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The "Dog-Eat-Dog" Economic Delusion

Economics / Economic Theory Jan 04, 2015 - 12:56 PM GMT



Gary Galles writes: When people want to add extra “oomph” to negative depictions of self-owners acting without coercion — that is, market competition under capitalism — they turn to name-calling. One of the most effective forms is describing such competition as dog-eat-dog. When that characterization is accepted, the mountain of evidence in favor of voluntary social coordination can be dismissed on the grounds that it involves a vicious and ugly process so harmful to people that it outweighs any benefits.

Unfortunately, dog-eat-dog imagery for market competition is entirely misleading. It not only misrepresents market competition as having properties that are absent in truly free arrangements, but those properties are essential characteristics of government, the usual “solution” offered to the evils of dog-eat-dog competition. Further, it frames the issue in a way that precludes most people from recognizing why the analogy fails.

To begin with, dog-eat-dog is an odd way to characterize anything. I have never seen a dog eat another dog. I don’t know anyone who has. In fact, some trace the phrase’s origin back to the Latin, canis caninam not est, or “dog does not eat dog,” which says the opposite (and makes more sense, as an animal may try to protect its feeding grounds against competing predators, but it does not eat those competitors). It is nonsensical to rely on an analogy to something that doesn’t actually happen in animal behavior as a central premise toward condemning market systems as ruthless and hard-hearted.

Market Exchange Is Purely Voluntary

The dog-eat-dog characterization of capitalist systems is the polar opposite of reality. The private property on which capitalism is based mandates solely voluntary arrangements. Since the weak do not voluntarily consent to aggression that violates their rights, it protects them against coercion based on superior ability to harm others. In Herbert Spencer’s words, it is “an insistence that the weak shall be guarded against the strong,” which stops dog-eat-dog predation, the default setting in the absence of respect for individual rights.

Further, when one sees coercion in the private sector, it represents the failure of government to deliver on the only conceivable means by which it could advance everyone’s welfare — uniting citizens in mutual defense of their property to provide all a more secure basis on which to build mutually beneficial arrangements. As John Locke put it, “the end of government” is “the preservation of property,” protecting all citizens’ rights against predation, including that imposed by government. When force or fraud is enabled, government has rented or sold out this end to the highest political bidder. However, the problem is not in mutually acceptable arrangements, but in government that enables piracy whose prevention is its sole defensible rationale.

“Dog-Eat-Dog” Describes the Non-Market Events Known as War and Politics

Dog-eat-dog can be descriptive of behavior during war, which can cause desperation-induced atrocities. But war is not a market failure. It is aggression by a government or governments against others. In the process, it also involves government aggression against its own citizens through higher taxes, implicit inflation “taxes” and government expropriation of resources and citizens, as with military drafts.

Dog-eat-dog language is also increasingly descriptive of politics. As Bruno Leoni noted, politics has increasingly become used “merely as a means of subjecting minorities in order to treat them as losers in the field,” as in war. In such a world, as Friedrich Hayek noted in The Road to Serfdom, the massive payoffs to political hegemony lead the worst rise to the top. Along the way, we observe continued escalation of what former President Clinton called “the politics of personal destruction,” in scorched-earth electoral marches to Washington.

All of the above abuses can be seen as dog-eat-dog in nature — humans predating on other humans. But they are that way because government made them so, not because they are in any way inherent in freely chosen arrangements.

Despite the dog-eat-dog analogy’s usefulness in describing government behavior, how has it bait-and-switched people into blaming freedom and free markets? By directing attention away from two essential ways that market competition differs from predators in the animal world. The animal kingdom’s competition is a zero-sum fight for fixed resources provided by nature. But that zero-sum fight occurs only because animals do not trade, and therefore do not produce for other animals. But people do produce for others, and all parties can then benefit via trade. That makes market competition an incredibly positive-sum “game” in which each benefits him- or herself by finding ways to benefit others, made necessary by the need to get mutual agreement. As George Reisman noted, the result is very different — “one man’s gain is positively other men’s gain.”

People Exchange Goods Because It Benefits Them

These core insights are of fundamental importance. And without the distraction of dog-eat-dog and other similarly mischaracterizing language, people paying the slightest attention to economics would not miss them. After all, they are the focus of the second chapter in Adam Smith’s The Wealth of Nations, “On the Principle which gives occasion to the Division of Labor.”

Adam Smith there highlighted individuals’ “propensity to truck, barter and exchange,” as “common to all men, and to be found in no other race of animals.” And what was his illustration? “Nobody ever saw a dog make a fair and deliberate exchange … with another dog.” Other species do not make contracts, nor do they have a means of persuading others by offering or negotiating mutually beneficial voluntary arrangements. But for man, “the greater part of his occasional wants are supplied by … treaty, by barter, and by purchase,” which, in turn, “gives occasion to the division of labor,” and the massive expansion of output that makes massive expansions of consumption possible.

What Smith saw was that the fixed, nature-given resources that inform “dog-eat-dog” imagery are completely overridden by the human ability to create and exchange with others, and the consequent gains from specialization to produce more effectively for others than they can for themselves. And Smith is hardly the only economist to call attention to this. For instance, the textbook I used as an economics principles student — Alchian and Allen’s Exchange and Production — put those issues at the very core of economic analysis.

Dog-eat-dog imagery does offer some insight into understanding war, politics, and the failures of government, all because of their subversion of freedom. But it makes no sense to portray economic freedom, constrained to respect participants’ rights, as creating a desperate battle for survival, where “anything goes.” Such “I win, you lose” behavior traces back to given, limited resources, which is the constraint faced only in the absence of production and voluntary exchange. But that is not at all the case with capitalism, which has done more than any other social “discovery” to replace such behavior with win-win possibilities. As long as people’s ownership of themselves and their production is respected, that is, as long as arrangements are voluntary, production and exchange is the process by which all gain. And humans benefiting one another is a far cry from a dog-eat-dog world.

Gary M. Galles is a professor of economics at Pepperdine University. Send him mail. See Gary Galles's article archives.

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© 2014 Copyright Gary Galles - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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