05 June 2012

Market Welfare

In reference to meteorites:

Approximately 5,000–17,000 meteorites plummet to earth every year—some the size of a washing machine, some as small as a golf ball. But when a particularly rare and scientifically valuable specimen like Tissint lands outside Antarctica, scientists and institutions such as the Natural History Museum must jockey with private collectors for the prize.
“We are competing within a commercial market, although we have extremely limited finances,” said Dr. Smith. “There’s a danger in the price hiking of the market. Institutions without much money to purchase things may be priced out.”
In the months after Tissint’s recovery, the Natural History Museum was approached by four different collectors, all hawking fragments of the rock. Pitt and Dave Gheesling, a meteorite collector based in Atlanta, Georgia, offered the largest piece of Tissint to the Natural History Museum for what Dr. Smith calls a “good price.”
“We could have made a lot more money,” says Pitt. “There are a lot of private collectors in Asia and the Middle East that would have paid far more than the Natural History Museum.”
Asked why he and Gheesling chose to sell it to the Natural History Museum, Pitt answered: “There exists a social obligation to make the extraordinary accessible. I would not have been able to sleep at night knowing that this object was in someone’s private vault.”
Nevertheless, the sum well exceeded the museum’s annual acquisition budget (neither Dr. Smith nor Pitt would disclose the exact sum). Half of the money was put up by an anonymous philanthropist, with dual American and British citizenship and a keen interest in the museum’s meteorite collection. [Emphasis added.]

I’ve noted multiple times before, within the pristine virtual walls of this highly esteemed blog, that the critics of the free market often rely on projecting their attitudes onto others when explaining why a free market will fail to take care of, say, poor people or science.  Quite simply there are some people that have absolutely no concept of philanthropy.

The theory is that the market always allocates resources of particularly scarce variety to the highest bidder, who then enjoys said object rather selfishly.  Of course, the above story indicates that this is not the case, as there apparently exist public-minded men who voluntarily take an economic loss for the public good.

Sadly, there are some people for whom such a concept is completely foreign.  They simply cannot understand how anyone would willingly sacrifice their money, time, or any other scarce resource for another human being.  Naturally, their political policies consist of having the government force other people to act in the public good because they, the proponents of acting in the public good, could themselves not think of any other way to act in the best interest of others.

More to the point, though, this story is simply a modern piece of evidence that the free market will not necessarily devolve into a dog-eat-dog world where everyone is self-absorbed and no one cares about anyone else.  Quite simply, there will always be people who are willing to concern themselves about other people and act in their best interest.  Because of this, one need not fear the free market or the absence of a welfare state.

No comments:

Post a Comment