I teach economic theory at George Mason University at the introductory, intermediate and Ph.D. levels. I admonish students that in the process of fooling others it is not necessary to fool oneself. There are some commonly held views and pronouncements that are just plain nonsense. Let's look at a couple.
You might hear a person say, "A car and telephone are absolute necessities." That's readily revealed as nonsense simply by recognizing that mankind has done without cars and telephones for a longer period than he has done with them. I tell students that wanting is a more accurate term but don't purge their vocabularies of the term absolute necessity because it's a great way to trick their parents and others into buying them things.
There's a more important fault with the belief in absolute necessities. If one says for example that insulin is an absolute necessity for a diabetic, that's the same as suggesting that a seller of insulin can charge any price he wants, like $3 million a shot, and the diabetic will still buy the same amount. The fact of the matter is that if insulin sold for $3 million a shot, most insulin users would find a substitute for insulin. One of those substitutes is to do without insulin. You say, "Come on, Williams, that's ridiculous!" No, it isn't. Diabetics have done without insulin for most of man's history. The results were not all that pleasant but that doesn't change the fact that they did without insulin. In some places in the world diabetics are still doing without insulin.
Another term of great emotional worth is exploitation. Nearly every other word coming out of the mouths of last week's World Bank and International Monetary Fund (IMF) demonstrators is exploitation. They claim that wages paid workers, especially children workers, in underdeveloped countries are exploitative. Their demand is for U.S. companies not import and sell goods made by "slave" labor. Let's look at it.
First, let's ask, "Why would anyone work for say a dollar a day?" I guarantee you that if he had a superior option, like $50 a day, he wouldn't take the dollar a day job. We can safely conclude that dollar a day job is his best known and available option. If we view that dollar a day job as unconscionable, do we help that unfortunate soul by destroying what is his best option without first supplying him with a superior one? I'd say no.
World Bank and IMF demonstrators, as well as their rioting colleagues in Seattle, directly or indirectly say yes. They've called for boycotts of products imported from low wage countries. They've also called for legislation requiring these workers be paid a "living wage." They know poor workers are nowhere nearly as productive as American workers, and if wages anywhere close to western wages are mandated, those workers will lose employment.
When there's voluntary exchange, exploitation is a vacuous concept. When people use the term, most of the time they are simply disagreeing about prices. That being the case, "exploitation" abounds. I disagree with the price (wage) I earn at George Mason University; I think $500,000 a year is a fairer, non-exploitative wage. I disagree with the prices of 60 foot yachts and Lear jets; instead of millions of dollars, I think a couple of three thousand dollars would be a fairer, non-exploitative price.
By no means do I suggest that people purge their vocabulary of emotion laden terms like needs and exploitation. I'm just saying that fooling oneself is not a prerequisite to fooling others.
Walter E. Williams
April 17, 2000
Back to Articles Page