San Jose de Los Perros, Nicaragua: Waking up in the tropics is a pleasure. At 5 in the morning, we open up the double doors of our bedroom and look out at the sea. Already, the sky is lightening. A soft, pink hue surrounds the hills to the east; the beach is still in shadow. The sea remains a dark grey; all we really see are the lines of white foam made by the waves crashing on the shore and advancing up onto the beach. We imagined ourselves watching an attack of foot soldiers from a lookout post, like Robert E. Lee watching the attack on Cemetery Ridge. The white line moved ahead in a jagged formation, some troops making more progress against the enemy than others…but all of them are then driven back as the beach counterattacks and the wave recedes.
Below the crest of the hill and above the line of furthest advance of the white foam is not the quaint village of Gettysburg, but a group of condominiums built in the last couple of years. Walking past in the evening, we found the condos full of norteamericanos – soft, white people sitting on their soft, white plastic chairs enjoying the last soft light of day.
These people seemed to be having a good time. The area must be a paradise to them, as it is to us. The beach is empty. The sun is warm. The beer is cold. What more could they ask for? The most remarkable thing is that they are here at all. This life is now affordable even to a mid-level manager at the Gap or even a union factory worker in Milwaukee; they can live in a way that used to be reserved for the rich.
You may be wondering where this peregrination is headed. Since we are on vacation ourselves, we don’t feel the need to have a particular destination. But as we looked out our door this morning, we had an insight. A trivial one, but still one worth passing on.
In the 1920s, the tycoons and stock jobbers took the train from New York all the way to Palm Beach, where they built their mansions and enjoyed their repose. They were followed by the well-to-do middle classes…and then the not-so-well-to-do lower middle classes. The Venetian-style great houses on Palm Beach were followed by the bungalows two blocks back…and then by the trailers in Central Florida. But all of them found a new way of life in the Sunshine State, a life of leisure and luxury and warmth …a life that they never could have had in the North.
The whole phenomenon was new. It was only in the 20th century that the idea of leisure came into being in a major way. Before that, everyone expected to work from childhood until the end of his days. Then, thanks to the internal combustion engine, assembly lines and electricity, fairly large numbers of people accumulated enough capital so they could live without working at all. And then, later, after the imposition of the Social Security system in the 1930s, everyone came to believe that he deserved a period of rest and ‘retirement’ after the age of 65. Of course, relatively few people reached 65 back then.
Now the dream is ubiquitous. Everyone takes for granted that he can have ‘vacations’ during his working years, and that when his work is finished he can enjoy many more years of retirement – preferably in a warm place. In Europe, this dream is even more elaborate than in America. And among government workers, in both places, it is more extravagant than in the private sector. A government employee in France can count on six weeks of vacation each year…and, depending on his particular work career, he may retire as early as 55 or even 50. Thereafter, he lives entirely at the expense of the rest of the society.
Americans are more niggardly with their vacations…and more long suffering about their work. The typical American worker earns more take home pay, but he has to work a lot more hours to get it. And when he has finally has earned his reward – he is likely to head for the sun. Until recently, he aimed for Florida or Arizona. Now, he is more adventuresome. He may get out the map and find Mexico, Puerto Rico…or even Nicaragua. Arriving in large numbers, they are changing the places they come to.
“How do we know when we actually make things better?” we asked Elizabeth.
It was a leading question. We already had our answer. But conversation and cross-examination often work better when questions are put to the witness.
“I guess you just have to look at the results,” was the answer. It was not the answer we were looking for. We’ve found that Elizabeth rarely gives us the answer we want. Which is what makes her an ideal wife; she helps us maintain our humility.
“But how do you know if the results are beneficial…if they are good…if they actually make the world a better place?”
“You have no choice but to apply your own standards…your own aesthetic and moral sense. What else is there?”
“Well, that’s just the problem…
“I was thinking about what we’ve done here. We came here to Nicaragua before anyone else. Now, there are roads, houses, condos…the local people have work. Money is coming in. And the gringos seem to be having a good time.
“But suppose we had decided that what we wanted was simply to buy up land on the coast and keep it for ourselves. We could have had a big house and employed guards to keep others out. That might have been ‘better’ from our point of view…but would it have been better for others? Would it have been better for the world?”
“I don’t know, but I think it might. This was such a lovely place when it was virgin tropical woodlands. It’s not necessarily better because it has condos on the beach. And this idea of ‘better’ is a rather loaded term, don’t you think? It depends on what you mean by it. Better for whom? Better how?”
“Well, of course, it is freighted with all our prejudices, tastes, and desires. Suppose we had done nothing. It would have been better for the people who like virgin tropical woodlands…but we, and the local fishermen, would have been the only ones to appreciate them.
“Or suppose we had decided that we wanted to build a community where everyone had to live in green houses. Would that have been better? Well, yes, if you like green houses.
“What I’m getting at is that the only way to tell if you’ve really made things better or not is by following the money. If you had made more money building green houses than pink houses, it would have told you that more people liked green then pink. And the only measure of what is good…or what makes things better…is what people are willing to pay for, isn’t it? If you disagree with that, aren’t you merely substituting your judgment for the judgment of others? That’s what communists, neoconservatives and central planners do. If they decide that the world would be a better place if everyone lived in pink houses, they force everyone to live in a pink house – whether they want to or not. When you take away the freedom of choice, and the free movement of prices, you no longer know what people really want…and so you don’t know how to make things better.”
“Surely, not everything is reducible to money,” Elizabeth replied. “Paris Hilton might make a fortune producing a sex video. Is that really making the world a better place? You can pander to people’s weaknesses…to their flaws and foibles. You can make money, but it doesn’t necessarily make the world a better place, does it? I guess I would say that the world is always a worse place when you force people to live in pink houses when they don’t want to. But it’s not necessarily a better place when you sell them pink houses either.”
“Yes, that’s it, isn’t it? You can try to make the world a better place by holding a gun to people’s heads…or by stealing their money…or killing them. But it rarely goes well. Because if they are not free to express their own private wishes – even if they are depraved or tacky – you have no way of knowing whether you’re really doing good or not. People express what they want…and what they regard as making their lives better…by how they spend their money. If you override them, by forcing them to do things they wouldn’t otherwise do, you are bound to make a mess of things. Of course, even if you proceed without violence, you can still make a mess of things. But that’s just life. You do your best. Sometimes you succeed and sometimes you don’t.”
We both looked out the door again. There, on the Pacific Coast of Nicaragua…a country that was once a banana republic…then an experiment in mass delusion…and lately, a tourist destination, where plumbers and dentists from North America are enjoying a few days in the sun. They have the ocean in front of them…air-conditioning behind them…and ice-cold drinks inside of them. They bought their condos and their vacations of their own free will. And now, with the sun peaking over the hills, they rise and stretch…and look out their own doors too…
…and who can doubt that it is a better world?
Markets and Money