ȂȄȁ Partʺʺ: Politics and PhilosophyExpecting people to act against their own economic interest tends
to undercut the signaling function of prices and the incentive of loss-
avoidance and profit. How are people to know, then, when it is legiti-
mate and when illegitimate to pursue economic gain?ȄWhy should they
suppose that the President of the United States knows best? Why should
they respect an attempt to obtain the results of possibly momentous legis-
lation by bypassing the constitutional process?ȅTo exhort people to think
of compliance as in their own interest when it plainly is not, or to appeal
to self-sacrifice as if it were the essence of morality, is to undercut the
rational basis of morality and even rationality itself.ȆIt obscures the com-
patibility between social interest and rational self-interest that can gen-
erally hold under appropriate social institutions. Ļis educative effect is
especially perverse when the ostensible social interest is not genuine and
when the economic controls would be damaging even if enforced by law.
Appeals to voluntary sacrifice promote perverse selection by penalizing
the people who do comply to the benefit of others. Mine is similar to Gar-
rett Hardin’s point (ȀȈȅȇ/ȀȈȅȈ) about the voluntary approach to popula-
tion control in an overpopulated country:ȇthe people who comply thereby
contribute to the population relatively few persons exposed in their forma-
tive years to their own moral standards (and also having whatever genes
may be relevant). Ļe noncompliers will have relatively many children,
who will grow up exposed to the lower moral standards of their parents (as
well as having any relevant “bad” genes). Over time, these others will out-
breed the decent people. In economic affairs, similarly, the compliant busi-
nessman who holds his selling price below the market-clearing level will
ȄI am referring, of course, to the pursuit of gain as such, not to the methods used.
Lying, cheating, and stealing do not become right by being used in the pursuit of otherwise
honorable ends.
ȅFurthermore, the voluntary approach tends to obscure responsibility for the unsat-
isfactory conditions occasioning the appeals to restraint and sacrifice. Appeals to ordi-
nary citizens to “Stop Inflation” by restraint in consumption or in paying increased prices
(appeals such as were frequent late inȀȈȆȀ) tend to draw attention away from the real
source of trouble.
ȆAs Robert G. Olson says (ȀȈȅȄ, pp.Ȁȁ,Ȁȁȅ), “the probable effect of urging a man to
act contrary to what he rationally regards as his own best interests is either to embitter
him or to inspire contempt for reason.” “If ... an economic system is such that honesty
puts an individual at a serious competitive disadvantage, the system is at least as much at
fault as the dishonest individual, for honesty ought to pay not only with prestige but with
profits.”
ȇI cite Hardin only to clarify my point, not to echo his specific recommendation on
an issue rather far afield from my present topic.