Archive for the ‘Austrian Economics’ Category

Economics, First Lesson: What’s mine is mine.

August 22, 2010

Is it not lawful for me to do what I will with mine own? (Matthew 20:15)

The first lesson of economics is not supply vs. demand, or the calculation of the M1 money supply, or the theory of equilibrium.

The FIRST lesson of economics is this: What’s Mine is Mine.

Here’s how it works:  Let’s say you and I agree that if I cut your grass, you’ll give me a chicken as payment.  So I cut your grass, and you give me a chicken. 

Question:  Who does that chicken now belong to? 

Answer:  Me.

Another question:  How much of the chicken belongs to me?

Answer:  All of it.

Do the feathers of the chicken belong to me?  Yes.  How about the beak?  Yes,  How about…well, you get it by now.

Now let’s say that instead of a chicken you agree to give me a check worth ten dollars if I cut your grass.  Having cut your grass, and having received the check for ten dollars from you, now how much of that ten dollars is mine?  Hint:  See the chicken story above.

You guessed it right if you said “All of it.”  YES!  Every single dollar of the ten dollars is mine, all mine, and no one else can have it!  I have earned exactly one thousand pennies, and they are all mine.

Okay Joel, you’ve made your point.  But have I?

We live in a society today that doesn’t seem to understand this basic principle, because there’s a group of highly armed and dangerous people that take my money by force every time I get paid.  And that group of people takes my money and divides it up among themselves and gives some of it to their friends. 

It’s sad but true – there are people that think they have an absolute right to my money.

But the fact is, my money is mine.  It doesn’t belong to the government.  The government has no rights to it.  It doesn’t belong to the poor.  The poor have no rights to it.  It doesn’t belong to my neighbor.  My neighbor has no rights to it.  It doesn’t belong to anyone but me. 

Government does not produce wealth, but is dependent on it, and takes away from it.  Government is non-productive overhead.  It may be necessary overhead, but the necessary aspect of government is a splinter of its current girth.

Nothing is more basic to certain unalienable rights than the right to what one earns.  This is the core of sound economy.  Unless America can ever get the genie back in the bottle, and repeal the sixteenth amendment, we will never have a sound economy and experience real individual freedom.

Advertisements

The Failure of Socialism in Buffalo NY

August 19, 2010

 If you don’t want to know what’s going on in the world, then click out of this web site and find something on the internet about Snooky.  It shouldn’t be hard.  But if you want your eyes opened to the cruelty of machine politics and the failure of socialist economics, then take the time to read James Ostrowski’s essay entitled What’s Wrong With Buffalo: A Rothbardian Analysis, which can be accessed on the Lew Rockwell website at http://www.lewrockwell.com/ostrowski/ostrowski99.1.html.

 Yes, it’s longer than what you’re probably used to reading on the internet, but I cannot recommend it too highly.  It takes political and economic theory and examines a real-world, specific case in the light of libertarian economic principles.  Libertarian economic principles are represented in its best and purest form in the “Austrian” school of economics.  We will be saying more about Austrian economics as Providence allows, but for now let’s start by offering a small excerpt.  But please read the whole essay as you have opportunity.

Let’s look in more detail at why socialism, or liberalism as we call it in the United States, is so popular. The reasons are not complicated. First, socialism allows people to spend other people’s money. Let’s avoid the word “steal” other people’s money, because only libertarians see it that way. Nevertheless, however socialists justify this spending, even they realize they are taking other people’s money. Yes, I know some socialists deny the very concept of private ownership. But even they realize that socialism takes money and property that is possessed by some and transfers possession to others so they can spend or use it.

Reason No. 1: Socialism allows people to spend other people’s money without feeling guilty about it.

Second, there is a related but distinct craving that animates socialism, as noted by many commentators. Envy is a strong emotion that has a powerful impact on society and politics. Envy is “a painful or resentful awareness of an advantage enjoyed by another joined with a desire to possess the same advantage.”  (Webster’s New Collegiate Dictionary). Because no one admits to acting on the basis of envy, the term “equality” – robbed of its original and legitimate meaning, equality of liberty – is used instead. Socialism is the perfect political expression of envious people as it purports to rein in “greedy” and wealthy capitalists and usher in social and economic equality. When socialists and liberals want to steal people’s money, they call the victims “greedy.”

Reason No. 2: Socialism satisfies the deeply-felt and widely-held emotion of envy.

Third, free market capitalism emphasizes the individual’s responsibility for his own economic welfare. Socialism professes to place this responsibility outside the individual and with the state. Many people are happy to be rid of this burden and glad to be able to blame others for their problems. Unlike Reasons No. 1 and No. 2, this reason for the popularity of socialism is one trumpeted by its proponents. They do not see the obvious downside of the structural reduction of individual economic responsibility: laziness, profligacy, passivity, and worst of all: boredom!  Life in the advanced welfare state is a big bore. Check your brain at the door; pick up your check on the way out.

Reason No. 3: Socialism purports to relieve people of the burden of worrying about their economic well-being.

Finally, in a secular age, socialism acts as a substitute for religion. Traditionally, religion would offer solace to people facing the numerous traumas of life. Now, for millions of people, socialism plays that role. “For who would bear [Hamlet’s] whips and scorns of time, the oppressor’s wrong, the proud man’s contumely, the pangs of despised love, the law’s delay, the insolence of office and the spurns that patient merit of the unworthy takes, when he” could overcome all these problems with socialism? 

Utopian socialism – all socialism is utopian – purports to offer a solution to virtually all human problems. In contrast, the claims of capitalism are seen as too modest, and hard work is required as well. There is no need to quote a Marxist on the all-encompassing promises of socialism. Lyndon Johnson will do fine. In an Orwellian speech given on May 22, 1964, President Johnson promised that his Great Society would “pursue the happiness of our people,” conquer “boredom and restlessness,” and satisfy the “desire for beauty” and the “hunger for community.”  All this and beat the Viet Cong, too. Amazing!

Reason No. 4: Socialism is a secular substitute for religion and offers people (false) solace against the traumas of this life.

These are some of the main reasons why socialism, in spite of its spectacular failure, remains so popular, even in a society such as ours whose fabulous wealth is the result of the shrinking capitalist remnants of the economy.