a nice illustration of some concepts that way too many people leave school not having a good grasp of. The fiddle player/orchestra line is particularly good.
Except, they’d be leaving out the bits about ‘voluntary’ and ‘private’.
The important thing about progressives and VPC, to my mind, isn’t simply that they want to improve it. They believe they should manage it.
And what has been the probable effect of channeling, and in many cases requiring, cooperation be conducted through governmental (or government approved) intermediaries?
This leaves out the cruel effects of geography.
Afghanistan doesn’t have much government, cooperation, or prosperity.
It takes actions by powerful actors such as states, or cruel accidents such as deep historical or ethnic animosities, to prevent people from cooperating.
I think the people in Afghanistan have long term cultural issues that may seriously reduce cooperation.
There is plenty of voluntary private cooperation in Afghanistan … against other small groups of voluntary private cooperators. That’s the private-sector source of ‘involuntary’, and that’s the problem.
The reason they need a good, big government, is to deter the VPCs using violence against the other VPCs. What they end up with, however, is a government which thinks it’s just the biggest VPC in town (sometimes called ‘a conspiracy’ or ‘organized crime’), and which just preys on the little VPCs, as is their habit.
So, the trick to government is to be one giant VPC which sticks mostly to involuntarily forcing small VPCs to cut out all their involuntary actions against the other small VPCs.