In my latest column for AIER, I explain why it’s very often appropriate to ask intellectuals who assert that this or that ‘problem’ should be ‘solved’ by government interference to put their own money where their mouths are. Two slices:
A common response to my “put-your-money-where-your-mouth-is” challenge is that the persons to whom I direct it are almost always intellectuals rather than experienced business people. Being an intellectual myself – and aware of my accompanying incompetence in practical affairs – I sympathize with fellow intellectuals who realize that they personally have no talent to launch and operate businesses. I have no such talent. So I certainly don’t fault Aaron Klein for continuing to be a salaried employee at a think tank. I don’t fault Emily Stewart for earning her living by sticking to writing.
Obviously, if an intellectual does indeed identify an actual market imperfection, the opportunity that likely lurks in that imperfection can be seized by someone other than the intellectual who identifies it. And fortunately our world has no shortage of entrepreneurs hungry for profit. The deeper point of my challenge to intellectuals such as Klein and Stewart to put their money where their mouths are is to draw attention to the fact that, if the intellectuals’ claims are correct, we can rely upon market forces to correct the problem. There’s no need for government intervention.
Being intellectuals, Klein and Stewart undoubtedly are too incompetent actually to launch a retail store. But by publicly sharing their claim about this alleged market imperfection, they thus make this ‘information’ available to be acted on by countless competent entrepreneurs. The fact that Klein and Stewart’s public declarations incite no entrepreneurs to seize the profits that are available if these declarations are correct is compelling evidence that cash-paying retail consumers are, in reality, not being unjustly exploited for the benefit of credit-card-using retail consumers.
Perhaps not all asserted market imperfections can be profitably exploited – and, in the process, ‘corrected’ – by entrepreneurs acting in free markets. But a surprisingly large number of such alleged market imperfections would indeed be easily ‘corrected’ by private entrepreneurial actions if these allegations were accurate. Any and all allegations to have discovered that businesses in free markets are underpaying some groups of workers, or that businesses in free markets are overcharging some groups of consumers, are claims to have discovered profit opportunities that can be relatively easily exploited by entrepreneurs. (That the intellectuals who issue such claims don’t realize that their claims are really of profit opportunities speaks only to these intellectuals’ economic illiteracy.)