Wednesday, October 28, 2009

A Bad Day

An old friend called. He told me he was fired by his company. I was and am still in shock.

One is never prepared for such things in life. Think of it this way. As an free market economist, you talk about how a person's separation from his job only means that other jobs might be waiting for his application..bla bla bla....It may take some time, but he would find his match anyway if he or she searches hard enough. You say all this in a cool and almost cold-blooded manner.

But now imagine this. What if that person is your best pal? your spouse? your best graduate school room mate? your brother? Can you tell him straight in the face: no problem, what you are encountering is only a transitory phenomenon, and the labor market soon or later would come up with a job to match your skills.

No, I cannot. Hence, I did not say a word to my friend when I first heard the bad news.

My role, then, I realize, is not to be an economist. I am his friend. I am only a listener.

Then it hits home to me that, may be, just may be, every economist who does not believe in free market might have similar experiences of what I have just said above. It is thus not surprising to me at all that some economists hold such skeptic views on the market. They start blaming the free market for their loved ones' plight. Their personal experiences might have clouded their view.

Adam Smith, in his Theory of Moral Sentiments, did mention something like a person is more likely to care about his little finger than the sufferings of peoples thousand and thousands of miles away. But I don't know whether he went on to examine how this could affect peoples' perception of the free market.

But here is the real puzzle: Why others who share similar experiences of what I have encountered today stick to their original free market beliefs despite the bad experiences? How could they? Can they tell their loved ones what I did not dare to say to my friend. Answer is, I don't know. But do you?

This is a really bad day.


Wai Hong said...

We stick to free market capitalism for a simple reason: We know only too well that the alternative does not work. So we stick with the best that is available, even if it means great occasional personal sacrifice. Advocating otherwise, say socialist welfare, is to descend to the level of robbery. A morally upright person must never stoop so low.

As for Moral Sentiments, what Smith actually said was this: If we care more about a cut on our little finger than the loss of life of another person, the inner voice in us will shout out to chastise us. This inner voice is driving you to help your friend in need as you reflect on his situation and imagine the misery and agony you will suffer if you are hit with this kind of misfortune. Deep down, it is self-love, i.e. the urge to be spared of this kind of misery, that drives us to help those who are in destitute.


I did have such bad experience personally. I did feel frustrated, but I know that it was not caused by the fault of others. It just likes we feel unhappy but we can't blame others in a rainy day with an umbrella. And I know there is no better alternative to solve this problem.

You are very right. From my own experience, people do not need theories and explanations in such case. What they need are care and support. Believe me, it may take months in searching, but it will only become a few seconds memory later.

, I know that there is no such system that can avoild this experience