“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” ~ Murray Rothbard
The Amazing Atheist thinks he’s got this economics stuff figured out. The relevant part begins a minute in:
Mr. Atheist actually begins his account of market economics with uncommon accuracy. He describes hamburger/harmonica exchange well enough, at least to start:
Free market capitalism is characterized by the voluntary exchange of goods and services between individuals. For instance, if I have a cheeseburger, and you have a harmonica, and I want a harmonica, and you want a cheeseburger, we can come to an arrangement whereby I exchange my hamburger for your harmonica. And we’re both happy, you see, because I have the harmonica that I need and you have the cheeseburger that you need.
He then properly identifies the cardinal sins of market exchange: coercion and fraud. So far so good. He explains the marketeer’s opposition to taxation so well that I begin to suspect that he is really one of us, and that he was trolling ant-capitalists by titling his video the way he did. By the time he described self-ownership and the uplifting effects of free trade, I thought I had found a new free-market friend.
Then, at 4:20, a cold splash of reality:
…and I’m going to tell you why free market capitalism just won’t fucking work. It won’t work. Here’s why:
Let’s say that you have some goods that I want, and I have some money that you want. If your goods are worth as much as my money, and my money is worth as much as your goods, then neither of us can increase our wealth by this transaction. So the question is, how can wealth disparity emerge in a free market, capitalist system? I don’t think it can, and I’ll tell you why. The only way that either of us stands to gain anything in a free-market, capitalist system is if I pay you more for your product than what it’s worth, or if i pay you less for your product than what it’s worth. In other words, you have to scam me, or I have to scam you. Therefore, the free market is inherently incapable of generating wealth.
But maybe not! Because what about labor? What about trading an intangible for a tangible? …
Freeze-frame right there. …
What the heck happened? Did Mr. Atheist not already stipulate that voluntary exchange between two individuals makes each individual happier? Did he not demonstrate with his cheeseburger/harmonica example that participants of an exchange stand to gain more of what each of them want?
I believe that Mr. Atheist has allowed money to confound him. When money enters the calculus, such contrivances as spot prices, book values, and other apparently objective measures of what a thing is worth enter with it. Now there is a way, ostensibly, to determine whether a particular offer of money is fair. Don’t be fooled, I say. The money example is no different from the cheeseburger/harmonica example. So long as the exchange is voluntary, both parties benefit.
Mr. Atheist continues his discussion of labor, which pulses in and out of coherence before climaxing at about 7:10 with the pronouncement that company profits are illegitimate because workers are entitled to their “fair share” of the company’s gross income, yadda, yadda, yadda, regardless of whatever the workers agreed to accept. For me, the most interesting part of Mr. Atheist’s monologue followed at about 8:28:
Now, most free marketers at this point are going to shove down my throat the idea that the value of something is determined by how much people are willing to pay for it. They’ll talk about supply and demand. They’ll say, ‘You know what? If someone is willing to pay a hundred dollars for something that you manufactured for fifteen cents then that’s what it’s worth. That is how value is determined. Saying that it’s okay to manufacture something for a dollar and then sell it for ten dollars is like saying that it’s okay for me to sell you a dime for a dollar because you’re stupid enough to pay for it. I mean, for fuck’s sake! Taking advantage of the stupidity of someone else for your own monetary gain is the very fucking definition of the word fraud!
What you have just heard and read is the product of an atrophied imagination. Mr. Atheist apparently can’t imagine a reason, other than stupidity, that a person would ever pay more for something than its cost of production.
What about convenience? Maybe it costs the Hohner company, on average, three dollars to make a fifteen dollar harmonica. So what? Assuming that I even could manufacture my own harmonica in my basement workshop upon purchasing three dollars worth of raw materials, am I stupid if I would rather simply pay the fifteen dollars, get it over with, and spend the rest of my day accomplishing the other things that I had planned?
What about collectors items? Someone on eBay recently spent $6.24 cents on this dime. Why? Is stupidity the only explanation for this behavior? Did the seller defraud the stupid buyer? What if it’s just a cool dime that the buyer normally wouldn’t see in the ordinary course of her life? What if the buyer has to up the ante a little if she is ever to acquire such a cool dime. If I shoved this dime down The Amazing Atheists throat, would he then understand that the value of a thing is determined by how much someone is willing to pay for it?
No, shoppers are not necessarily stupid for paying more for a thing than the cost of its production. Neither are workers stupid who accept less money for their labor than a pro rata share of their employer’s gross income. Labor, my dear readers, is also worth no more than what an employer is willing to pay and no less than what the laborer is willing to accept.
But we’re not finished yet! Check out this little nugget at 10:18:
Okay, now to be fair to the free marketers out there, I did come up with one way that you could make money in a free market system, and that’s by selling the completely intangible, that is to say, providing services that don’t actually give someone something tangible at the end of the day. That would include stuff like making YouTube videos. If someone wants to pay a bazillion dollars to listen to me talk, then hey. I’m a bazillion dollars richer. If twenty people want to pay five dollars to listen to me talk, then I just made a hundred dollars, and that’s a good thing.
No fraud there, I see. No stupidity, either. In my personal opinion, paying five dollars to listen to The Amazing Atheist talk is probably not the most prudent use of that money, but I don’t get to decide that. Value, believe it or not, is determined by how much others are willing to pay.
The moral of this post is that market trade is not the zero sum game that The Amazing Atheist believes it to be. In voluntary trade, both parties benefit. This is just as true in the case of barter as it is in the case of sale. This is just as true in the case of tangibles as it is in the case of intangibles. That shoppers want to spend more for items than those items cost to produce does not make shoppers into stupidheads and sellers into crooks.
And finally, Mr. Atheist, your haircut looks great, in my opinion.
Looks like I’m a little late to this party. The Amazing Atheist has already unsuccessfully responded to these criticisms in a follow-up video entitled Free Market Captialism FAILS Again. Although his grasp of economics seems not to have greatly improved, he does, in this later video, describe capitalism as “the system we have for now, and the best system currently. … So yeah. Capitalism is a good thing.” So he’s not a totally out to lunch. He recognizes a good thing when he sees it. He might even be teachable.