"Rallies, concerts, vigils, and news conferences." "Tens of thousands of people." Oh my goodness! And why? Because of competing demands for scarce resources. On the one hand, there are the environmentalists who want to preserve the old-growth forest home of the northern spotted owl. On the other hand, there are the men and families who earn their livelihoods from cutting the timber and operating the mills that feed America's lumber industry. And in the middle is the federal government, owning the land in behalf of "all of us"...and stymied in trying to find a palatable solution for the parties.

For you see, when we say that the government owns society's resources, what we really mean is that nobody owns the resources. But each person thinks he does. And so the system of allocation becomes an intensely political one. Each side musters its supporters. Each side flexes its political muscles. They converge in rallies and demonstrations. They hold news conferences. Since the decision will partly be decided in the court of public opinion, each side attacks the motives of the others. Timber firms are called "greedy corporations wantonly exploiting the environment." Environmentalists are called "tree huggers who would rather save an owl than feed a family." And as the government attempts to make political compromises, each side feels angry and ripped off.

It is often said that there are no laboratories in economics. And yet, every day across the country, we get a nation-wide experiment in what an economy would look like in which private property doesn't exist, and everything belongs to everybody. These experiments are held Monday through Friday, every week of the year right in your home town. You can find them taking place at your local day care center.

At the local day care center, there is no private property and none of the children are allowed to rent toys for their private use. Put a bunch of three-year olds in a room full of toys and what happens? Anybody who has kids knows only too well. SALLY: "Give me that." MARY: "I was playing with it first." SALLY: "You got to play with it yesterday." MARY: "No I didn't!" SALLY: "If you don't give it to me, I'm going to tell the teacher." MARY: "If you tell the teacher, I'm going to bite you." SALLY (grabbing toy): "Lemme have it!" MARY (holding on to toy): "No, it's mine!" (Both kids yank and jerk on toy. Toy breaks.) SALLY and MARY (together): "Waaaaah!"

Of course, as consumers get older, they learn to behave in somewhat more sophisticated ways. Rather than kicking and screaming and biting each other, the consumers hold rallies, concerts, vigils, and news conferences. They generally act in a more restrained manner. Yet the dynamics are the same. Each side believes that the resources belong to them. Each side believes that the other side is illegitimately taking their resources away. And the government has to play the role of day care provider in deciding who gets what.

Contrast this system of resource allocation with how things work in the private sector. Every day, millions of resources are allocated with hardly a notice. When the steel companies decide for whom to produce their steel, there aren't demonstrations and news conferences. The Teamsters don't send bus loads of workers to Bethlehem, Pennsylvania to argue that the steel needs to be used for Mack Trucks so that there will be jobs for their members. Consumer rights advocates don't hold news conferences to alert the public that if the trucking industry gets the steel, there will be fewer automobiles available for working class families. Doctors don't demonstrate outside the steel plants on behalf of their patients who need the steel so that there will be more iron lung machines.

Why not? Because the system of private property rights that underlies free-market/capitalistic economies says that resources go to those who pay for them. Nobody has to give something up unless the person who wants to take it from them makes sufficient compensation. In the process, both buyer and seller are pleased by the working of the market. Each side feels as if they are made better off by the trade. And in the end, society is a more decent, civilized place.

It is our impression that most people seem to think that free-market economies--since they are allegedly based on greed--are morally inferior to socialistic economies. While they admit that free-market economies make their societies wealthier, they also consider the wealth that is produced to be a "dirty" kind of wealth. Socialism is thought to represent the higher road. We beg to differ.

It is very important in this respect to see the distinction between the nature of consumers--be they greedy, tender-hearted or whatever--and the nature of the economic system they are placed in. The free-market doesn't require individuals to be greedy. Even in a world full of Mother Theresa's, we would need to have prices to direct the Mothers so that they would know where resources have their highest valued use. On the other hand, the free-market also doesn't require individuals to be saints. It takes people as they are. Saints or sinners, the beauty of the free-market system is that it provides the information they need to make the right choices.

However, free-market capitalism also has two incredibly beneficial attributes that are often overlooked. First, the free-market is able to get people to act AS IF they cared about others even when they don't. And second, it minimizes the social conflicts that invariably arise when scarce resources need to be allocated among competing wants. In a twentieth-century world that has seen great turmoil and strife, the social benefits of free-market economies represent remarkable achievements indeed.