Leveling The Playing Field

Although it rests on fallacies that have long been debunked, the myth of a level playing field is one that refuses to die. In it's most radical form, this is the doctrine espoused by marxian socialists. In their destructive pursuit of an egalitarian utopia, they sought to completely "level the playing field" in every conceivable aspect. The use of the word "level" here does not denote a balancing out, such as where one side of a scale is raised to the level of the other, but is more akin to the way we leveled Hiroshima during WWII. The socialist goal of making everyone equal could only be achieved by reducing the entire population to extreme levels of poverty and oppression.

When we embark down the dead end path that leads toward egalitarianism, these are the results we can expect. This idea, in all its forms is an envious, self-serving doctrine that seeks to bring down others in order to benefit at their expense. It is an ideology that seeks to replace freedom with force, individuality and diversity with conformity and uniformity, success and efficiency with "fairness" and "social justice", and the spontaneous progress of the market with rigid government planning.

Although there are many facets of this drive towards "fairness," campaigns to level the playing field are specifically directed at business competition, especially when it comes to international trade. It has been imagined that there exists some notion of a "playing field" which in the absence of government intervention and regulation falls out of balance and tilts in favor of some to the detriment of others. The advantage that this gives to some companies or individuals is considered "unfair" because it makes it hard for others to compete. A government is naturally needed to put things back on an even keel and to make sure everyone is playing fair.

If you read and watch the news for very long you're likely to hear many examples of proposals to implement tarrifs, taxes import quotas and other restrictions all in the name of fostering increased competition and making things fair for everyone. This mentality is also very prominent in the logic behind the anti-trust laws. These laws were used heavily in late nineteenth and early twentieth centuries to break up big companies, most often at the behest of smaller competitors. Especially as competitive pressure from Asia and other third world nations grows, this noise will continue to get louder and more demanding. It's imperative that we see it for what it is. Let's examine this concept a little more in depth.

On the market, a business succeeds by catering to the needs and desires of consumers at a price that they are willing to pay. Those organizations that do this best will make the most profits. Those who fail in this regard will eventually incurr losses that will drive them out of business. Now, of course there are some natural advantages that will exist in this situation. Some entrepreneurs and managers are more talented, more insightful, and more creative and innovative than others. Some companies may have been around for a while and may thus have developed a good reputation which allows them to sell their goods at a higher price than new, unproven competitors can. Trade secrets such as recipes, blueprints and technological breakthroughs, to the extent that they can be kept secret, also provide a large advantage to those firms that possess them.

Numerous other advantages may exist in the form of location, knowledge, specialized skills, abundant capital, etc, but all such advantages are either naturally occuring or are the product of hard work and dilligence in the pursuit of profit. In no way can they be considered "unfair" and attempts to eliminate them are tantamount to destroying the incentives that drive the entire market process. Such attempts can only lead to economic stagnation, capital deccumulation and declining living standards.

If we dissect the above analysis we will see that there are two types of advantages (actually there are three, but we will discuss the third one later). First of all, there are those advantages that are naturally occuring and are a part of man's nature. Men are not created equal when it comes to abilities. Some are smart and others dull. Some are athletic while others are clumsy. Some are naturally skilled at arithmetic, music, abstract thinking, the arts etc, while others have much lower levels of talent. While those who are born with less ability may look enviously upon their more able peers, any attempt to rob them of their talents by force is morally wrong and socially destructive.

Should we mandate that all NBA players have their legs cut off below the knee so that the handicapped can play in the NBA? Should those who are especially smart receive forced lobotomies to bring them back in line with the average? This is of course absurd. There is nothing wrong with varying levels of ability. This is obviously how nature intended things to be. The second type of advantage is that which is derived from hard work and dilligent effort. This is the notion that the a man is entitled to the fruit of his honest endeavor. If by a combination of hard and/or smart effort, natural ability and circumstance, a man acquires material success, so be it. Such a man benefits his fellow men as well as himself. Should we require all profitable businesses to distribute their profits to those who are incurring losses in order to even things out and make the "playing field" "fair"? These questions are of course rhetorical since the answers are clearly no. Yet this is exactly the mentality that is driving the push for a "level playing field".

Ricardo long ago put forth his law of comparative advantage, explaining how regardless of ability, everyone can maximize their well-being by specializing in what they do best and trading with others. To restrict what some can do in order that others who do it worse can compete, is counterproductive and impoverishing. It benefits small parties at the expense of everyone else. This is a widely understood and acknowledged law of economics. So who is behind this push to use government power to level the playing field?

There seem to be two main types of adherents of this doctrine who have completely different motives. First there are those who seem to genuinely belive in promoting "fairness" to help the less fortunate and who due to their ignorance of economic principles are caught up in what seems like a sensible cause. They believe that the government can and should use forceful restriction and regulation to even things out and make the world a fair place. I would suspect that this type makes up the bulk of all the varying egalitarian movements. While this is unfortuante and somewhat frustrating, these people are not the main problem.

The other type are the ones who actually propogate and foster this doctrine. They are of course those who stand to benefit the most from the implementation of their desired policies. This includes politicians and special interests, namely inefficient, noncompetitive businesses. It is here that we can clearly see the playing field ideology for what it is: a plea for protection. When it is thus unveiled it can be easily and soundly refuted and should warrant no further attention. The arguments against protectionism are old and unassailable. They have been laid down repeatedly by prominent economists for the past three centuries.

And yet, we can expect that this cloak will continue to be used to promote protectionist policy and legislation for as long as we have a government willing to cater to special interets. Rather than a rule of law system where property and the right to trade are firmly protected, we have an arbitrary system of patronage and handouts where the politically well-connected and those willing to spend lots of money can purchase protection from competition. The masses usually don't know enough to know when the wool is being pulled over their eyes with regards to economic matters. It is fairly easy to concoct a catchy, reasonable sounding slogan (like "leveling the playing field") that can be used to rally popular support for protectionist policies. It is wasteful, it is fraudulent, it is impoverishing and yet despite it's intellectual bankruptcy and the abundance of arguments against it, protectionism lives on.

There is one more point to consider. There are times when a leveling out of certain advantages is genuinely needed. This is the case where special privileges have been handed out and regulations and barriers to entry have been erected by the government to keep out competition. These examples abound throughout the United States and the world. In such instances, these artificial barriers should be leveled to allow free trade and the existence of real competition. This is the only case where the doctrine of a level playing field holds any water. For the best results this leveling should be done swiftly and completely.

In truth there is no such thing as a "level playing field." This is evident simply by observing the natural conditions of man's existence. Life is not a flat field where everyone starts off on equal footing. It is a rough and rugged terrain, dotted with hills, mountains, valleys and cliffs. We should be allowed to tackle it with all the capacity our faculties allow, and without the artificial barriers erected by our rulers to slow us down. Trade and industry should be left to the initiative of private citizens and voluntary organizations where competition and cooperation can operate unhampered and unmolested.