Miraculous Markets: Water Into Wine

Libertarians are often accused of “worshiping” the free market. But the truth is, markets can perform miracles.

A car growing in Iowa?

David Friedman (son of Milton and celebrated economist in his own right), likes to say there are two ways to produce a car: you can build it in Detroit, or grow it in Iowa.

How does one grow a car in Iowa? The recipe is very simple. Plant seeds and wait for them to grow into wheat. Harvest the wheat, and ship it across the Pacific. Wait a few months, and the ships will return loaded with Hondas and Subarus.

Transforming wheat into automobiles seems pretty miraculous. Still, the Vatican might not buy it.

So consider this: Soybeans are the eighth largest U.S. export to Spain. Spain is the fifth largest wine exporter to America. American farmers water the soy plant, harvest the beans, and ship them to Spain. The boats come back carrying wine.

When trade is free, it can turn water into wine.

That’s a miracle if I’ve ever heard one.