Posted by
Andrews on Monday, November 21, 2011 10:45:32 PM
As with so many of my posts, this one starts with an apocryphal story. There are many variants,s o please don't bother telling me I got some detail wrong, there are probably as many versions as there are story tellers.
According to the version I heard first, engineers designing aircraft in the Second World War had a rule that they would go with the third best design, because the second best would too heavy (or too expensive) and the first would never be built. Of course this is nothing more than a longer winded version of the old aphorism that the perfect is the enemy of the good. We even have more modern variations, such as the common statement among those writing on computer security that the only secure computer is one disconnected from the network and powered off
1.
The reason I mention all this is that it serves as a perfect explanation for the strength of the capitalist system, as well as a rebuttal of a particularly bizarre argument I have dismissed once before ("
The Threat of Perfection", "
Utopianism and Disaster", "
A New Look At Intervention", "
Government Quackery", "
The Basics"). It is an argument that goes back as far as my essay "
Planning For Imperfection", but which needs to be repeated from time to time, as no one seems to quite understand it. Or, perhaps they understand, but not well enough to avoid the anti-freedom sophistries which play upon the dangerous concept of perfection and perfectibility.
The argument can be summed up in a paraphrase of another favorite aphorism: A laissez-faire economy is the worst possible system, except for all the rest. It isn't exactly true, of course, as I find much admirable in the free market, and find it quite impressive how it managed to harness base, selfish motives and turn them toward the general benefit of mankind. However, dishonest though this paraphrase may be, it does make one point very clear, and that is that laissez-faire is not without faults, it is not perfect, but neither is any other system, and, compared to the others, laissez-faire capitalism is miles ahead of the rest.
This may seem a simple point, but it is surprising how often it is overlooked. Time and again, I hear the free market disparaged for falling short of perfection. For not having "perfect information", for "waste" (cf "
Two Examples of "Inefficiency" in Capitalism", "
Bad Economics Part 2"), for not responding instantly to changes, to merely approximating ideal conditions, for allowing possible inequities to persist for a time, and so on. Yet, after voicing these concerns, the critics almost inevitably promote an alternative that is even more riddled with problems, yet no one ever stops to ask what the shortcomings of that new system might be. Seeing the supposed "failures" of capitalism, they accept an alternative which is inferior, simply because it is not capitalism.
Which is why I am writing this short essay. I want to remind everyone that capitalism is, in essence, that "third best plan", it is a system which is not perfect, but which tends to produce results superior to any alternative. It may not be instantly responsive, information may be distributed unevenly, egalitarians may disdain its imbalances of wealth, and so on, but there is no system which produces better results. No other system responds as quickly and accurately to individual desires. No other system satisfies as many consumer desires. no other system provides as much opportunity and mobility. No other system ties success to the objective outcomes of one's efforts. In short, no other system comes close to producing anything like capitalism's results. So, if it is imperfect, and it is, it is still closer to perfection than any alternative out there.
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1. Sadly, experience has shown many security workers forget that security is always a tradeoff between preventing unauthorized access and allowing users to perform their tasks (as well as user convenience).