Fair

Words have consequences and one word that always catches my attention is “fair”. This is a word that has been downgraded because it has taken on political meanings. It is a word that has no place in a free market society as it is better suited for a communist type government. Under the communist system the central government is responsible for planning. Imagine the formidable task this represents. A group of experts sits in a room and must decide in advance how many shoes the country needs this coming year. How may shirts, how many bushels of wheat, how many cars and so on. One way to simplify this impossible task is to bring in the concept of fairness. If we just have one type of shoe but different sizes and one kind of shirt but different sizes, one kind of breakfast cereal and on down the line the whole process is made easier. If this sounds a little weird just recall China shortly after the communist took control. Recall the pictures of the Chinese people all wearing those dirty gray colored shirts and pants and wearing the same kind of shoes. Since the enormity of this project is so great that no group of people could master it, these types of economies fail. The idea of fair does not work in our system and I offer an example. The average family income in America is $50,000. What could be more fair than every family earning $50,000. The free market here in the US could not operate under such restraints. A free market economy that follows the simple rules of supply and demand will operate almost on auto-pilot. It is an amazing thing to watch and see how millions of people making billions of decisions move the entire economy forward. The number one enemy of the free market is corruption and when steps are taken to minimize corruption the market does what it is supposed to do and that is provide opportunity for everyone. Corruption occurs with individuals, with businesses and with governments so what must be done to control it. Three things are needed. First and foremost is an informed consumer, second a critical and inquisitive press and finally elected officials who understand basic economics. In case there is some confusion as to what economics says about business, it is the following. The purpose of business is to provide goods and services and if done properly it will result in profit. Note, that unlike many people think, profit is not the purpose of business but the result of good business.