Saturday, August 2, 2008

Serving Others vs Exploiting Them

What is the difference between a market economy and a political economy? It is the difference between serving others and exploiting them. Here is how Ludwig von Mises defines the market economy in his great work, Human Action:

"The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody's actions aim at the satisfaction of other people's needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens. Everybody, on the other hand, is served by his fellow citizens. Everybody is both a means and an end in himself; an ultimate end for himself and a means to other people in their endeavors to attain their own ends. This system is steered by the market. The market directs the individual's activities into those channels in which he best serves the wants of his fellow men."

And here is how Frédéric Bastiat defines political economy:

"The state is that great fiction through which everyone tries to live at the expense of everyone else."

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