Here’s a letter to Newsweek:
Editor:
Alexander Salter argues that we must “realign free enterprise with the common good” (“Hilaire Belloc Points the Way to Common-Good Capitalism,” May 1st). To make his case, he approvingly describes Hilaire Belloc’s belief that the low prices of consumer goods made possible by capitalism are the result of what Mr. Salter calls “political externalities.” Although the precise nature of these externalities isn’t made clear, they seem to consist of larger, more-efficient firms displacing smaller enterprises and thereby changing the economic make-up and tenor of communities in ways that even the customers of the large firms find unfortunate.
Yet what evidence is there that most or even many Americans would prefer to pay higher prices for consumer goods in exchange for their communities being populated with smaller or different sorts of merchants? None. And not only is there no evidence, there’s also nothing in economic theory to support the conclusion that these community-level consequences of free-market capitalism are ‘negative externalities’ that must be ‘corrected’ by a ‘realignment’ of free enterprise with the common good. Literally, all we have here is Mr. Salter’s assertion that consumers’ preferences are as he and Belloc suppose them to be.
What is being peddled as “common-good capitalism” turns out, on inspection, to be not capitalism to promote the actual common good but, instead, interference with capitalism to promote particular persons’ ideas of the good.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
