Mises Wire

Home | Wire | Gresham’s Law of Manners, or how socialism gives us a rude society

Gresham’s Law of Manners, or how socialism gives us a rude society

Economics students all over the world learn Gresham’s Law in a severely distorted way. They are told that “bad money drives good money out of the market” as if that was a law of markets. It’s not. It’s a law (inevitable effect) of State intervention in the money market. Bad money drives good money out of the market only when the former is subject to a price control that sets its price higher than it would otherwise be with respect to the latter’s. In other words, valuable goods are hidden/hoarded whenever there is forced equality or at least the least valuable are forced upwards in perceived value.

What does this have to do with manners? Well, if we regard all State property (public areas specially) as the tragedy of the commons it is, we can analyze people’s behavior as more or less valuable. In a free society, people of great manners (and overall superior personal image) will tend to surround themselves with similar people. But in partial socialism, access to public venues is increasingly non-discriminating (of behaviors and attire and even hygiene) thus making a melting pot out of different human groups. The problem is, that some people are put off by others’ behaviors and personal presentation. Rudeness and even perceived aggressiveness scares away families and vulnerable individuals (women with a high sense of femininity, to name one). This we may call Gresham’s Law of Manners: the progressive abandonment of public spaces by the most elegant and sober and its crowding out by the vulgar and aggressive. The State creates this situation and then it’s intelligentzia deplores the abandonment of public/community spaces by some groups who now have to seclude themselves in gated neighborhoods and other discreet spaces in other to enjoy a life of kindness, beauty and truth.

This law of human behavior only goes on to further demonstrate how civic life and personal values are eroded by the State, in the vein of prof. Hans-Hermann Hoppe’s great analytic framework.