[Market Economy Guide] What Will You Choose?

“Which would you choose, money or wisdom?” … Gandhi: “I’d choose money, because it’s what I don’t have.”

■ A Word from the Author

“I am very pleased to have the chance to meet readers of Saenggeul Saenggeul. I plan to continue this series in a storytelling format so that middle and high school students can easily understand various areas of economics, including markets, businesses, entrepreneurs, government, labor, the environment, and welfare. Shall we set off on this journey together?”

■ Check Point

Our lives are a constant repetition of economic choices. What we choose and how we choose are entirely up to each individual. Let us discuss the things that limit freedom of choice.

When Gandhi was studying law at university, there was a professor named Peters. He was often displeased with Gandhi because Gandhi did not bow his head to him. One day, Professor Peters was eating lunch in the cafeteria when Gandhi sat down beside him. The professor said arrogantly,

“Gandhi, perhaps you don’t know this, but pigs and birds do not sit together to eat.”

Gandhi replied at once, “Don’t worry, Professor. I’ll fly away somewhere else.”

Then he moved to another seat.

Enraged, Professor Peters tried to get revenge through an exam question, but Gandhi answered every question with ease. The professor then posed one final question.

“Gandhi, suppose you are walking along the road and find two sacks. One contains wisdom, and the other contains a great deal of money. If you could keep only one, which would you choose?”

Gandhi answered immediately, “Of course, the sack with the money.”

Professor Peters laughed and said, “If I were in your position, I would choose wisdom!”

Gandhi replied coolly, “People tend to choose what they do not have.”

If two sacks, one of money and one of wisdom, were placed before you, what would you do? Wisdom is valuable, but money is also essential. Yet just as you cannot chase two rabbits at once, you cannot have both money and wisdom at the same time. Will you choose money and live more comfortably, or gain wisdom and use it to attain material prosperity? Neither choice is bad, because both are helpful. But choosing one means giving up the other, so you should choose the one that is better relative to what you are giving up.

If money and wisdom were things that could be exchanged in the market, it would be desirable to choose whichever had the higher price, because what remained after the exchange could be used elsewhere. But there are limits both to buying wisdom with money and to gaining money through wisdom. Since money and wisdom are not easily exchangeable, it is better to choose what is directly more helpful to you. In other words, what matters is which of the two—money or wisdom—is more useful to you.

From that perspective, Gandhi’s remark that, as a wise man, he needed money more is persuasive. The satisfaction he would feel from acquiring money would be far greater than the satisfaction of gaining additional wisdom. By contrast, the professor, having plenty of money, naturally thought it obvious to choose wisdom.

In 1885, U.S. President Franklin Pierce asked the chief of the Suwami tribe, who lived in what is now Washington State, to sell their land to the United States. The Indian chief replied, “How can you buy and sell the warmth of the sky and the earth? Such an idea is very strange to us.”

However, among advanced countries such as the United States, where urban civilization took root rapidly, land transactions began quite early. In 1867, Alaska, which had originally belonged to Russia, was sold to the United States for $7.2 million. Americans harshly criticized the purchase, saying the United States had paid money for a barren wasteland that Russia considered useless, and other countries mocked it as well. But in 1897, gold was discovered in Alaska, and in 1967, oil was found there. In addition, the United States bought the land known as the Great Plains from Napoleonic France and acquired Indian-owned land—today’s New York—in exchange for a bottle of Scotch whisky, thereby obtaining two regions that would become centers of global agriculture and the economy. The United States, which became a model of a successful capitalist nation, was a country that prepared for the future through transactions. At crucial moments of economic choice, it made sound judgments and appropriate exchanges.

Our lives are a constant repetition of economic choices

People constantly face moments of choice in everyday life. By what standard should we make those choices? Our lives are always a repetition of economic choices. The market is formed when people choose what they need more and pay for it with what they have in relative abundance. Tastes differ from person to person, and so do people’s needs. What is unnecessary to one person may be needed by another.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 무엇을 선택할 것인가?

Author: Sung-no Choi

Date: 2018-10-01

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=16&idx=11133