ONLY THIEVES AND GOVERNMENT
The essence of free markets is good-good exchanges, or what
I like to think of as seduction. Exchanges of this sort are featured by the
proposition: “I’ll do something good for you if you do something good for me.”
Game theorists recognize this as a positive-sum game—a transaction where both
parties, in their own estimation, are better off as a result. When I go to my
grocer and offer him the following proposition: If you do something good for
me—give me that gallon of milk—I’ll do something good for you—give you three
dollars. As a result, I am better off because I valued the milk more than I
valued the three dollars and he is better off because he valued the three
dollars more than he valued the gallon of milk.
Of course there’s another type of exchange not typically,
voluntarily entered into, namely good-bad exchanges, or what we might call
rape. An example of that kind of exchange would be where I approached my grocer
with a pistol, telling him that if he didn’t do something good for me (give me
that gallon of milk) I’d do something bad to him: blow his brains out. Clearly,
I would be better off, but he would be worse off. Game theorists call that a
zero-sum game. That’s the case where in order for one person to be better off,
of necessity the other must be worse off. Zero-sum games are transactions
mostly initiated by thieves and governments, both are involved in what is
euphemistically called income redistribution. The only difference is one does
it under the color of the law and the other doesn’t.
