Commentary and Opinion

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Thursday, March 21, 2013

Swickard: Happy cows and citizens

© 2013 Michael Swickard, Ph.D Our country is basically a happy country. What is the source of our happiness? Capitalism is the core of our happiness. Consider this: New Mexico has the happiest cows in our country. I do not make that claim lightly. I have it on good authority that when you see New Mexico milk cows they are happier than the milk cows in New York.
            The test of happiness in cows in general concerns the amount of milk they give. Milk producers are experts on cow happiness because they get more milk per cow if that cow is happy. No fooling, this is true.
            Likewise, Americans are happier than citizens of other countries and like our cows there is an external measure of happiness. It is the general freedom of Americans in the market. Disregard all of the political speech about how our country is very much in poverty. We Americans do not know poverty like people in Africa. Our poorest Americans are richer than the middle class in many countries.
            But that is not what makes Americans so happy. Rather, each and every American is free to trade their own things of value for any other American’s things of value. We get to trade for what we want in a relatively free manner. We are a country where what you want, within reason, if within reach.
            In our capitalistic system, when two Americans trade things of value, both with equal knowledge, they both come away from the trade better off than before. Hence, they are both happy. That is why the capitalistic system generates happiness since both sides of a trade get what they want or they are free to not trade.
            A city councilor in my little slice of heaven was recently carping on the radio about the greedy business owners. His view is that all capitalism is theft by business owners. Not so, incidentally, in our world many business owners have gone out of business when citizens declined to trade with them.
            Anyway, this city councilor said that since business owners are greedy and take advantage of buyers this is justification for the government getting into the trades between Americans to make sure the business owner trades fairly. The role of the government in capitalism is to make sure capitalism does not work. How so? Government’s role, according to this politician was to take one side of the trade and make sure the trade is better for one American than the other. How very wrong.
            In the purest sense how capitalism works is like this: one person has a cow (hopefully a happy cow so that it gives lots of milk) and that person has more milk than is needed. This allows that person to trade for something of value. Milk, something of value is traded for money, something else of value. The person with the money has breakfast cereal and no milk. The person with milk has more milk than they can use but no money. They trade milk for money and both come from the transaction better off for having traded.
            The more government gets between business owners and their customers the less happy both sides will be. Take the minimum wage. The most limiting factor in wages is the productive value of the worker. Those workers who are very productive always get lots of money. Those with little or no productive value are a dilemma for business owners. Every business owner needs workers with productive skills. They pay for the worker’s productivity. But if the value of the worker they hire is less than the value the worker produces for the wage, then the business owner is not getting a fair trade.
            The government forces the business owner to make a bad trade in some workers theoretically for the good of the worker. The worker needs more money but does not provide more value. Where this breaks down is that the business owner often does not hire the unskilled worker in response to the government. So, the unskilled worker remains unemployed. In that world neither the potential worker nor the business owner is happy.
            Maybe we should concentrate on what it takes to have a happy country.

Dr. Michael Swickard is co-host of radio talk show News New Mexico 6 to 9 a.m. Monday - Friday on a number of New Mexico radio stations and through streaming. Email: michael@swickard.com