Excerpt from my book, Capitalism: The Deregulation of Pressure –
The primary weakness of democracy in practice is the absence of upward control. There appears therefore to be a pressing need for a democratic structure wherein the rank and file of citizenry can express themselves without fear or inhibition. In our view, such a system already exists. It is the option to purchase–and the freer the market, the freer the choice. People tell us directly and with negligible political nuance what they want from life when they give over their hard earned cash. The ballot is cast at the point of payment, and the government has practically no influence. Where the market is not free, the ballot is still cast, but it is a choice constrained by regulations from the top down. It is generally with astonishment that we discover just how comprehensive the market ballot actually is. It’s not just an indication of the purchaser’s material desires, it can and does reflect that person’s morality too.
Here is a real world example of what I mean. Free range eggs are more expensive than battery produced eggs, and sell in far lower quantities than the mass-produced equivalent. Immediately, we are shown a clear ballot on the morality of chicken batteries. Most customers simply don’t care, or don’t care enough to pay more to contribute to the happiness and wellbeing of chickens. A small minority does show compassion however, and is prepared to make financial sacrifices for its ethics. That is the power, integrity, and depth of the marketplace ballot. If enough of the market population adopts the morality of those few, it will effectively change the whole way that we farm with chickens. If no one buys battery eggs, no one will produce them. The problem would be solved by supply and demand, and voting with our wallets.
In my local grocery supermarket, free range eggs and battery produced eggs are offered side by side on the shelf. The will of the people is expressed by how much of each are sold. The ethical, moral decision is to purchase free range and boycott battery. That’s what you and I would do, but the broad mass of people doesn’t agree. They shop on price rather than ethics. The split between battery and free range is roughly 90 – 10 as a percentage.
The people have spoken. That’s the purity of supply and demand in reflecting the true will of the people. It has nothing, or nearly nothing, to do with what we can afford (the difference in price is cents rather than dollars) but what we really care about. The poorest of these customers could purchase a dollar less air time, or a dollar less vanity hair products, and spend that instead on upgrading to free range eggs. When more people vote for free range by exercising the ballot of purchase, two things will happen–one, the chicken batteries will go out of business (YAY!), and two, the price of free range eggs will drop. It is a beautiful model, because it’s natural. It’s not manufactured by some cunning individual to rip people off; it’s simply a consequence of production being in the hands of people whose wellbeing depends on satisfying their customers.
The vitally important conclusion to be drawn from the ballot-by-purchase model is that it can exist only in a market driven economy. It is entirely absent in economies where production is planned and controlled by the state, because there is no competition to keep production honest. Free competition is a moral watchdog that doesn’t charge for its services. In fact, it saves us money. Socialism removes free competition and encourages lower productivity, and thereby runs counter to human nature, with the net result that wherever it has been tried, it has by any objective measure failed to meet human aspirations. Ballot by purchase, if only the voters would fully realise it, is the way that common folk can properly express their will and their ethics, and it has the power to change the world.
Extrapolate that very real example to the four corners of the globe, and to any aspect of our economic lives. If no one bought rhino horns, we wouldn’t have rhino poaching; if there were no addicts, we would have no drug dealers; if farmers didn’t preferentially use GMO seed, Monsanto wouldn’t bother producing it; when people like you and me desist from asking for credit so that we can get things before we can afford them, banks will stop putting us into debt. The consumers are masters of their own destinies in all these matters; the suppliers are just their obedient servants.
Free markets evolved naturally as humans matured as a species. They do not have to be enforced from the top down as regulated markets do. The free market is as natural a part of Homo sapiens’ evolution as trade, barter, and the division of labour. The great problem we face now is how much we ought to interfere with what is intrinsically natural to people, and in any case, why we would want to do that. If it is just to impose our own personal morality upon broader society, it’s time we paused to think again.
But we are used to this sort of dilemma; it’s called soul searching.