There is a photo of a restaurant whiteboard that has bumped around the interwebs for years. I first saw a version in April 2016, posted on Twitter by Scott Lincicome. Robert Tracinski  offered some comments at the time, but the sentiment has now become a meme.

I have reproduced a version of the message here, written out in hippy-loopy longhand, the way this message should be written out. Here it is:

Those of us of a “certain age” remember the back-to-nature, self-sufficiency movement of the 1960s. There was a range of literature both celebrating and “how-to”-ing economic independence and moving “off the grid.” The most beloved source was probably “The Whole Earth Catalog,” which Steve Jobs famously compared to a paper version of “Google” in his 2005 Stanford commencement speech. 

Now, being able to find information about how to do things on your own was, and is, a blessing. Perhaps unsurprisingly, the WEG ceased publication with the development of the internet. After all, the combination of Google and YouTube means that I can find a video that shows me how to do almost anything I could want to do. (Including “Grow Your Own Food!”)

That’s what makes the little whiteboard meme so interesting. Whoever first wrote it out recognizes that it makes no sense to “grow your own food.” Instead, what you need to do is grow a large quantity of a different crop, and trade for everything you don’t have. In other words, there are  two states of world: 

In State A I grow everything for myself, in small amounts. Say I have four acres, and I grow one acre of beans, one of corn, one of wheat, and one of tomatoes. The three other people in the world do the same thing. Overall, Person 1, Person 2, Person 3, and Person 4 each devote one acre each to each crop, so our little community has four acres of beans, four of corn, and the same for wheat and tomatoes. We are all self-sufficient! (If you remember the ‘Sixties, now is the time to hum “I am a Rock, I am an Island.”)

In State B I grow just one thing, on all of my four acres. Persons 2, 3, and 4 do the same. And then we exchange. You’ll immediately see that this means that the same total acreage is devoted to the same crops in both State A and State B: four acres of beans, of corn, of wheat, and of tomatoes. But whereas in State A each of us is self-sufficient, in State B we are mutually dependent.  

So, there’s no difference, and we’d be better off in State A, where we don’t depend on anyone else, right?  What’s so cool about the “free food” meme: the writer recognizes the error in this reasoning!  We are actually better off in State B, perhaps by quite a bit, because of what Adam Smith taught us about Division of Labor. 

But the memer doesn’t understand the principle that s/he was working with. Food is not free; it can’t be. If I grow one thing, the cost is whatever I didn’t grow. Further, if I eat something, it is not available for you to eat. So food always has a cost. The problem is how to get more, and better, and more various kinds of food, at lower prices, including costs to the environment. 

The price of expecting others to give me food I lack is for me to give them food they lack, so that the exchange makes both of us, or all of us, better off. Famed George Mason University economist Walter Williams summarized Smith’s insight accurately: “The better I serve my fellow man…the greater my claim on the goods my fellow man produces. That’s the morality of the market.”

As Adam Smith put it: 

The time spent in two different sorts of work will not always alone determine [the barter rate of one good for another]. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account…But it is not easy to find any accurate measure either of hardship or ingenuity. In exchanging indeed the different productions of different sorts of labour for one another, some allowance is commonly made for both. It is adjusted, however, not by any accurate measure, but by the higgling and bargaining of the market, according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life. (Wealth of Nations, Book I, Chapter 5)

So, the memer has a good idea: we’ll each grow a crop, and then trade. But it would be better still to have a commercial society, in which there is some commonly accepted measure of the value of the service we are providing one another in growing food to share.

Walter Williams extended Smith’s insight, in a way that makes clear why the system works so well: 

Say that you hire me to mow your lawn and afterwards you pay me $30. What I have earned might be thought of as certificates of performance, i. e. proof that I served you. With these certificates of performance in hand, I visit my grocer and demand 3 pounds of steak and a six-pack of beer that my fellow man produced. In effect, the grocer asks, “Williams, you’re demanding that your fellow man, as ranchers and brewers, serve you; what did you do in turn to serve your fellow man?” I say, “I mowed my fellow man’s lawn.” The grocer says, “Prove it!” That’s when I hand over my certificates of performance — the $30.

Unsurprisingly, the system of money exchange that we have devised instead works better than the barter system of farming the romantic memer longs for. But that’s only because such people have never been near a barter system—or a farm, for that matter.

 

Michael Munger teaches at Duke University and is Director of the interdisciplinary program in Philosophy, Politics, and Economics (PPE) at Duke University. He is a frequent guest on EconTalk.

Read more of Michael Munger’s writing at Archive.