Free Iran

by Don Boudreaux on April 11, 2016

in Growth, Innovation

I join my colleague Alex Tabarrok in expressing my pleasure and honor to have been asked to contribute a short essay to the New Year’s issue of Tejarat-e Farda, which, as Alex says, is

an Iranian business weekly. The issue features an interview with the president of Iran about the economy as well as the messages from economists around the word.

A partial list of other contributors has on it Philip Booth, Eamonn Butler, Antony Davies, Steve Horwitz, Pierre Lemieux, and James Tooley.

Here’s my contribution (in the original English).  (Link added)

Deal!

Donald J. Boudreaux*

Ideas matter above all else.

As history teaches – especially as interpreted through the keen eyes of Deirdre McCloskey – prosperity for the masses is caused by innovation in open markets. And markets are open only if most people accept the Bourgeois Deal, which is this: Innovators, entrepreneurs, and merchants can get as rich as they like, but only by also making their customers and workers richer as judged exclusively by their customers and workers. Producers serve consumers, not vice-versa. The freedom of contract includes the freedom not to contract. Voluntary trade that takes place across political borders is no less beneficial than is trade that takes place domestically. The fact that persuasion involves no use of force makes it civilized rather than contemptible. Ordinary people cannot be secure in their rights without ‘the rich’ also being secure in their rights; ‘the rich’ cannot be secure in their rights without ordinary people also being secure in their rights.

These ideas are revolutionary. And evidence of their power is abundant.

Consider Las Vegas, an American city in the middle of a desert made barren by nature. But of course Las Vegas is anything but barren. Its denizens are among the wealthiest people on the globe. Underground rivers flow beneath its scorching surface. Food and drink are as abundant there as in Seattle, Paris, and Tokyo. Air-conditioning keeps everyone cool indoors. Despite having almost no “natural resources,” Las Vegas is an astonishingly prosperous place.

This prosperity is created by ideas, at two different levels.

At the first level are the ideas, mentioned above, of the Bourgeois Deal: industry, trade, and innovation are good and honorable, even when they disrupt familiar ways of doing things. At the second level are the specific ideas that the Bourgeois Deal brings to life. In the case of Las Vegas, these specific ideas include ones that enable water to be brought to the desert – ones that bring electrical power to homes and businesses – ones that facilitate the production of entertaining shows – ones that make possible the construction and maintenance of tall buildings in a desert.

Modern prosperity – whether in Las Vegas or Dubai, or in Philadelphia or Berlin – is nothing other than the manifestation of countless creative ideas unleashed by the Bourgeois Deal. No place on earth is destined to remain poor if its people accept the Bourgeois Deal, and no place on earth is destined to prosper if its people refuse this deal.

The Bourgeois Deal is unquestionably good. It’s win-win. And yet it is rare in history. The Bourgeois Deal is rare both because many people simply don’t grasp its promise, and because a handful of other people greedily seek to gain by violating its rules. Yet without this Deal, there can be no mass flourishing.

A people who truly wish to prosper have no choice but to accept the Bourgeois Deal.

I applaud – heartily! – bourgeois.ir for the role it plays in encouraging Iranians to accept the Bourgeois Deal.

* Donald J. Boudreaux is Professor of Economics at George Mason University and the Getchell Chair at George Mason’s Mercatus Center. He blogs with Russell Roberts at Café Hayek.

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