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Commerce and Civilization


Tags Global EconomyPhilosophy and MethodologyPraxeologyProduction Theory

06/02/2003Mises Institute

Haydar Hussain, the third-generation owner of a butcher shop in Baghdad, isn't much interested in politics. He doesn't care whose statue appears in the public square. He didn't like Saddam but doesn't like his replacement either. He has his personal religious views, but will gladly sell to Sunni, Shiite, Christian, or Jew. In fact, his interests are not complicated. He wants to protect his property, to be free to serve others through exchange, and to otherwise be left alone.

In the days before the war, his shop was full: beef, lamb, and chicken in every cut imaginable. He did his best to work around sanctions, despotism, inflation, and a thousand other barriers that conspired against commerce. Somehow he managed, and, like thousands of other heroic merchants in that country, kept the people fed by means of trade.

After the war, he only had a bit of hamburger to sell, but his doors were open, unlike the other 95 percent of businesses that had closed for lack of products and fear of looters (official and unofficial). How did he do it? He provided his own protection and worked extremely hard. All of Iraq suffered, but slightly less so because of his efforts.

It was often said in the days after the war that Iraq had descended into a state of "anarchy," but that's not the best word to describe war between two states. Any merchant in that country will testify that the problem he faces is not lack of government but government itself: first Saddam and then those who displaced Saddam. Both represented a form of official violence and disorder that makes doing business difficult.

Hardly anyone talks about the other side of the coin: what is the source of orderliness, not just the absence of violence but the presence of things that make for civilization: the availability of food and water, housing and jobs, resources for charity and rebuilding what was destroyed?

To hear U.S. officials talk, the key to restoring livable economic conditions is the military working with regulatory agencies, international governmental bodies like the World Bank, and billions in tax dollars. That’s not true, of course. If Iraq is to be rebuilt into a functioning society again, it will be through the efforts of Haydar Hussain and others like him. In the end, it will be commerce and the merchant class that will provide, and they will have to go it alone, without the help of superpowers.

What motivates them? The prospect of profit, yes, but there is more to it than that. What these people have is a drive to serve, combined with an amazing survival instinct. When others are destroying and looting, they are busy trying to create, protect, and provide, always ready to strike a deal of some sort.

The merchant class has been the most reviled in the history of political thought. Their very existence sticks in the craw of those who, like Marxists and modern-day militarists, believe that history should be about great conflicts, and winners and losers. Why? Because the merchant class views history in a more mundane way: as a series of small steps by which people are provided the goods and services they need to overcome the great economic problem of scarcity.

Now, it's true that idealists from the ancient world to our own time have envisioned a world of peace and plenty, but it wasn't until the high middle ages that intellectuals began to explore the economic realm as a suitable means. Economic science sought to come to terms with man's nature as it is, and not as it might be as remade through politics. Once the investigations began, it led to the great liberal/capitalist movement of the following centuries, in which the emphasis shifted from utopian speculation to logical thinking about institutions such as ownership, commerce, and investment.

The institutions examined by the new science of economics are based on the idea of exchange toward mutual benefit, exchange rooted in cooperation instead of compulsion, peace instead of conflict. The idea of mutually beneficial exchange carries with it the potential for vast increases in the standard of living, and for providing a means by which people can channel competing values into profitable undertakings. The result is the free-market economy.

It is a simple idea, one that is immediately clear to the mind not mired in ideological dreams of a society managed from the top down. The market itself has always been with us as the source of civilization, but it took economists to provide the explanation concerning why. The result was the flowering of economic science that continued through the centuries—the discipline that works out the full implications of the meaning of exchange in a world of scarcity.

The advent of economic science and the liberal social philosophy generally laid the foundation for political events that secured liberty (such as the American Revolution) and the astonishing improvements in human well being that we've seen in the last several centuries.

Is it surprising that economic science was so late in its development? Perhaps not, given all the forces in society so naturally allied against its insights. A free-market economy is incompatible with a state that intervenes to manage people's property or otherwise circumscribe their liberty. It rules out the imposition of central plans, social engineering, wealth redistribution schemes, plunder and looting, and imperial wars. In short, it rules out anything that would disturb peaceful trade among individuals.

Who wants to destroy peace and enterprise? Those who benefit from conflict and war, namely, the state, as well as intellectuals who see the state as the vehicle for the realization of their plans. In our own time, the insights of great liberals of old are considered outmoded by thinkers left and right, as the advocates of collectivism push for more government power and the promoters of unending war herald the glories of destruction as essential and uplifting.

But collectivism and war create nothing; they only smash wealth and leave misery and despotism in their wake. They solve no human problem; they only create more of them. War, in particular, is the very opposite of free enterprise. "Peace and not war is the father of all things," wrote Mises.

The Mises Institute follows this mission as well, providing the essential supporting framework for scholars and writers from all over the world who understand that the blessings of commerce require the curbing of every form of power. Their mission is to understand, improve, and convey a message that is crucial for the survival of civilization itself: a world of peace and plenty is possible but only with a free enterprise society that keeps the destructive force of power at bay. Free markets have indeed remade the world, and no society, especially not one torn by despotism and war, can be livable without them.

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