Improving Lives, or Trampling on Them? Invisible Hands Don't Trample

"The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." 

Adam Smith (1723 - 1790)

This 18th-century quote is perfectly applicable today!

Note the word "capitals."  Capital is one of the factors of production, which are defined as land, labor, capital and entrepreneurs.  

If production is desired, if economic growth is to be achieved, the factors of production must be employed, or allowed to be employed, to be able to PRODUCE!

For any gubment, or anyone in gubment, to decide that it is possible to direct the private sector's economic activities is simply impossible.  It's impossible!

As Adam Smith says, 

 

Invisible hands don't trample.

 

One should not try to make it through life without reading Adam Smith's history-making book on free enterprise - The Wealth of Nations - which can be found here.  It came out in 1776, and not by accident.  He was in constant contact with the Founding Fathers, and particularly one Thomas Jefferson.  A great Adam Smith biography is here. 

Free Enterprise Is The Model For Economic Perfection

"Take care of your body with steadfast fidelity.  The soul must see through these eyes alone, and if they are dim, the whole world is clouded."

Johann Wolfgang von Goethe (1749 - 1832)

Pick your analogy:  an economy is like a human body.  It is like an engine.  It is like an ecosystem.

An economy is an interactive, vibrant, bustling thing, with trillions of parts, with each part having its own place and function.  Or at least it should be.

Any economy could very much be compared to the human body.  And like most things, garbage in, garbage out.  The body must be fed.  Physically fed, mentally fed, spiritually fed, emotionally fed, socially fed - you name it.  The body is vibrant, and complex.  What goes into its creation and maintenance should very much be the best that can be provided.

Free enterprise is the kind of engine that is well suited to provide the best and most complex energy and sustenance for the body of any economy.  Economic activity requires vibrancy, and the best place for diverse vibrancy is a free-market influence.

Carnegie said that while it may be tough on the individual, the competition found in a free enterprise economy is best for the whole (which he called "the race") because "it insures the survival of the fittest in every department."

And so it is with any body, or engine, or ecosystem, or whatever is complex and interactive.

Leonardo da Vinci had some suggestions on how to best maintain the human body.  He was an accomplished chef, mostly vegetarian, and understood the importance of good food toward the maintenance of the human body.  Goethe said of him, "Handsome with a splendid physique, he seemed a model for human perfection."

Obviously da Vinci practiced what he preached.  He viewed illness as "the discord of elements infused into the living body."  In other words, garbage in, garbage out.

And so it should be with an economy - what goes in contributes greatly to what results.  Especially if it is allowed to operate freely, and with voluntary exchange.  Good in, good out.  Vibrant in, vibrant out.  Happiness in, happiness out.  Free enterprise in, free enterprise out.  And so forth.

Here are da Vinci's suggestions for healthy living.  Pay attention to how simple, and complete, this list is:

"To keep in health these rules apply:

• Beware of anger and avoid grievous moods.
• Rest your head and keep your mind cheerful.
• Be covered well at night.
• Exercise moderately.
• Shun wantonness and pay attention to diet.
• Eat only when you want, and sup light.
• Keep upright when you rise from the dining table.
• Do not be with the belly upward or the head lowered.
• Let your wine be mixed with water, take a little at a time, not between meals and not on an empty stomach.
• Eat simple (i.e. vegetarian) food.
• Chew well.
• Go to the toilet regularly!"

Applying this kind of wise simplicity to the health of an economy (and free enterprise provides that naturally), that economy will be, like da Vinci, a "model for [economic] perfection."

Free enterprise is the model for economic perfection.

Goethe is an interesting figure in world history.  We can learn from him by learning about him!  A good source of information about the person can be found here.  And, of course, no free enterprise article would be complete without the recommendation to read what may be the best book on voluntary, free exchange here.  Enjoy!

Free Enterprise Happens Because The Mental And Physical Happen

"Baseball is ninety nine percent mental.  The other half is physical."

Yogi Berra

The well-known baseball player and manager Yogi Berra was famous not only for his baseball prowess and history, but also his sayings.  He called them truths.  Others called them Yogiisms.

Sometimes paradoxical, and sometimes contradictory, they always seemed to get to the nub of what he was saying and as such became instantly understandable.

This one is no different.  It says it all.

And it can be applied to more than baseball.  It can be applied to business and free enterprise.  You have to give free enterprise effort - mental and physical.  Can they add up to more than one?

Maybe.  Sometimes the effort is more mental and sometimes it may be more physical.  But you have to give the effort.  And no matter what the effort is.

And in all phases - idea development, product or service development, implementation, market and market segment, delivery, product differentiation, whatever!  Certainly, it's ninety nine percent mental and the other half is physical.

This Yogiism might just as well be a free enterprise-ism as well.

Not paying attention to the mental or the physical will not usually lead to success in anything, be it baseball, or a free enterprise undertaking.  But that only states the obvious.

After all, how did people get to the stadiums and ball parks for baseball games.  Free enterprise brought them there!  From the subways, to buses and trains, to cars.  With hopes of souvenirs and food and drink.  And a venue with lights and loudspeakers.  And on an on.  Baseball happened along with the free enterprise that contributed to its happening.

Free enterprise is certainly ninety nine percent mental, with another half of physical and the rest thrown in.

Free enterprise happens because the mental and physical happen.

This may be the most revealing portrait of the man, Yogi Berra.  You can see it here.  An excellent children's book on Yogi can be read here.  It is very popular!

Free Enterprise Finds A Better Way

"Our greatest weakness lies in giving up.  The most certain way to succeed is always to try just one more time.  There's a way to do it better - find it."

Thomas Alva Edison (1847-1931)

Therein lies the crux of free enterprise.  Trying just one more time, and doing it better.

And this thought came from an individual who thrived on doing it better.

Thomas Edison had far more "inventions" and patents that were improvements of other inventions and patents than he did original inventions and patents.  He simply found a way to do it better.

He thrived on learning how "it" was not to be done, so he could find a way to do "it" period.

He thrived on the idea that "it" involved very little inspiration and a lot of perspiration.

Edison's version of creative destruction was through creative improvement and reinvention.  At his Menlo Park, New Jersey laboratory, he assembled an international team of engineers, a glass blower, mathematician, a Swiss clock maker, carpenters, machinists, business professionals and secretaries, and put together a small factory he referred to as his "invention factory."

And they worked, at creative destruction through creative redesign.

Not that they didn't invent new things!  They did!  His original design for the light bulb socket is still in use today.  And not many things have been more creatively destroyed and reinvented over the years than the light bulb.  He found a zillion ways NOT to do it, and then found the first real way to do it.  And things went from there.

This is the essence of what you get if free enterprise would be boiled down.  What would be left in the pot would be this idea of trying things one more time, and finally doing something better.

The freedom, and free market, to do so is the catalyst of what makes it happen.

Edison's good friend, Henry Ford, found the Menlo Park work to be so important that he had Edison's lab buildings reconstructed in Dearborn, Michigan, from drawings and with some of the original materials, so that people could see in museum form what it was in which so much new thought and rethought took place.

His thinking and rethinking of things began as a very young child.  His favorite word seems to have been, "Why?"  If people could not answer his questions, or if they did not know how something worked, he would ask why.  Most found this persistence to be arrogant and aggravating.

A teacher at his school lost patience with this persistent questioning pronounced him "addled."  Addled, or confused, was not something that pertained to Thomas Edison.  He was merely an investigator, and would today be diagnosed with some form of "special need,"  and prescribed some drug to "help" his condition.  Of course, he needed no such "help."

His mother, recognizing his frustration and the frustration of his teacher(s) withdrew Thomas from school.  Long before it was popular, and this is the 1850s, she began home schooling him.  Her technique?  Let Thomas investigate.  She taught him from the Bible, his father gave him a dime for every classic he completely read, and Thomas was allowed his passion during school - he loved to read and recite poetry, and study world history, English literature and Shakespeare. 

At 11 he was taught how to use the local library and he spent his days there.  His eventual interest in mathematics and science lead his parents to realize they would be unable to help him further and they hired a private tutor.  The tutor could really only encourage Thomas's voracious ability to analyze and investigate.

In addition to school he began working at age 12 selling newspapers and candy at a local commuter train station.  At 14, using news from the local teletype machine, he published his own weekly newspaper, selling it to a group of 300 devoted commuters who purchased it regularly.  It was the first known type-set publication sold to train commuters in the country.

Taught Morse Code, he soon became exceptionally competent at telegraphy.  In fact, at 16 years of age, his first invention was what he called the "automatic repeater," a device that could send transmissions from station to station and allowed others to more easily translate the Morse Code clicks at their own speed.   He never patented that first invention!

Edison's whole life was spent "finding a better way."  He epitomized the quote above.  He never failed to try things just one more time, and find a better way.  In that he epitomized free enterprise.

Free enterprise finds a better way.

One of the most popular biographies of Thomas Edison can be found here.  Children always benefit from reading biographies of famous people, and probably the best children's book on Edison is found here.  And always, probably the best book on Free Enterprise can be found here.  Everyone should read Milton Friedman.

Free Enterprise Is A Ferocious Jungle

“For myself, I always assume that a lion is ferocious, and so I am never caught off my guard.”

Edgar Rice Burroughs (1875-1950)

From the book Tarzan of the Apes

 Such is the life of an entrepreneur! 

Starting something, even from the ground floor, a new product, a new idea, a new service - is difficult at best.  And the entrepreneur must, indeed MUST, assume that there are lions out there.

And not just that there are lions, but that the lions that he will face are all ferocious.

And who or what are the lions?  An entrepreneur has to be a lion.  And a ferocious lion!  And the entrepreneur has to assume that the new thing being offered by his business will be accepted.  Why else go through all that it takes to bring something new to the fore?  And even if that new thing is indeed new, never before seen, there may be another entrepreneur (another lion) with the same thing.  Or, and this is a certainty, there are other lions out there ready to pounce on the first entrepreneur's good or service, and offer a similar thing. 

And the second new thing will be very similar, but different.  It will offer itself as bigger, better, more colorful, doing more things, more convenient, a second for free, free shipping, etc., than the first!

The free enterprise jungle is full of other lions!  And the first new good or service offered by the first lion, if received and in demand, will be pounced upon by other ferocious lions.  The first entrepreneur has to assume, as Tarzan knows, that they are ferocious! 

And free enterprise is beautiful and hideously ferocious at the same time - the second (or third or fourth) lion will find plenty of meat to eat!

This plots the course for the first entrepreneur.  There must not only be plans for the roll out of the first new thing, but plans in advance for another roll out of an improved version.  If not that, then at least the first entrepreneur must have the ability built in to up the ante with faster this, more colorful that, or free this or that.

One new product out in recent years offers home repairs in a can.  You merely spray the magical stuff on whatever the surface and magically it is repaired - no more leaking, no more exposure to damage - and the repair even magically disappears!  The repaired whatever looks like new!  At least on TV.

Since the roll out of the first magic in a can, not only are there more colors of the original product, but different kinds - a caulk and a putty in addition to the spray.  And all of the new products are just as magical as the first!  And also come with the free this or that, and if you call by a certain time you might, maybe, hopefully, wonderfully qualify for a second ABSOLUTELY FREE!  But call now!

The lions pounced on the first product with their similar offerings.  And they have been ferocious!  And to keep up, these second and third and fourth lions must also offer the add-on products that are just as magical and wonderful as the first lion's offerings.  It is a virtual tornado of ads and offerings.

There is ferocity all over the jungle!  And the lions all appear to be fed well.

Free Enterprise Is A Ferocious Jungle.

There are some great books about how to compete in this ferocious jungle.  The book here has been on the market for a long time, and in its 12th printing.  It has influenced competitive advantage for businesses and even nations.  You can get a book here that identifies how cooperation is necessary for free enterprise to work, even in a jungle.

Free Enterprise Avoids The Tar-Baby.

“One day after Brer Rabbit had fooled him with a calamus root Brer Fox went to work and got some tar. He mixed it with turpentine, and fixed up a little doll that he called a Tar-Baby.   He put a straw hat on the Tar-Baby and sat her in the middle of the road, then hid in the bushes to see what would happen.
He didn’t have to wait long either, because Brer Rabbit soon came pacing down the road as saucy as a jay-bird. Brer Fox, he lay low.
Brer Rabbit come prancing along until he spotted the Tar-Baby. The Tar Baby, she sat there and Brer Fox lay low.
“Good morning,” said Brer Rabbit, “Nice weather we’re having.”
The Tar-Baby said nothing. Brer Fox laid low and grinned an evil grin.
Brer Rabbit tried again. “And how are you feeling this fine day?”
Brer Fox winked his eye slowly and laid low in the bushes, and the Tar Baby, well, she said nothing.
“How are you then? Are you deaf?” said Brer Rabbit. “If you are, I can shout louder.”
Tar-Baby stayed still, and Brer Fox, he lay low.
“You’re stuck up, that’s what you are,” said Brer Rabbit, “I’ll cure you, that’s what I’ll do.”  But Tar-Baby said nothing.
“I’m going to teach you how to talk respectable to people," said Brer Rabbit. ‘If you don’t take off that hat, I’m going to beat you up”.
Tar-Baby stayed still, and Brer Fox, he lay low.
Brer Rabbit keep on asking, and the Tar-Baby kept on saying nothing.
Presently, Brer Rabbit drew back his fist and hit the Tar-Baby on the side of the head. His fist stuck and he couldn’t get loose. The tar held him. But Tar-Baby, she stayed still, and Brer Fox, he lay low.
“If you don’t let me go, I’ll hit you again,” said Brer Rabbit, and with that he swiped again with the other hand, and that stuck. Tar-Baby said nothing and Brer Fox, he lay low.
“Let me go, or I’ll kick the stuffing out of you,” said Brer Rabbit, but Tar-Baby said nothing. She just hung on, and Brer Rabbit lost the use of his feet in the same way. Brer Fox, he lay low.
Then Brer Rabbit yelled out that if the Tar-Baby didn’t turn him loose he’d head butt her side-on. So he butted, and his head got stuck. Then Brer Fox sauntered out, looking as innocent as could be.
“Hiya, Brer Rabbit,” said Brer Fox. “You look sort of stuck up this morning,” and then he rolled on the ground, and laughed and laughed until he could laugh no more. “You’ll have to have dinner with me this time, Brer Rabbit. I’ve got some calamus root, and I won’t take any excuses.”

Joel Chandler Harris (1848-1908)

A rewrite of the Tar-Baby story, as told by Uncle Remus.

This is one of many metaphorical stories written by American folklorist Harris.  He wrote of his period, social circumstances, and many of his stories were very parable like.  As an teenaged apprentice on a Georgia plantation he learned many of the oral traditions of the African slaves he worked with.  And he recorded them and introduced them to American society with his books.

Are there things in this particular story for our era?  Do we have Tar-Babies in our midst?  What are some of the things our society has for us that might get us stuck?  How about:

1.  Entertainment?  Ask kids these days pop-culture questions or questions about things of import to us as citizens and which are they more informed after?  Try that with many adults!  What about video games and music?  How much time is spent honing one's ability through involvement there?  So many are stuck in that Tar-Baby!
2.  Cell phones?  Go anywhere, what are people doing as they are walking or standing or DRIVING!?  I go to the grocery store or a restaurant or stand in line anywhere and many are buried in their phones.  I drive down the road and other drivers are texting!  Wonderful...  So many are stuck in that Tar-baby!
3.  Lobsters?  Put a bunch of lobsters in a big bucket and if one tries to get out what do the others do?  They reach up to pull him down!  None can escape the others!  People can be like that.  "Geeks" are expected to try in school but pay for it socially.  But what of those others, not thought to be "geeky," who want to do well also?  How are they treated by the lobsters?  When some in certain groups want to do well in society and "succumb" to "the man," they are berated and name-calling results!  By whom?  The lobsters!  So many are stuck in that Tar-baby!
4.  The unmotivated and uninspired?  What generation hasn't had these?  But it seems so rife today among the young set.  Personal direction, if present at all, sometimes has tunnel vision with focus on fitting into some fringe aspect of society - gangs, clubbing, tattoos, weird jewelry, living forever in Mom's basement, and obtaining "free" entitlements.  And the trend toward legalizing "recreational" drugs isn't helping.  Using the word "recreation" to describe certain drugs is part of the lure!  There is benefit there?  So many are stuck in that Tar-baby!

Free enterprise participants can't get stuck in Tar-babies.  They have to be on the move!  They have to be a vibrant part of the system!  For society to advance via free enterprise, for the general standard of living to improve via free enterprise, and for the economy to expand from here forward as it did in past decades via free enterprise, the populace (especially the rising generation) has to be educated, focused, goal-driven, moral and motivated!  There is no time for any Tar-baby that might be in the road along the way.  The enticing Tar-baby has to be avoided!

Free enterprise avoids the Tar-baby.

 

Free Enterprise Has Its Own Spirit And Energy

"...no people in the world have made such rapid progress in trade and manufactures as the Americans.  In the United States the greatest undertakings and speculations are executed without difficulty, because the whole population are engaged in productive industry, and because the poorest as well as the most opulent members of the commonwealth are ready to combine their efforts for these purposes.  But what most astonishes me in the United States is not so much the marvelous grandeur of some undertakings as the innumerable multitude of small ones. Almost all the farmers of the United States combine some trade with agriculture.  The Americans make immense progress in productive industry, because they all devote themselves to it at once; and for this same reason they are exposed to unexpected and formidable embarrassments. As they are all engaged in commerce, their commercial affairs are affected by such various and complex causes that it is impossible to foresee what difficulties may arise."

Alexis de Tocqueville (1805-1859)
from Democracy in America, Book II, Chapter 19

Tocqueville was a classical liberal, the equivalent of today's political conservative.  He was sent by the French government to the United States in 1831 to study the prison system.  He spent two years, spending very little time doing that, and most of his time traveling the country and examining what made Americans, and their unique form of democratic exceptionalism, tick.

His book, Democracy in America, was the result of those travels, and was published in 1835.  I got it downloaded to my Kindle for free!  It is a GOOD read!

He saw Americans as basically agricultural, but with a free enterprise spirit and energy unrivaled in his European travels and experience.  Everyone was busy doing something!  Everyone was finding a niche, and pursuing it.  America, in his view and experience, was composed of "an innumerable multitude of small" businesses.  Its people were indeed pursuing happiness.  He was seeing private property rights at their best.  Americans were increasing in value, and passing that value along to the next generation.

Isn't that true today? 

The United States Constitution set up the perfect venue for the natural development of free enterprise.  Such freedoms, expressed as God-given and natural rights, were never before pursued so universally by a people.  This is the essence of the "rugged individualism" and "American exceptionalism" that we hear of today.  Such exceptionalism is NOT  that Americans are somehow uniquely exceptional.  Quite the contrary.  We are as ordinary as anyone else.  But when given the freedom to pursue unique talents and become unique individuals, and expressing ourselves via legally PROTECTED natural rights to do so, the nation flourished and became rich as its individual components, i.e.(id est, or "that is") its people, flourished and became rich.  The ordinary can indeed do extra-ordinary things.  This so-called political and economic "experiment" was TRULY EXCEPTIONAL.

SUCH EXCEPTIONALISM 

WAS THE TRUE GENIUS OF THE

 FOUNDING FATHERS!

Free enterprise folds naturally into this arena.  It is the mother's milk of individual freedoms and the pursuit of happiness.  It is, along with our other protected rights and freedoms, what makes this country tick.

FREE ENTERPRISE HAS ITS OWN

SPIRIT AND ENERGY.