If it's in the News, it's in our Polls. Public opinion polling since 2003.


Market Magic

A Commentary By John Stossel

People have long lists of things they think the market can't possibly do -- from building subways to fighting wars. Sometimes, the market does them anyway.

War, for example. Even conservatives, who often praise markets, assume that only government can fight terrorists. Tell that to Matthew VanDyke.

VanDyke and his group, Sons of Liberty International, spent the past months in Iraq training the Nineveh Plains Protection Unit, several thousand Christians willing to risk their lives fighting against ISIS's brutal forces there.

I don't know if Sons of Liberty are as competent (or more competent) than the U.S. military, but they're not using taxpayer dollars or getting the U.S. involved in a wider war.

My TV show on "market magic" this week looks at other things markets do that we're always told only government can do -- like run courts.

People frustrated by legal bureaucracy and tired of waiting endlessly for government courts to make decisions now have alternatives. They can go to private arbitration companies and have their day in court without ever entering a government courtroom. An ABA survey of lawyers found 78 percent said arbitration was more efficient than government.

"But maybe the for-profit arbitrator is not fair or your opponent bribes the judge!" say market skeptics. That can happen. But if an arbitration firm gets a reputation for making flaky decisions or taking bribes, customers just don't use it. It goes out of business. That's how the free market works.

By contrast, badly run government courts, like other government agencies, never go away. When they fail, they just claim to be "underfunded" and demand more money. Congress usually gives it to them.

Our air and most of our water are of course public property. It's good that we have an EPA (though we could use a less oppressive one) to protect such resources. But that also leads people to think we need more government force to handle problems like California's drought.

Economist Zachary Donohew points out that California's water shortage isn't just caused by drought, though. It's caused by government refusing to allow the price of water to be set by market forces.

"Water shortages are manmade," says Donohew. "We don't send the right signal to indicate how valuable it is, and we don't make it easy to move water from one use to the other."

In most of America, taxpayers pay for reservoirs and aqueducts, but water sent to consumers, farmers, etc., is practically "free." So people waste it. But if the price were allowed to rise to reflect its scarcity, everyone would economize. You might decide you need to cook but not wash your car. Important activities like agriculture would continue, but farmers might grow grapes instead of oranges, because oranges need so much water.

Decisions like that happen naturally when markets set prices. A price is more than money -- it's information. It tells people what is valuable. Then people adjust.

When we forget that, we panic needlessly. Even The Wall Street Journal, which generally understands markets, recently reported on a "looming shortage" of airline pilots.

But if there really is a shortage of pilots, pilot salaries will rise. More people will train to become pilots and any shortage will be brief.

The market steers people and resources to where they're most valued. That happens even faster if government doesn't interfere with markets by offering its own, poorly run versions of the services people want.

My fellow New York City subway riders believe government had to dig the subway tunnels and run the trains because "there's no profit in mass transit -- it loses money!" But in fact, most of New York's subways were built by private businesses.

They only turned them over to government because politicians forced them to. A mayor claimed a proposed fare increase to 5 cents was "too much." Now a subway ride costs $2.75.

I used the phrase "market magic," but the market is actually better than magic, because there's nothing mysterious about it -- it's all logical.

The mystery is why we keep letting government get in the way.

John Stossel is host of "Stossel" on Fox News and author of "No They Can't! Why Government Fails - But Individuals Succeed." For other Creators Syndicate writers and cartoonists, visit www.creators.com.



See Other Political Commentaries.

See Other Commentaries by John Stossel.

Views expressed in this column are those of the author, not those of Rasmussen Reports. Comments about this content should be directed to the author or syndicate.

Rasmussen Reports is a media company specializing in the collection, publication and distribution of public opinion information.

We conduct public opinion polls on a variety of topics to inform our audience on events in the news and other topics of interest. To ensure editorial control and independence, we pay for the polls ourselves and generate revenue through the sale of subscriptions, sponsorships, and advertising. Nightly polling on politics, business and lifestyle topics provides the content to update the Rasmussen Reports web site many times each day. If it's in the news, it's in our polls. Additionally, the data drives a daily update newsletter and various media outlets across the country.

Some information, including the Rasmussen Reports daily Presidential Tracking Poll and commentaries are available for free to the general public. Subscriptions are available for $4.95 a month or 34.95 a year that provide subscribers with exclusive access to more than 20 stories per week on upcoming elections, consumer confidence, and issues that affect us all. For those who are really into the numbers, Platinum Members can review demographic crosstabs and a full history of our data.

To learn more about our methodology, click here.