Destroying Market Mechanisms

"The welfare state destroys the market mechanisms -- it lessens free choice and willing exchange. Simultaneously creating unnatural specializations, it must, granted statism's premise, resort to welfarism; that is, it must assume the responsibility for the people's welfare: their employment, their old age, their income, and the like. As this is done, man loses his wholeness; he is dispossessed of responsibility for self, the very essence of manhood. The more dependent he becomes, the less dependable!"

Leonard E. Read (1898-1983)

Never heard of Dr. Read? Then you have probably not heard of I, Pencil. This is a fabulous, and very short, pamphlet explaining that NOBODY knows how to make a pencil. I, Pencil is written in the first person from the point of view of an Eberhard Faber pencil. The pencil details the complexity of its own creation, listing its components (cedar, lacquer, graphite, ferrule, factice, pumice, wax, glue) and the numerous people involved, down to the sweeper in the factory and the lighthouse keeper guiding the shipment into port. From the book:

"There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work."

"Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree"

"The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed"

Genius leaves the market alone. Dopes think they can manipulate it toward political ends.

Equalizing Incomes

"One of the worst features of all the plans for sharing the wealth and equalizing or guaranteeing incomes is that they, the ruling class, lose sight of the conditions and institutions that are necessary to create wealth and income in the first place."

Henry Hazlitt (1894-1993)

Prescient? Yes, because it is correct principle. Written in 1946, Dr. Hazlitt was well ahead of our current economic world. The redistribution of wealth, if even possible, is NOT a value that made the United States a great nation. Creating an entitlement society (and mentality) is NOT a value that made the United States a great nation. Federal control and income confiscation is NOT a value that made the United States a great nation. Central planning of economic markets is NOT a value that made the United States a great nation. I could go on and on. If you find any of that in any of the writings of the Founding Fathers, I will eat the pages in front of you.

Can talents be equalized? How about skills and abilities? How can desires and dreams which create drive and determination be equalized? Or the desire to learn and be educated and think for oneself? Well of course none of that can be. And therefore there will always be those who excel, and NOT at the expense of those who choose, yes choose, to lack behind. They would excel because of who they are.

If the gubment mandated tomorrow that all the wealth* in the U.S. be redistributed equally among its citizenry, each would choose a different path with what to do with that gift. Some would squander it on nonsense. Some would spend it to benefit others. Some would try to acquire "stuff" and immediate comfort. And some would invest it in ways that created more income and a secure future. A zillion paths for that redistributed wealth would be followed. And in short order, perhaps shorter than most would think, the same wealth disparities would exist as the cream rose to the top and the dregs sank back to the bottom. Anyone who thinks wealth can be redistributed as an economic policy is a dope.

* Those whose wealth was inherited (or acquired through marriage) would have NO idea how to go about creating the wealth that was given to them. Name your favorite trust-fund family. And their entitlement mentality would not get them very far... They would be the loudest squawkers about the "inequalities and unfairness" of the system!

Public Monopoly

"There is far more danger in public than in private monopoly, for when government goes into business it can always shift its losses to the taxpayer."

Thomas Edison (1847-1931)

That was said in the early 1900's when the public (read that government, or my word "gubment") was not so much involved in taking over business as it is today!

When gubment takes over the auto industry, or banking, or school loans, or mortgages, or investment banking, or "health" care, or WHATEVER the business, it is ALWAYS on the backs of the taxpayers.

Gubment produces nothing! It earns interest on nothing. It grows nothing. Anything, that is anything, it derives in any fashion, is from the taxpayers from whom it must take the money.

Loss is the common measure of gubment control of anything. Its loss, however, as Mr. Edison suggests, is hidden in fiscal policy. And in the end it doesn't work.

Who learned that lesson the hard way? One of the biggest BIG government people in history. The most notable fascist of all - Adoph Hitler.

P.s. Conservatives are NEVER fascists, in any regard. And those who throw that charge around are basically and fundamentally uninformed. As usual...

Giving Back

"Recipients of transfers tend to become less self-reliant and more dependent on government payments. When people can get support without exercising their own abilities to discover and respond to opportunities for earning income, those abilities atrophy. People forget - or never learn in the first place - how to help themselves, and eventually some of them simply accept their helplessness."

Robert Higgs

Necessarily, when any gubment moves to "redistribute wealth," it must take that wealth from someone who earned it and give it to someone who did not. In fact, there are those who feel entitled to other people's labor and wealth!

But what happens when wealth is so taken and so received? Those with gumption, and drive, and talent, and ability, will earn back (not take) what they had earned in the first place!* Why is that? Because they are who they are!

And those who take and wait to receive are who they are! Or have become who they have been encouraged to become... This is not a value that founded this country and made it so great and so strong.

Can such things as initiative and desire and dreams be distributed, or redistributed, equally? No.

Does this sound harsh? Is redistribution a correct or an incorrect principle? Read the Parable of the Talents! To do that you would have to look in Matthew 25 or Luke 19. But trust me, the principle is there. It might surprise you!

* These are they who are asked to "give back" to society! I disagree. They are giving! Those who should give back are the robbers and thieves, the predators, committers of fraud, the liars and general scum, those with disregard for others and their property - the law breakers! - they, THEY, are the ones who should give back. THAT is redistribution I can live with... What's that parable say again?

Individuality

"Individuality is the aim of political liberty. By leaving the citizen as much freedom of action and of being as comports with order and the rights of others, the institutions render him truly a freeman. He is left to pursue his means of happiness in his own manner."

James Fenimore Cooper (1789-1851)

One of the most important values that built this country is rugged individualism. This is something that is almost forgotten in today's entitlement society, where "gubment" (read that some other hard-working citizen) is expected to take care of another's individual needs. This entitlement is viewed by some as a "right!" Not that they can define that word...

The very purpose of the U.S. Constitution is to define and restrict the powers of government over the individual. And to allow the free exercise of rights that it maintains and we believe to be divinely endowed by God.

Interfering With Rights

"I believe that every individual is naturally entitled to do as he pleases with himself and the fruits of his labor, so far as it in no way interferes with any other men's rights."

Abraham Lincoln (1809-1865)

I hear the word "right" from people who probably can't even define it. "I have the right" to do this or that. So much of what I hear is claptrap.

In this country, we believe our rights to be endowments from God, and unalienable, which means that they can't be separated and we can't pick and choose which to protect and not to. It seems to me that God is a fairly permanent fixture and a right endowed in 1776 (or 1789 when the U.S. Constitution was ratified) would still be a right today, despite some radical (read that enlightened) court definition.

True rights don't come and go. Remember the "right" to own other people? Or to be "separate but equal?" Or the "right" to be bussed to school? All those things, and more, were enlightened court definitions! But NOT rights! How come those aren't "rights" anymore?

I think that a right is something that I enjoy simultaneously with others, and my enjoyment thereof costs nobody else. My right to enjoy freedom of speech or assembly does not remove or cost anyone else's right to do so, or to have to provide for me.

The "right" to health insurance, or housing, or pharmaceuticals, or whatever other pet political trend, cannot be extended to everyone unless the money to extend that "right" to some people comes directly from other people! One person's enjoyment costs another! That's not a God-given endowment, it is a welfare program. And not a very-well administered "right" at that!

TRUE RIGHTS DON'T HAVE TO BE ADMINISTERED! Just ask Mr. Lincoln!

Serving Others

"Under capitalism everybody provides for their own needs by serving others."

Ludwig von Mises (1881-1973)

Ever consider that? That as business people we are in the business of serving others? That is the very essence of capitalism, and a definition you will never hear from those who deride it.

Capitalism is not a system of thievery, control, or monopolistic competition. It is a system where we serve our own interests by better serving the needs of other people.

That is why Adam Smith, in "The Wealth of Nations," could confidently state that the butcher, baker and beer maker do not wish to provide us our dinner for any reason other than self interest. They wish to produce the best products so that we will come back for purchase time and again. And as we do, their profits increase and they further themselves in society.

Any economic system other than that will necessarily collapse under its own weight. It hasn't worked anywhere for very long because it can't.