Classical liberals have known since the time of Adam Smith that the market’s biggest failure, by far, is its propensity to keep many of its beneficial consequences hidden or camouflaged. This market failure ensures that ordinary people simultaneously underestimate the market’s achievements as they overestimate the power of government intervention to produce good outcomes.
For example, people easily see the businesses and jobs saved by protectionism, but the businesses and jobs — as well as the economic growth — destroyed by protectionism are invisible. People easily see the higher wages paid to workers employed at legislated minimum wages, but the workers rendered unemployed, or employed in worse jobs, are unseen. To ‘see’ the destroyed businesses and employment opportunities requires more than mere eyesight and awareness of stated intentions. It requires a bit – just a bit – of analytical thinking.
The theme of the seen versus the unseen, of course, is sounded repeatedly throughout classical-liberal scholarship and public commentary.
But even when the market’s achievements are within plain sight — literally visible to the naked eye — they are often overlooked. Some innovations, such as the microwave oven in the 1970s and the smartphone in the first decade of this century, are so novel when they arrive on the scene that they’re oohhhed and aahhhed at first. But because the market soon makes these goodies affordable to almost everyone, they quickly become commonplace and expected.
And if, as is almost always the case, continued innovation and market competition drive the prices of these marvelous and amazing goods ever-further downward, they soon come to be regarded as cheap and frivolous trinkets — evidence, it is said, of the market elevating the shallow, the material, and the atomized individual over the profound, the spiritual, and the soul-sustaining community. Only sociopathic homo economicus and his silly defenders resist efforts to protect workers and communities from the vicious and soulless global competition that greedily spews out the baubles and gee-gaws available at Walmart and Target.
Workers and communities, apparently, would be far better off if the market were sclerotic and kept the likes of microwave ovens, smartphones, fresh blueberries in winter, and 1,200 thread count Egyptian cotton sheets so scarce as to be affordable only by hedge-fund managers and Hollywood starlets. Hoi polloi, noticing these luxuries being consumed by the superrich, might suffer a bit of envy, but this displeasure would be, we are told, swamped by the benefits that ordinary people would enjoy from the stability of their jobs and communities. One cannot put a price on the satisfaction experienced by welder Jones knowing that, like his father and grandfather before him, his sons and grandsons after him will also work as welders.