Cooperation Is What Markets Are For, Not Governments

“If you’ve been successful, you didn’t get there on your own,” President Obama told a Virginia crowd last Friday. “Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that.  Somebody else made that happen. The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. ”

At this point in his presidency, the statist subtext to President Obama’s remarks is clear. But his values–rather than his conclusions–are right on. Although he overstated the case, his essential point is what free market advocates have argued for years—that prosperity depends not just on individual initiative, but cooperation and exchange. Conceding these values to a president who has led the charge against these very ideals pigeonholes conservatives and libertarians into a clichéd version of individualism in which cooperation plays a secondary, rather than primary, role in markets.

Cooperation is not part of the market—it is the market. The market is millions, even billions, of individuals associating, trading, and contracting. In the classic essay “I, Pencil,” Leonard Read argues that “no single person on the face of this earth knows how to make [a pencil].” It is a collaborative effort of millions of people—loggers, miners, truckers, even coffee producers. “There isn’t a single person in all these millions,” Read continues, “including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how.”

No individual possesses enough know-how to perform a nation’s mail delivery any more than any individual possesses enough know-how to make a pencil. Now, in the absence of faith in free people—in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity—the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental “master-minding.” -Leonard Read, “I, Pencil”

For the president, the “somebody” that made it all happen was the government, but for Read, it was the marketplace. Both downplay the importance of any single individual, but for opposite reasons. The president does it so that government can take more from the individual, while Read does it to demonstrate why free action is so important. Markets allow billions of people to voluntarily work together to achieve their separate plans, whereas government allows a few individuals to coerce the rest to their vision.

The essence of the leftist criticism of markets is that cooperation is not enough, that voluntary contracts, free exchange, and open competition simply do not result in prosperity, that they must be augmented and guided by governmental force. Economist F.A. Hayek summed the situation in Lenin’s Russian phrase “who, whom?”—which translates to “who plans whom, who directs and dominates whom, who assigns to other people their station in life, and who is to have his due allotted by others?”

President Obama certainly believes he plans for the rest of us, but when the free market movement relentlessly attacks a quote in which the president praises what should be their values, they lose the moral high ground. That no one becomes successful on their own, that we must work together to flourish, that this “unbelievable American system” is what has permitted success should be the conservative and libertarian talking points. The president may have coopted these values for his own statist ends, but by not affirming—centrally, not tangentially—that they are actually our values, free market advocates do themselves a disservice.

Yet some conservatives have chosen to edit out the part where he affirms that “individual initiative” plays a part in success. Others have preferred to misinterpret his speech, such as The Telegraph’s Tim Stanley, who claimed the president’s view is that “the flourishing of the community is measured in dollars taxed and dollars spent.” As much as the president clearly loves to spend, nowhere in a fair reading of his remarks can such an implication be drawn. He simply affirmed that taxation and government are essential to the American system—his conclusion that current taxation is not enough might be factually wrong, but he does not say, as Stanley claims, that “the American dream is a fantasy.”

Such attacks reflect poorly on libertarians and conservatives who oppose the president’s agenda. Turning poorly framed language into a straw man degrades the debate. Worse, by allowing the president to seem like he is the champion of cooperation, free market advocates miss an opportunity to defend true voluntary cooperation. Free market economics is not based on the view that success is found by individuals plowing ahead on their own, but by people working together in society, based as the president said, on both cooperation and individual initiative.