Every time I travel, I’m overwhelmed by the mind-boggling complexity of the endeavor and the fact that no one is in charge. Travel consists of enterprises with a lot of conscious coordination, but no single mind plans (or even could plan) the entire system. Planning is decentralized and polycentric, a term that appears throughout the work of 2009 Nobel Laureate Elinor Ostrom and her husband, Vincent. We live in a commercial society where exchange lets us harness people’s regard for their own interests and encourage them to use their talents for strangers’ benefit.
Innumerable hands and minds make every trip possible. People who don’t know me work in oil fields and refineries, producing the fuel that gets me from where I am to where I want to be. It’s hard, dangerous work, and they’re not there because they care about me. They care about themselves and their loved ones and find they can serve them best by helping me care for myself and my loved ones.
Flight attendants take care of me when I fly by keeping me comfortable, hydrated, and caffeinated. They might think they’re just pouring coffee and passing out little bags of almonds, but these seemingly-mundane tasks take care of me mentally and spiritually when I’m on my way there or back again. The work might seem trivial, but I assure you that a cup of coffee and a smile go a long way when I’m on a plane at or before dawn and preparing to get some work done en route.
Then there are hotels. People I don’t know make sure I have a comfortable place to sleep and a good breakfast. Once again, it’s not because they care about me as such; it’s because we have a contract. I get food and shelter in exchange for little bits of data called “dollars” that the hotelier can bring back and exchange for economics lectures and articles. I get food and a clean, comfortable room. The people who feed me and clean my room earn income. The managers and executives who coordinate the whole show earn income, too. People who saved the money that financed the venture earn interest. Profits go to people who bet lodging is the best way to use those resources at that time.
Contrary to popular belief, managers and shareholders don’t sit back collecting surplus value ripped from the skin of the cooking and cleaning staff. Instead, they specialized in acts of judgment. Shareholders decide sheltering weary travelers is the best way to use some of their capital. The company creates value for workers, as well, beyond just wages and benefits. They take on some of the risks their employees would have had to bear had the employees struck out as entrepreneurs or independent contractors. Contractual income (wages, salaries, and benefits) may not be as high as residual income (profits), but it’s safer. Do they owe me more comfort? No, they only owe me exactly what I’ve paid for.
No one does this for free, but they take care of me because it provides them with the income they need to take care of themselves and their loved ones. In addition, their efforts freed up my time and energy so I could focus on economics research and education. I do it partly because I love it, but also (and primarily) because providing economics research and education is the best way for someone with my skills to provide for my loved ones.
At the beginning of his classic essay “I, Pencil,” Leonard E. Read quoted G.K. Chesterton as saying, “we perish for want of wonder, not for want of wonders.” Commercial society is a wonder that produces other wonders, and we should wonder at it. It is a welcome respite from our blood-soaked history, and I never cease to be grateful for free markets because they make it possible for people to care for themselves and their loved ones by caring for me rather than killing me.
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