It is quite common and even fashionable to discuss market phenomena in terms of “power”—that is, in terms appropriate only to the battlefield. We have seen the fallacy of the “back-to-the-jungle” criticism of the market and we have seen how the fallacious “economic-power” concept has been applied to the exchange economy. Political-power terminology, in fact, often dominates discussions of the market: peaceful businessmen are “economic royalists,” “economic feudalists,” or “robber barons.” Business is called a “system of power,” and firms are “private governments,” and, if they are very large, even “empires.” Less luridly, men have “bargaining power,” and business firms engage in “strategies” and “rivalry” as in military battles. Recently, theories of “games” and strategy have been erroneously applied to market activity, even to the absurd extent of comparing market exchange with a “zero-sum game”—an interrelation in which A’s loss is precisely equal to B’s gain.
This, of course, is the action of coercive power, of conquest and robbery. There, one man’s gain is another man’s loss; one man’s victory, another’s defeat. Only conflict can describe these social relations. But the opposite is true on the free market, where everyone is a “victor” and everyone gains from social relations. The language and concepts of political power are singularly inappropriate in the free-market society.
The fundamental confusion here is the failure to distinguish between two very different concepts: power over nature and power over man.
It is easy to see that an individual’s power is his ability to control his environment in order to satisfy his wants. A man with an ax has the power to chop down a tree; a man with a factory has the power, along with other complementary factors, to produce capital goods. A man with a gun has thepower to force an unarmed man to do his bidding, provided that the unarmed man chooses not to resist or not to accept death at gunpoint. It should be clear that there is a basic distinction between the two types of power. Power over nature is the sort of power on which civilization must be built; the record of man’s history is the record of the advance or attempted advance of that power. Power over men, on the other hand, does not raise the general standard of living or promote the satisfactions of all, as does power over nature. By its very essence, only some men in society can wield power over men. Where power over man exists, some must be the powerful, and others must be objects of power. But every man can and does achieve power over nature.
In fact, if we look at the basic condition of man as he enters the world, it is obvious that the only way to preserve his life and advance himself is to conquer nature—to transform the face of the earth to satisfy his wants. From the point of view of all the members of the human race, it is obvious that only such a conquest is productive and life-sustaining. Power of one man over another cannot contribute to the advance of mankind; it can only bring about a society in which plunder has replaced production, hegemony has supplanted contract, violence and conflict have taken the place of the peaceful order and harmony of the market. Power of one man over another is parasitic rather than creative, for it means that the nature conquerors are subjected to the dictation of those who conquer their fellowman instead. Any society of force—whether ruled by criminal bands or by an organized State—fundamentally means the rule of the jungle, or economic chaos. Furthermore, it would be a jungle, a struggle in the sense of the Social Darwinists, in which the survivors would not really be the “fittest,” for the “fitness” of the victors would consist solely in their ability to prey on producers. They would not be the ones best fitted for advancing the human species: these are the producers, the conquerors of nature.
The libertarian doctrine, then, advocates the maximization of man’s power over nature and the eradication of the power of man over man. Statists, in elevating the latter power, often fail to realize that in their system man’s power over nature would wither and become negligible.
- Murray Rothbard, Power & Market
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