It used to be that few people in politics thought “quid pro quo” was mud worth slinging at opponents. But the D.C. impeachment dustup has brought the term into constant use. Unfortunately, that has not done anything to undo the pernicious effect the phrase has had on people’s understanding of voluntary exchange.
Quid pro quo translates as “something for something” or “this for that,” and could apply to virtually any sort of agreement, without a negative connotation. But legal usage has changed that meaning, by holding that a contract is binding only if it is a quid pro quo of goods or services of comparable value, now reflected in the American Heritage Dictionary definition as “an equal exchange or substitution.”
The implication that a legitimate exchange involves a transfer of effectively equal values between parties muddies our understanding of the voluntary arrangements within markets.
Using quid pro quo to describe voluntary market exchanges is far from the mark. In all voluntary exchanges, every party whose property rights are involved is made better off than before. For every un-coerced participant, it is an unequal exchange—in their favor. We would not agree to exchanges unless we believed that what we got was worth more to us that what we gave up. For instance, if you voluntarily traded me a baseball bat in exchange for a glove, I valued the bat more than the glove and you valued the glove more than the bat.
Viewing voluntary exchanges as involving equal values leaves people blind to the mutual benefits such inherently “unequal” exchanges produce. It defames voluntary market arrangements, especially in comparison with many of our interactions with government, which frequently involve something for nothing (quid pro nihil). It also blinds people to the wealth destruction created by government restrictions that reduce markets’ positive sum voluntary arrangements.
The idea that exchanges must be equal also opens the door to the politics of envy. If exchanges are supposed to be of equal values, people can easily be led to object that a trading partner earns too great a profit, making it “unfair” to them, even if they agreed to the arrangement without being coerced or misled. Similarly, price increases that occur when demand increases can always be characterized as inequitable, because the producers didn’t do anything to “deserve” the higher profits (even though it is precisely those greater profit prospects that produced the added output consumers desired). And not far behind such complaints are threats of added taxes or regulations that will reduce the gains from voluntary associations.
Thinking in terms of supposedly equal, quid pro quo arrangements also distorts people’s understanding of government redistribution. Such actions involve conferring added property rights on those individuals targeted for benefits. But since government has no resources but those it takes from members of society, it necessarily extracts them from others targeted for the corresponding costs. Such actions may be portrayed as a quid pro quo or social contract with those “helped,” but that characterization ignores the unjust imposition of harm imposed on the individuals forced to bear the burden. As Clarence Carson put it, “To the extent that force plays a role, quid pro quo is not the rule.”
Perhaps Frank Chodorov summarized government’s typical redistributive quid pro quo arrangements best when he wrote:
It is a quid pro quo arrangement, by which the power of compulsion is sublet to favored individuals or groups in return for their acquiescence to the acquisition of power. The State sells privilege, which is nothing but an economic advantage gained by some at the expense of others.
Quid pro quo is on many lips today. But its misleading use in the impeachment donnybrook is not its only misleading use. Using quid pro quo to characterize market exchanges as involving equal values is dramatically misleading. It sharply lowballs the value of voluntary market arrangements which benefit all participants. It falsely excuses coercive government arrangements by ignoring the harm they cause. The misunderstanding it creates, and the leverage it provides for envy to grow government and shrink freedom, enables not a beneficial social quid pro quo, but a mutually destructive quid pro quo for all but government favorites.
Gary M. Galles is a professor of economics at Pepperdine University.
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