What goes around comes around

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James Peron | President | Moorfield Storey Institute | Contributing Author | Free Market Foundation | mail me |


There is a popular phrase people often use, “What goes around comes around.”

This is a truth so obvious it is almost a truism and it would be if there weren’t so many realms where this happens yet people don’t realise it or fail to notice it.

We know successful markets produce excess capital, which then increases economic prosperity even more either by reinvestment or spending. Capital produces prosperity and prosperity produces capital. See, what goes around comes around.

Consider the matter of diversity. Economist Richard Florida argues diversity is a necessary component of economic prosperity: “It’s time for diversity’s sceptics and naysayers to get over their hang-ups. The evidence is mounting that geographical openness and cultural diversity and tolerance are not by-products but key drivers of economic progress.”

What first got Professor Florida thinking in this direction was a meeting with a doctoral student who was looking at major American cities where gay individuals chose to live, and those they avoided. Florida noticed something: “My list of the country’s high-tech hot spots looked an awful lot like his list of the places with highest concentrations of gay people. When we compared these two lists with more statistical rigour, his Gay Index turned out to correlate very strongly to my own measures of high-tech growth.”

He soon found this diversity extended to other measures as well, such as ethnic diversity, artistic endeavours, even musical preferences: greater diversity created greater prosperity.

Diversity is one inevitable result of individual liberty. The freer a society the greater its diversity. Often would-be dictators make it their first goal to wipe out diversity – whether by exterminating ethnic groups, wiping out religious groups or scapegoat minorities. They demand conformity to their one acceptable form of existence.

If the theory of what goes around comes around is true then liberty should not just increase diversity but diversity should also promote liberty which is precisely an observation the liberal historian Lord Acton made in 1862.

He wrote, “Liberty provides diversity and diversity preserves liberty” for the simple reason that “diversity in the same State is a firm barrier against the intrusion of government beyond the political sphere which is common to all.”

The Nobel laureate economist Milton Friedman said the “great advantage of the market… is that it permits wide diversity.” He called diversity “the source of freedom but also the fruit of freedom.” Dr. Friedman’s observation is very similar to Lord Acton’s and history shows this to be the case.

Consider the history of Western Europe and religion. When orthodox Catholicism was established all other forms of Christianity were stamped out. Advocates of other forms of the religion were executed as heretics. There was one acceptable belief and it was enforced violently.

With the rise of independent city-states and nations we saw the Reformation. But this didn’t yet lead to tolerance. Instead the relatively few competing branches of the church went to war with one another for hundreds of years. Martin Luther said the Catholic mass should be suppressed by force, that Anabaptists should be put to death and Jews forcibly expelled from the country.

Historian Perez Zagorin recounted that “None of the Protestant churches – neither the Lutheran Evangelical, the Zwinglian, the Calvinist Reformed nor the Anglican – were tolerant or acknowledged any freedom to dissent. The result was millions died.

But as more and more sects arose, along with the rise of classical liberalism, tolerance for the freedom of others slowly became standard. Voltaire observed the result, “If one religion only were allowed in England, the Government would very possibly become arbitrary; if there were but two, the people would cut one another’s throats; but as there are such a multitude, they all live happy and in peace.”

He also noted markets encouraged this and rewards this new form of tolerance.

Take a view of the Royal Exchange in London, a place more venerable than many courts of justice, where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mahometan [Muslim], and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts. There the Presbyterian confides in the Anabaptist, and the Churchman depends on the Quaker’s word.

Historian Henry Kamen observed, The expansion of commercial capitalism, particularly in Europe’s two principal maritime powers, Holland and England, was a powerful factor in the destruction of religious restrictions. Trade was usually a stronger argument than religion.” He said by the mid 1600s, “it was widely held that trade knows no religious barriers” and “the abolition of religious barriers would promote trade.”  That was a goal entrepreneurs of all faiths could endorse.

What goes around comes around.


 



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