Tuesday, November 27, 2012

Incentives To Production

"The way to maximize production is to maximize the incentives to production.*  And the way to do that, as the modern world has discovered, is through the system known as capitalism - the system of private property, free markets, and free enterprise."

Henry Hazlitt (1894 - 1993)

Why is this so hard to understand?

When people are free, and their abilities are left unfettered, each free person will find what they want to do the most, or can do the best, and seek that thing.

"What do you want to be when you grow up?"  That starts out as a dream, but as we get older and more focused it becomes, in most cases, a reality.

What happens when the ability to seek or begin one's most-desired occupation, or start one's business, is hampered or even squashed by a lack of employment opportunity, severe underemployment, and general economic stall?

According to a survey recently published by Forbes, nearly half are dissatisfied with what they do and 81% are unhappy overall.  That is not a new statistic, and not at all surprising.  I heard those exact statistics in surveys taken when I was in business graduate school in the late 70s.  There was a general lack of "incentives to production" then too.  I remember a certain talking head on the TV, wearing a cardigan, calling it a "malaise," and telling us it was OUR fault!

We Americans, indeed people the world over, free or not, desire occupational fulfillment and happiness.  Particularly those who have been in school or training for long periods of time, and have their career paths hopefully mapped out, and are eager to get started. 

Everyone thinks they can contribute, wants to contribute and desires to contribute.

But what if gubment control, increased taxation, regulation of industry or job entry, permits and licensing, redistribution of economic activity, and ever-growing bureaucratic control clobber those "incentives to production?"

Answer me - what would you prefer to do with your life - contribute WHAT YOU accomplish or redistribute WHAT YOU  accomplish?

That's an easy one.

Oh, redistribution is NOT contribution.  Taxes are not investments.  To have bread taken from you and your family is not patriotic.  None of that "spreads the wealth around."  And all of that squashes "incentives to [such] production." 


People who say such tripe (patriotic contributions and investments) are the equivalent of pigs walking on two legs trying to control a barnyard.


* The underlining is mine.

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