– July 11, 2020
amazon delivery packages

At first glance, the package on the step looked like it contained two or three rolls of paper towels. It’s too small to be paper towels, I thought. I picked it up. It’s definitely too heavy to be paper towels. I looked at the return address. And in any event, I doubt we’re buying paper towels in small quantities from Turkey.

I brought the package inside and, as my wife’s name was on the label, set it on the dining room table to await her attention. She got home, opened the package, and showed us another new rug she had bought from a Turkish seller on Etsy as part of an ongoing interior redesign. The country of origin caught my eye as I’ve noticed that a lot of people on Chess24.com, the chess website I joined a few weeks ago, are from Turkey. In the search for big, dramatic solutions to major problems, it’s easy to overlook the mundane and hard-to-notice accretion of innovations that together are actually making poverty history. 

Adam Smith famously pointed out “that the division of labor is limited by the extent of the market.” Innovative ecommerce platforms like Etsy, Amazon, and eBay are making their mark by extending the market. Etsy, in this case, is bringing Turkish rugs within our easy reach. Importantly, Etsy is bringing money within easier reach of producers in another part of the world. I specialize in economics articles. Turkish producers specialize in rugs. The world gets more of both.

Of course, I doubt that many people making rugs in Turkey care to read my articles or listen to my lectures. They might want chess lessons instead, and I’m not anywhere near strong enough as a player to offer them. Money solves the problem by serving as a medium of exchange. My students and readers get economic analysis. I get rugs. Turkish rug manufacturers get chess lessons and the opportunity to play grandmasters on Chess24 (I just challenged GM Jan Gustafsson in a “Banter Blitz” in another window; I’m not optimistic about my chances). We get a little more of the things that make our lives better. Importantly, they’re things that make our lives better as tested against our willingness to pay with the fruits of our labor rather than as determined by a panel of experts who know what’s best for us. But I digress.

As M. Todd Henderson and Salen Churi explain in The Trust Revolution, eBay and Etsy are also providing what they call “microregulation.” We could probably take the case to court if we thought we were ripped off by an eBay or Etsy seller, but it’s almost certainly not worth hiring a lawyer over a few dozen or even a few hundred dollars. eBay and Etsy provide us with transparent information about sellers (in their rating systems) and quick and easy dispute resolution when things go awry. Just a few days ago I made an errant Xbox purchase and was able to get a refund quickly and easily without having to enlist the government’s help. The private sector governs imperfectly–I’ve had a couple of online transactions go badly wrong–but it governs pretty well.

Online trade in handmade goods from around the world raises the uncomfortable possibility that we’re buying goods being made by children or slaves working in inhumane conditions. Etsy, again, has a brand name to protect and prohibits products made with child labor or involuntary labor as they explain in their Ethical Expectations. Their system is not perfect, but no system is or ever will be in a world of almost eight billion people with different ideas, beliefs, and ethics. I suspect, moreover, that they are keen to improve it.

One hundred years ago, John Maynard Keynes wrote this in The Economic Consequences of the Peace:

“The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality [AC: well, not in 2020], could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable.”

Even in 1920, it wasn’t a government, mainly, that made this possible–and the likelihood that you were ordering or commanding the fruits of exploitation and tyranny was almost certainly much higher than it is now. How much more ‘normal, certain, and permanent” is this state of affairs today, and how much more “aberrant, scandalous, and avoidable” are its abuses? Private enterprise and private governance pushed along by people seeking little more than their own advantages work remarkably well. If you want more evidence, look no further than the package on your doorstep.

Art Carden

Art Carden

Art Carden is a Senior Fellow at the American Institute for Economic Research. He is also an Associate Professor of Economics at Samford University in Birmingham, Alabama and a Research Fellow at the Independent Institute.

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