Mutual Benefit or Power?

“The desire for an increase of wealth can be satisfied through exchange, which is the only method possible in a capitalist economy, or by violence and petition as in a militarist society, where the strong acquire by force, the weak by petitioning.” – Ludwig von Mises

These are the two choices. Each can gain through mutual exchange of value for value, or the powerful can gain through force. People seem to prefer the latter over the former. Why? Because we evolved to understand the world as a zero sum game. That is, in order for one to gain, that means another loses. Those who hate the rich think they only way they could have gained that much is by taking from others, making them poor.

But that’s not at all what happens. At least, not in a market economy.

In a market economy, mutual exchange means that both parties gain from the exchange. That is, it’s a positive sum game. The economy grows with every mutual exchange. The poor are better off by exchanging something they value less for something they value more. And the difference between the rich and the poor is simply that the rich engage in more mutual exchanges than do the middle class, who engage in more mutual exchanges than the poor. Of course, another difference–and this is a major difference–is that the rich and the middle class also save and invest their money. The more you can delay spending, the more money you are bound to have.

Saving is dangerous when the society is dominated by zero sum games–when the powerful prey on the weak, and the weak are left to beg. If you save in such a society, the powerful can come along and simply take what you’ve saved. So what do you do with your money? You spend it on experiences (parties with your friends and families), clothes, hair and nails, and anything you can show off but won’t really miss if someone steals it (cheap and flashy, and nothing sentimental). If you see these kinds of behaviors, that means the people are in a society where they are prey to the powerful. That society may be local or it may be an entire country–what matters is the people are trapped there.

We are increasingly a begging society. We beg for some of our taxes back. We beg the insurance companies to cover us. We beg the government for welfare, social security, Medicare, Medicaid, and so on. Businesses beg the government for more regulations to kill off their competition, for licensing to prevent new competition, and for subsidies. The only time we’re not begging is when we’re shopping at the store. Then we are on an equal footing  because each party wants to engage in a mutually beneficial exchange where both parties increase the value of what they have when they engage in the exchange.

In nature, there are systems that degrade and fall apart, and there are systems that grow, that become more than the sum of their parts. We can have a power-based entropic system, or we can have a complexity-based emergent system of growth and increasing wealth. Nature provides us with two options.

You have to ask yourself: what kind of society do you really want?

Do you want a society where the powerful prey on the weak, where the gang with the most guns get to dictate what you have and where you live and what business you can do, where you have to pay protection to ensure that something bad doesn’t happen to all your nice stuff? Whether it’s an inner city gang, the mafia, or a democratically elected government, there are altogether too many institutions out there engaged in this kind of predator-prey, master-slave relationship.

Or do you want a society where people engage in mutual exchange, where both parties are better off for the exchange? Where people engage in voluntary interactions, seeing who they want to see, doing whatever is peaceful, creating things of value to others? Whether it’s a business, working artists and writers, or scientists and inventors, there are altogether too few institutions out there engaged in this kind of mutually beneficial, voluntary relationships. There are many, but not enough–they are being replaced more and more with the predatory powerful.

The more predatory power-based people and institutions we have, the worse off we are. We become poorer, less trusting, more entrenched, more envious, more angry, more stressed and anxious. Do you feel these things in our societies today? The more power-based people and institutions we have, the more powerless we all feel. What you are feeling right now, that something is not quite right in society any more, is precisely this feeling of powerlessness.

But you don’t have to feel that way. It’s time to take the power back.

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