Deep Libertarian Thoughts on Free Market Exchange

Instead of seeing exchange as one event of give and take, see it as two distinct events: A gives B something. B gives A something. Two people are separately giving to each other. The reason for it is all in your head. Forget the reason. Just look at what’s happening. Two people are freely giving to each other, connecting, and benefiting.

We look at the event too much as a give and take, and that is what trips us up into thinking one is taking advantage of the other, or there is a more powerful and less powerful party to the transaction. But if we just observe what’s happening, we can get rid of all that. One person gives. The other person gives. The result is peace.

The only difference between charitable giving and a market exchange is that in an exchange, there are two givers, and they each have a reason for giving. In a charitable donation, there is only one giver, and only he has a reason for giving. The other party is passive.

The reason for a market exchange is a shared interest between the two. It’s what connects them. This puts market exchanges above simple charitable giving on a moral sphere, because the market connects humanity, while giving does not necessarily do so. It can, but giving does not have to connect giver and receiver. An exchange necessarily does. The market necessarily does. It requires reciprocation. Charitable giving does not.

Then why is charitable giving a mitzva? The only reason I can think of is a גזירת הכתוב. Which means there is no rational reason, which makes sense considering there is a Rabbinic limit to charitable giving at 20%. Any more and giving is considered a sin.

Rav Sa’adaya Gaon, at the beginning of אמונות ודעות, the Book of Beliefs and Opinions, pretty much the first complete work dedicated to Jewish philosophy ever written circa 800 CE – Sa’adya observes that if everyone stole from everyone else, there would be no productivity and all of humanity would starve.

That extends to charitable giving. The more people that give without reciprocity, the less production you have. The market requires production from both sides of the exchange in every exchange. Otherwise the exchange is not made. The more charity you have in the world, the less wealth, because charity does not require both parties to produce. It is unilateral. At a certain saturation point then, charitable giving harms humanity. Rabbinically, that point is 20%.

Visually too, indirect exchange through a monetary medium necessarily connects humanity, not just via the two making the exchange itself, but due to the nature of the monetary medium it forces the receiver of money to exchange with yet another person in the future.

If you see the specific good in the exchange as the point of a cone, and then the money as the funnel, the funnel of the cone sits over the seller of the good, who is the receiver of money. The point of the cone sits over the buyer. The buyer gives money to the seller. The cone opens up to a third person, because the money received must then be exchanged with another person. Otherwise the money is worthless. The buyer is in effect pointing the seller in the direction of someone else – anyone else really, urging him to further exchange and add wealth to humanity using the money he has just given the seller.

A quote from Chef, starring Jon Favreau, demonstrates this. The chef is talking to his son, who tried to lazily give a burnt sandwich to a customer:

“I may not be the best husband in the world and I’m sorry if I wasn’t the best father. But I’m good at this, and I want to share this with you. I want to teach you what I learned. I get to touch people’s lives with what I do. And it keeps me going and I love it. And I think if you give it a shot you might love it too. Now, should we have served that sandwich?”