Visual Economy

The True Market Value Of Voluntary Exchange

You’re in a group of 10 friends, who take a vote on whether or not you should beat up George to get him to pony up some dough for Oliver’s kids’ lessons. The vote is 6-4 to beat George up. Are you okay with it now?

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User Comments


Thanks for publishing George! A couple of small corrections: My name is Tomasz Kaye, and Edgar was made after George.

Hello Tomasz,

Thanks for the corrections and the chance to publish your work!

Earl

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WealthCycles Commentary


As a prelude to the animated blockbuster we reviewed recently, Edgar the Exploiter, video-maker Tomasz Kaye brings us George Ought to Help, which offers a libertarian spin on mandatory taxation.

“Imagine you have a friend called George,” the blue cloud begins. Imagine you and old friend George are approached by a third mutual friend, Oliver. Oliver hits you and George up for money to pay his children’s school tuition. You reach for your wallet and shell out. George, on the other hand, is unsympathetic. You are shocked at George’s lack of generosity. You try to win him over, but he continues to resist. What should you do? Do you feel comfortable, the blue cloud wants to know, with threatening to beat George up for being a tight-fisted old meanie?

Now imagine another situation, the cloud intones gently. You’re in a group of 10 friends, who for some unknown reason are taking a vote on whether or not you should beat up George to get him to pony up some dough for Oliver’s kids’ lessons. The vote is 6-4 to beat George up. Are you okay with it now?

Now a third scenario. There are thousands upon thousands of people now deciding George’s fate. A majority of them vote to have, not you, but some anonymous “agents,” do whatever it takes to get George to pay for Oliver’s kids’ school. At first all the agents do is send George a bill. If George still doesn’t pay, he gets another bill, this time for more money. He continues to receive more and more bills for increasing amounts. Finally giving up on George, the agents, armed and armored, show up at George’s lovely home. The animation of agents, guns slung over shoulders and riding Segways, dragging poor George alongside down his driveway, is comic but chilling. The dog runs after and sits at the end of the drive, animated tail wagging forlornly, as an argyle-sweatered George is carted away.

A shield appears, bearing the Latin words “Pro Mundi Beneficio”—“for the benefit of the world.” The words are replaced by images of handcuffs, a club, a revolver, an automatic rifle.

“If we approve of state programs that redistribute wealth,” the blue cloud continues, “we must also approve of threats of violence made against peaceful individuals, because this is how the funds are collected…. If we feel negatively towards the idea of threatening George personally, can we really be comfortable with the threats made against him by agents of the state?

“Some people believe that voluntary interaction and spontaneous order are realistic and preferable alternatives to state coercion as a way of organizing society,” the cloud concludes.

Although Kaye doesn’t delve into the economic principle underlying his animated allegory, it is the principle of voluntary exchange upon which a free market economy is based: individuals willingly exchange goods and services among themselves for other things of value. In the process of thousands or millions of such voluntary exchanges, the market becomes very efficient at identifying fair and correct prices and at balancing supply and demand. Taxes and entitlement programs, on the other hand, are involuntary exchanges, in which wealth is redistributed via government intervention. The result is to distort the workings of the free market, leading to price volatility, imbalances in supply and demand, speculation, bubbles and crashes. It is a distortion we see in action every day, everywhere in the world, to one degree or another.  It just took that blue cloud to boil it down to what it really is: using force and metal cages to force those who resist coerced exchange.