He Gains Most Who Serves Best; P. L. Poirot

He Gains Most Who Serves Best PAUL L. POIROT "THE BEST OFFENSE is a good de fense" may be effective strategy in war and various competitive sports to decide winners and los ers. But this offense-defense ter minology is misleading with refer ence to free market competition. Voluntary exchange is neither a game nor a war; it is a form of coopera tion between buyer and seller to their mutual advantage as each one determines·advantage. So, the rule of the market would run more like this: "He gains most who serves best." A businessman's profits are a measure of his effi ciency in the use of scarce and valuable resources to satisfy the most urgent wants of consumers. Having competed successfully in the market, a property owner seeks to preserve his gains. But the mar ket continues to insist: "He gains most who serves best." In other words, the way to preserve your gains is to keep on serving con sumers efficiently; that's the only protection of property the market can offer.

It should be noted here that the market recognizes and accommo dates numerous forms of property. Perhaps the most crucial and sig nificant form is the individual's property right in his own person - his freedom to use as he pleases for any peaceful purpose his own ideas and energies and other facul ties and possessions. As a self owning, self-responsible human being, he is free to choose work or leisure, thrift or prodigality, spe cialization and trade or self subsistence, formal education or on-his-own, splendor or plain liv ing - anything peaceful, at his own 313 314 THE FREEMAN May expense. The market is there to serve him to the extent that he serves others: "He gains most who serves best." In addition to one's right to his own life, the market recognizes and respects other forms of pri vate property. There is the land, the space one occupies to the ex clusion of others who have not earned access or been freely in vited to share that space. There are the man-made buildings and tools of further production. There is food, clothing, shelter, transpor tation, medical and dental care, news and other information, books, education, recreation, entertain ment, services ranging from strictly unskilled manual labor to the most highly skilled profes sional help. All these are forms of private property, things owned and controlled by individuals as a con sequence of peaceful production and trade - voluntary market transactions, according to the mar ket formula: "He gains most who serves best."

A Wealthy Nation Those who speak of the United States as a wealthy nation really mean that the citizens of this na tion are relatively well off. And we should add the appropriate quali fications: (1) some of the citizens of the United States own more property than do others, and (2) the typical United States citizen owns more property than the typi cal citizen of other countries. Without those qualifying condi tions, the reference to a wealthy United States might be miscon strued as meaning that our federal government has unlimited resourc es at its command - an all-tao-com mon belief. Perhaps the people of the so called underdeveloped Third World might be excused for the notion that the wealth of the United States is primarily in the form of government property. Citizens of lands long committed to commu nism have less reason to believe that the path to prosperity and happiness is through government ownership and control of resources.

But what could be our excuse, we taxpayers of the United States, for possibly thinking of Uncle Sam as the source of endless goodies? Either our government is inde pendently wealthy and has no need for taxpayers, or else it is de pendent on taxpayers for its re sources. Is there· really any ques tion about that? Unfortunately, many citizens of the Uni ted States seem to be in doubt as to which is the case. They vote themselves instant protection and welfare, payable from Federal funds, as if there were no tomor row - no accompanying tax bur dens and disruption of business 1975 HE GAINS MOST WHO SERVES BEST 315 and trade. The facts to the con trary are announced daily in the various taxes added to purchases, weekly or bi-weekly .in the list of deductions from pay checks, an nuany as income tax reports are filed. We have every reason to know there is a tax to pay for every act of government, whether to defend life and property and maintain peace and assure justice, or to transfer property from one person to another for whatever reason.

Why Some Have More Because the market rewards in dividuals according to services rendered, the result is that some persons earn and own more prop erty than do others. Strictly by serving the masses of mankind, some individuals have been made extremely wealthy. They have been given stewardship over vast amounts of property because of their proven capacity to use such scarce resources efficiently in pro viding the goods and services most sought and most valued by others. But if, for some reason, any pres ent owner of scarce resources loses his touch, fails to serve efficiently, the open competition of the on going market process soon will bid the property into the hands ·of some new owner who serves better. Meanwhile, the market process sustains vast numbers of us who pretend to know better than we do - who feign a wisdom not manifest in our performances. And one ver sion of such "wisdom" holds that "we" know better than "they" how to use their property, that there is a more humane and just method of allocating scarce and valuable resources than to leave it to the market decisions of competing owners of private property. In other words, property should .be redistributed "to each according to need," not left to the market rule: "He gains most who serves best."

And just how is the market to be closed? Forcibly! Instead of up holding the dignity and property rights of the peaceful owner, the government shall intervene some times to drag a supplier unwilling ly to market, sometimes to bar or limit his entry; sometimes to pro tect present owners of property in uses long since d~clared wasteful by any reasonable measure of the market place, sometimes to forci bly transfer property from the most efficient users into the hands of those who most miserably have failed to serve others in any way whatsoever. The Best System So we come back once more to the only rule the market follows, "He gains most who serves best." Despite the inequalities of wealth resulting from observance of that rule, no one reasonably contends 316 THE FREEMAN May that there is a better formula for human action in society. There is nothing morally wrong about vol untarily serving others. A person does not rationally contend that he has been impoverished· because others have acted to serve his most urgent wants. When two parties voluntarily exchange their privately owned resources or properties, each gains - else he would not trade; and no uninvolved third party is harmed by reason of the trade.

While the rule of the market allows the greatest gain to the one who serves best, it affords no protection for any gain except through continuing use in the ef ficient service of others. In other words, the market insists that scarce resources be owned by those who are most proficient in serving willing customers, which is the least wasteful social distribution of wealth that is possible. To arbiServants of the State trarily or coercively change the market-derived pattern of owner ship is to introduce waste; and there is no historical or theoreti cally sound evidence that waste of scarce resources is socially bene ficial. Wha t any waste of any scarce resource amounts to in the final analysis is a waste of human lives - the inevitable consequence when compulsory collectivism in terferes with or displaces the mar ket process of open competition. It is comforting to be a citizen of a wealthy nation. But a nation is wealthy only by reason of the fact that resources are privately owned and controlled according to the rule, "He gains most who serves best." And the only way in which government can usefully serve such a society is to keep the market open, restrain and punish those who violate· the rule, but otherwise let free men compete. ~ IDEAS ON LIBERTY WHERE DISTINCTION and rank are achieved almost exclusively by becoming a salaried servant of the state, where to do one's as signed duty is regarded as more laudable than to choose one's own field of usefulness, where all pursuits that do not give a rec ognized place in the official hierarchy or a claim to a fixed income are regarded as inferior and even somewhat disreputable, it is too much to expect that many will long prefer freedom to security.

F. A. HAYEK A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Sovereignty and Bargaining_ GOVERNMENT', says the old Chinese proverb, is more terrible than tigers. That is because government rests on force. But when private individuals are not restrained by government from using force in accordance with their own whims, we have something that is worse than tigers. In the well-known ob servation of Thomas Hobbes, life without government becomes nas ty, brutish and short; even the non-tigerish become man eaters. In choosing between tigers and something worse than tigers man kind is challenged to figure out a way of limiting the rule of the tiger State to defending borders, protecting citizens in their individ ual rights and keeping the envir onment free from communicable diseases. Our Founding Fathers thought they had solved the prob lem. With John Locke and other post-Hobbesean philosophers, they hoped that check-and-balance rep resentative institutions would make governmental force both orderly and palatable. We would have sov ereignty where we needed it, to provide for the Adam Smith triad of justice, safety and cleanliness.