Tuesday, July 2, 2013

There Is No Other Way

"The road to a higher wage level is through savings and investment in the tools of production.  There is no other."

W. M. Curtiss (1904-1979)

Where do wages come from?  A business or a job.

What's the only way out of poverty?  A business or a job.

What is the creator of most businesses or jobs?  The small businessman - the entrepreneur.

When Dr. Curtiss says "tools of production," he means what our economic textbooks would call the "factors of production."

The factors of production are what make up economies - land, labor, capital and entrepreneurs.

If a gubment wants to kick up the economy, Keynesian "fine tuning" won't help much as an economy is too complex for such decision making.  Bureaucrats can't stick enough pins at the right time and into the right places in the doll to make things happen.  As much as they try or as good as they think they can, bureaucrats are NEVER good at economic voodoo.  When those "fine-tuning" pins start getting stuck expect wild swings in economic activity, inflation, AND savings and investment.

What will kick up the economy is gubment policy, or consistent policies, that encourage entrepreneurs, and small businesses, to risk their savings and invest in themselves, or their ideas.

What encourages such risk taking?  Confidence in the future!  And the ability to reasonably predict the direction the gubment will be taking as regards that future!

Like the little train, if the entrepreneur thinks it can be done, the entrepreneur will eagerly climb the hill, confidently thinking he can get to the other side.

Profits will follow.  As the profits follow the entrepreneur will kick up the economy as jobs are produced, employees are hired, and wages are paid.  Wages are then spent on the STUFF that makes up economies, the goods and services of other entrepreneurs and businesses, all of whom have similarly climbed the hill to arrive at the other side.  The entrepreneurs are on the road to higher wages.  Those seeking jobs and a way out of poverty are the recipients of those higher wages.

THE OTHER SIDE of the hill is the desired goal - established, thriving, hiring and growing small businesses all KICKING BUTT.  

Look around the world at the thriving, kick-butt economies and you will find gubment policies that encourage savings and investment, and therefore the efficient use of land, labor, capital and the creation of entrepreneurs. 

Is there any other way?  As Dr. Curtiss suggests - there is no other way.

No comments:

Post a Comment