A Short Course in Economics

1. Violence

Let us suppose that Crusoe, while exploring the island, comes across another shipwrecked individual named Jackson.  What types of interaction could take place between them?

One type is violence.  Crusoe may decide to kill Jackson, and/or he may decide to steal his belongings (property).  In either case, Crusoe gains satisfaction at the expense of Jackson, who makes a psychic loss.  Similar to the use of physical violence is the use of the threat of physical violence.  Both are types of violent actions.

Violence could result in the following developments:

a)     Inconclusive fighting, with neither opponent the victor, in which case the decision to commit violence will have been erroneous and peace may be declared, with both parties returning to isolation.

b)     The victor could kill the victim and return to isolation.

c)      The victor could rob the victim and leave, possibly to return later and rob again, in which case there is alternation between robbery and isolation.

None of these three developments establish a continuing relationship between Crusoe and Jackson.

d)     A hegemonic relationship could develop between the victor (who becomes the master) and the victim (who becomes the slave).  Crusoe, by the use of a continual threat of violence, forces Jackson to expend his own labor for the satisfaction of Crusoe rather than himself.  Jackson becomes slave labor to Crusoe.  The relationship may be called exploitation.  This is qualitatively different from voluntary labor services, where force is not required.

Any continuing pattern of interpersonal relationships between individuals is called a society.

But there are good reasons why Crusoe might refrain from using violence:

1. He may feel that violence is immoral.  In other words, being non-violent is an end unto itself which is valued higher than the end of attaining other ends through the use of force.
2. He may feel that initiating violence will, in the future, lead to violent reprisals, so that the action is not worth doing.
3. He may feel that the “costs of the war” are not worth it, the time and effort involved in preparing for and inflicting the violence outweighing the eventual benefits of victory.
4. He may feel that, in the longer term, cooperation with Jackson may be a better way to achieve his goals.

A free market society is one where no individual may initiate violence against another individual.   In other words, all exchanges in a free market are made voluntarily.

We shall postpone our study of the effects of involuntary exchanges - interventions - until a later chapter.