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Commercial Good Will

December 9, 2003

"One of the characteristics of the market economy," wrote Mises "is the specific way in which it deals with the problems offered by the biological, moral, and intellectual inequality of men." (Ultimate Foundation of Economic Science)

Among the more ridiculous burdens that being a classical liberal carries with it is the constant charge of lacking 'compassion.'  In the market, however, the wealth becomes so great that the externalities do benefit the common man, everyday. Entrepreneurs create many things without even hoping to get paid. A great case in point is   yahoo. I have a couple of syndicalist friends who insist that the 'exploitation' doctrine is true. Of course, Bohm-Bawerk destroyed that notion over a hundred years ago but it hasnt gotten around to everyone yet. I ask these people how much it costs them to use yahoo's services and they are silent. Yahoo has instant messenger, geocities, webcam, and games all for free. Yahoo only makes money on a fraction of the services that it provides; the rest are there are draw users. Yet it is the common man who is incapable of comprehending the benefits of the market at the same time he is enjoying him and of comprehending the alternatives.

This is exactly the thing that Mises talked about when he was speaking of commercial good will (HA 379-383.) There are many examples of commercial good will in our daily lives. I often go to the local bar and sip water because I like the writing atmosphere.  The bar owner lets me do this because I am a regular customer, not because we are best friends. There are many stores that will give customers boxes for moving even though they could profit from recycling them. It becomes important for us to realize as that the market is not just a method of producing and allocating wealth, it is a method for socializing man. As ironic as it might seem, profit seeking businesses oftentimes display more 'good will' than government or even altruistic charities  A short quip should illustrate this point. I know of a friend who gave a small amount to amnesty international, and he told me he was bothered by phone calls and mailings for quite awhile. He also pointed out that the amount that it must have cost amnesty international to send out these mailings and make these phone calls probably came close to the amount he donated.

The bottom line is that the market is not only the best social system for producing wealth, it is also the most moral.

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