A recent column in the Winfield Daily Courier illustrates just how difficult it is for some to grasp the ideas and principles of libertarianism. The column, titled Libertarians and Libertarians, makes a factual error and is wrong when describing several important aspects of libertarian thinking.
For example, he mentions Milton Friedman’s proposal that medical doctors should not be licensed by government. Instead, markets could function as regulators. Showing his disdain for this idea, he writes: “As for a cut-rate appendectomy, let the buyer beware!” The facts are that our current medical system, partly but not totally because of physician licensing, is dysfunctional. There are some clinics and hospitals that choose to operate outside the usual medical orthodoxy, and by doing so, they can offer outstanding bargains to their customers.
As an example, the Surgery Center of Oklahoma, while not offering appendectomies (at least not on its website) does offer the type of cut-rate prices that the author of this column warns us of. Its prices are very inexpensive compared to what most people pay. And in Wichita, Galichia Medical Tourism publishes its prices for surgeries such as knee replacement for $14,000, when it says the typical cost in the U.S. is $50,000.
The real problem with this column, however, lies in this passage:
Do Michael Jordan or Bill Gates owe any debt to the society which rewarded them so extravagantly? Despite the intuitive appeal of the self-ownership idea, there are complexities. Jordan worked hard to develop his skills, but he was lucky to have natural abilities and a physique that most of us do not possess. He was also fortunate to live in a society that prizes his particular ability and has leisure time and money to pay to watch him perform. Some compensation to such a society would seem appropriate.
Should we as a society extract compensation from Michael Jordan for making him rich? First of all, I imagine that Jordan has paid a lot in taxes, so various governments have already extracted something.
Beyond that, Jordan doesn’t owe us a thing. All the transactions that people undertook with Jordan — attending a basketball game, watching one on television, buying a product that Jordan endorsed — these were all voluntary, market transactions. Neither party was coerced or forced. By definition, both parties — Jordan and each individual person — entered into the transaction voluntarily, believing that they would be better off if the transaction took place.
In 1998, Fortune magazine estimated the “Jordan effect” at $10 billion. Jordan has created wealth for himself and an entire industry. He has given pleasure to his millions of fans. This is something to celebrate, not to be concerned about.
For more about the economics of Michael Jordan, see columns by Thomas Sowell and Walter Williams.
Sowell writes about the problems with trying to equalize the outcomes of human endeavor:
The problem with trying to equalize is that you can usually only equalize downward. If the government were to spend some of its stimulus money trying to raise my basketball ability level to that of Michael Jordan, it would be an even bigger waste of money than most of the other things that Washington does. So the only way to try to equalize that has any chance at all would be to try to bring Michael Jordan down to my level, whether by drastic rule changes or by making him play with one hand tied behind his back, or whatever.
The problem with this approach, as with many other attempts at equalization, is that it undermines the very activity involved.
Williams writes about the sources of income: “The reader’s inference is that there’s something unfair about income differences of such magnitude. It also reflects ignorance about the sources of income in a free society; that’s music to the ears of political demagogues with an insatiable taste for command and control.”
Another column by Williams writes about the discrepancy between teachers’ salaries and Jordan’s: “Schoolteachers are more important to society than professional basketball players. … The reason why professional basketball players earn more money is both a result of reality and decisions made by millions of decision-makers.”
If we want to let government override the decisions made by people making free decisions in markets, we could equalize Michael Jordan’s pay with that of the local fourth-grade teacher. The cost of doing that, however, is very high.
(The factual error in this Winfield Daily Courier column is the author’s statement that Ron Paul was the Libertarian Party’s 2008 Presidential Candidate. Ron Paul ran for the Republican Party nomination. Bob Barr was the Libertarian Party candidate.)
GREAT article Bob. Many completely ignore the truly voluntary aspects of everyday market exchanges. Only ‘ex post’ and then still later….do they want to equalize the outcomes of such voluntary exchanges. Silly!