Is it wrong to profit from someone else's misfortune?
Ask most Americans that question, and the instinct is to say yes. It sounds almost self-evidently true, the kind of thing that feels wrong to argue against. It is also, according to one of the sharpest economists this country ever produced, almost entirely backwards.
The late Walter E. Williams used to pose that exact question to his students at George Mason University, and then walk them through why their initial instinct was wrong.
— Thomas Sowell Quotes (@ThomasSowell) July 18, 2026
“Some say it's wrong to profit from the misfortune of others. I ask my students whether they'd support a law against doing so. But I caution them with some examples. An orthopedist profits from your misfortune of having broken your leg skiing. When there's news of a pending ice storm, I doubt whether it saddens the hearts of those in the collision repair business. I also tell my students that I profit from their misfortune—their ignorance of economic theory.”
The question does more than flip a seemingly self-evident proposition on its head. It's a reminder of why free markets outperform every other system of economics ever devised. When a voluntary exchange takes place, both parties walk away better off. A consumer might grumble about the price. A producer might complain about the cost of doing business. But their willingness to go through with the exchange anyway is worth more than anything either of them says afterward. Actions reveal preference more honestly than words ever do, and every completed transaction is proof, that both sides judged themselves better off for having made it.
This is the underlying engine of free-market economics that society so often forgets, because it's invisible. No one holds a headline-grabbing ceremony each time two people trade value for value, and both leave satisfied. That silence has convinced an entire generation that markets are a battlefield of winners and losers, when in reality, a market without coercion cannot produce a loser.
What does actually produce losers? Government.
Take any government intervention, and I mean any, and you'll find the same pattern: it favors one group at the direct expense of another.
Taxes take from some to give to others. Subsidies handpick certain businesses to succeed while their competitors are left to survive without help. Regulation favors the companies large enough to absorb the compliance costs, and buries the small ones that can't. The minimum wage tells some young workers they're worth a government-mandated wage, while pricing others out of the labor market entirely, denying them the first rung of the ladder altogether. And in New York City, rent control decides how much income a homeowner is allowed to earn from their own property, tilting the entire arrangement in favor of renters and against the person who owns the asset.
That is the real difference between markets and government. A free market cannot force you to trade. It can only offer you a deal good enough that you choose to accept it, which means every exchange leaves both sides better off. Government doesn't have to ask. It can simply take from one hand to another, and call the arrangement justice.
The next time someone insists that capitalism preys on the vulnerable, or runs on exploitation, ask a simpler question: when was the last time a business made you an offer you weren't free to refuse, and when was the last time government did?
