Dr. David Cowan
How often do you hear someone complain about rising prices? Chicago economist Frank H. Knight (subject of my new book) argued the price of things is is not a pain, it is the ability to make a choice among alternatives. The fact we have a price mechanism reflects our ability to choose one thing while other people can choose something else. Something is popular the price reflects that, and thus unpopular things are priced as such.
This dynamic shows up in friendship as well. Whatever the state of the economy, whether you are doing well or not so well, you can measure your current financial situation against friendship. As I argued in Economic Parables: The Monetary Teachings of Jesus Christ, the economy reflects who we are as individuals and as a society.
When you hear talk of high prices, the notion that the economy manipulates us rapidly emerges. However, this misses the point, because in fact it is people who manipulate the economy at all levels, as price reflects behaviors of buyers and sellers. It also reflects government choices and interference. The popular activity of pointing to “fat cats” and “greed” also rapidly emerges, and again misses the point. In the economy we all act, and the economy gives us a measure of our actions as a social organization, reflecting both good and bad.
Before we go around blaming “fat cats,’” society, government and systemic failure for all our economic ills, and high prices, let us look to ourselves. One outcome of this behavior is that when people face high prices or run into financial difficulties they soon find out who their friends are. In part it is because people have to make choices, and in part because others make choices about them. It is about what Knight says, our ability to make choices among alternatives.
In difficult economic circumstances, which can arise individually during good times and not just during recession, we learn to distinguish between true friends and hangers-on. Ask anyone who has been famous or successful in the past, and they will tell you that at times of difficulty “friends” have rapidly deserted them. But you don’t need to be wildly famous or successful to find this out.
In good times, we have money to spend on attracting friends, amusing them and even pretending we are happy when we are not. In bad times, we can’t afford to do this and people will be friends for the reasons of personal connection, not economic bonds. To repeat, as Knight says, it is our ability to make choices among alternatives.
Now I’m sure you’ve heard the economic point that we should save up for a rainy day, and the same applies to friendship. We can see how we conduct ourselves in the good times sets the ground for the inevitable bad times. In recessionary times, whether it is a recession in society or a personal one, people have to dig deep, not just within themselves, but also within relationships. When the economy is good, and we feel we are master or mistress of our universe, we make decisions as if there were to be no downside, when there is always going to be a downside at some point.
The tragedy of modern life is that the anonymity of urban life and the increasing dependency on government for welfare and care demonstrates how profoundly we have lost relationship. The fabric of society is increasingly being destroyed by the break down of family as the base social unit. It is under stress because in good times and bad times an increasing number of people turn to the government for economic sustenance, instead of looking to themselves and to a network of friendships and family ties. The “safety net” in society should not start with government, it should be in friendship and family, but all too often this is not the case.
Knight believed family to be the economic base unit in society, but this has been destroyed by excessive individualism and selfishness. The left blames the right for excessive individualism and selfishness in the economy, and there is room for criticism, but leftist welfarism is much more to blame.
There are people who are genuinely in need of help, who have lost out due to any number of reasons arguably beyond their control, and they ask for the help of society as a friend. There are charities and government, and the kindness of strangers, to help them. But such cases are crowded out by the increasing numbers of people in trouble because of choices they have made and who want to abdicate responsibility for these choices, while friends and family choose to abdicate their responsibility for the troubled individual as friends and family.
This is why welfare problems increase, because the boundaries on responsibility are increasingly being pushed back and people excused, and this is what is damaging society. Welfare and government don’t just make it easy for the individual to give up, it makes it easy for friends and family to give up as well and pass their problems on to others in society.
In making economic choices, we see the impact of behaviors in our nation, and the result of our ability to make a choice among alternatives. We see who our friends and family are, and we see how people choose between alternatives. If we find the only friend we have is the government then that is judgment not just on us, but on those we once loved and trusted.