Adam Smith is turning over in his grave. The author of The Wealth of Nations would cringe at witnessing the freest nation on earth frivolously tossing aside one of the pillars of that freedom, the free market. Such drivel and ignorance of economics issues forth from the gaping jaws of politicians of both parties that it is a wonder we have not simply changed the name of our nation to the Democratic People’s Republic of the United States.
But perhaps in a few years.
The basics of economics are simple. They are based upon human nature. A man naturally seeks ways to better himself and his progeny. Using his natural talents he creates wealth. He invests this wealth, providing capital for other wealth creators. Income levels rise, productivity increases, markets expand to seek other outlets for investment.
You know the formula. It works whenever it is tried.
The problem is government. It creates nothing but lives parasitically off the wealth created by the market. It can do nothing other than destroy this wealth—war is just one example—or move this wealth around—this is what our ‘progressive’ taxation does—or waste this wealth—think of the pyramids at Giza or the National Endowment for the Arts.
Markets involve freely made decisions of free men thinking wholly and solely for their self-interest. They are chaotic—think about the billion or so economic decisions made every day in the US—and anarchic—they are under the control of no one.
The market sees the role of government as nothing more exotic than as an enforcer. Its role is to keep the seas clear of pirates and the streets clear of outlaws. That is it.
If the matter were left there all would be well. But the matter is certainly not left there. All government is inherently expansionary and has been since Sumer. The reason for this is due to its being the sole possessor of force in any society—that is, almost any society. But more of this in due course.
Those possessed of force tend to see those without it as sheep to be sheared. History shows this is perfect clarity—from the Roman and his ‘tax farmers’ to the shogun and his bully-boy samurai to the Medieval king and his rude barons to George III and his colonial agents. Wherever there was wealth you would find government sniffing around and laying claim to part—or all—of it.
Thus have markets been at the mercy of governmental whims.
The boys who created this Republic certainly knew their history. Their grand idea was to split the powers of the State into competing chunks and to severely limit the powers of each part. In this way the market would be out of range of the State—what we call laissez-faire.
And it worked for a while. But what happened to Athens happened to the Americans. As soon as one group of citizens found that it could use the legislature to seize some of the wealth of other citizens, the game was up. It was a simple thing then as now to find politicians promising to do this—such creatures are called ‘populists’ though in Greek times they were called ‘demagogues.’
First was the income tax, then the New Deal, then the Great Society, each one giving government more control over the free market. These days it has become perfectly natural and expected that politicians and parties would rise to power by promising new government programs—health care being just the latest fad.
The market being the only source of wealth creation and the State’s sole source of income, every new program meant less wealth available to the market—that is, to the people. And every new program meant a larger state with a greater need for income to pay its noisome minions who carry out its dictates—we call this motley throng ‘bureaucrats.’
It makes no difference whether such programs are ‘popular’ with the people. What matters is that with every encroachment of the government into the economy the nation becomes less free. A people can vote themselves into servitude after all. This indisputable fact has gone unnoticed.
A nation where the government controls every aspect of the market is called ‘communist.’ And let us hear nothing about so-called ‘socialist’ nations. Socialism is simply a weaker from of communism—whose real name is, after all, ‘scientific socialism.’ The more that the government controls the market, the more communist that nation has become and the less free it has become.
To check on America’s regress from the freedoms she had in the 18th and 19th centuries to today, we need only read these headlines.
For Clinton, Government as Economic Prod
Hillary cares nothing of the free market, which she does not at all trust. She and creatures like her put their faith in the State.
Senator Hillary Rodham Clinton said that if she became president, the federal government would take a more active role in the economy to address what she called the excesses of the market and of the Bush administration…Mrs. Clinton put her emphasis on issues like inequality and the role of institutions like government, rather than market forces, in addressing them.
So there it is in plain English. And where does Hillary claim to derive such power? It exists nowhere in the Constitution. But that document has proved to be inadequate to deter the Clintons in the past.
Those who vote for such an economic program are voting themselves into servitude. Alas, these types might take the entire nation with them.
Except that the wily Madison placed something in the Constitution that, as a last resort, can prevent our nation from completely sliding into the tyranny of a government controlled economy. That something is the 2nd Amendment.
It is no accident that those who would seize the levers of the State to intervene in the economy are also those who despise that amendment. Indeed, the correlation is direct and easy to understand.
All tyrants throughout history have sought to disarm the people. The Clintons are no different.
10 Comments;
Mike,
I agree that the idea of a market economy has given way to more Soviet-style thinking:
http://hallofrecord.blogspot.com/2007/12/mandates-as-law.html
and here:
http://hallofrecord.blogspot.com/2007/11/what-happened-to-market-economy.html
People seem to believe that the government is more capable of making the billions of economic decisions that all individuals in a market make. Just put it in a computer model and get your answers.
Be careful who you allow to do the programming.
Dear Bruce:
I find nothing but problems when government sticks its snout into the activities of free men. One can say that the bureaucrat’s motives were pure or that they were wicked, but the results are the same: higher prices, lower quality and shortages somewhere along the line.
Would Toyota have created that car had not the US had CAFE standards? After all, on a ‘dust to dust’ economic analysis the Prius is more expensive than a Hummer.
You asked in your two excellent essays what happened to the free market. It is going the way of small government and liberty. One can say of Americans as was said about the Old Testament Jews: We have abandoned God and chose to do what was right in our own eyes. Or that we have tossed aside our birthright of liberty for the pottage of economic security.
We will end poorer, less free and more and more beholden to demagogic politicians who set class against class and race against race and gender against gender and the old against the young in order to secure power.
That is after all the party line of the Democrats.
Mike you asked”Would Toyota have created that car had not the US had CAFE standards?”.Yes, they would have. Japan imports 100% of their energy needs and has led the way in conservation because of it. It also long before pollution became an issue here in the US seen the correlation between pollution and health problems.It was a necessity for them to invent higher mpg and pollution controls.
I investigated a part of the mortgage crisis that you wont hear our drive by media discuss.Discrimination laws that have forced lending institutions into making loans that otherwise would have never been applied for. The FDIC has an example of age discrimination that says if a lending institution grants a loan to anyone 30 yrs. old or older then they must also offer that same loan to an 18 yr. old or be in violation of age discrimination.The kicker is if a lending institution is in violation of any discrimination law they can be denied merging with another lending institution,expanding by opening of a branch office or offices and can even be denied expanding office space in an existing building.The more I dug into the multitude of discrimination laws the more I wondered why lending institutions would want to do business in such a hostile country, but then if they didnt they would be sued for discrimination!!!
I must admit, I will never understand the worship of Jesus coupled with the worship of wealth. Baffling. Eye of the Needle anyone? Oh well. Truly, if anything is true it is I understand nothing. Here, here. Or should I say, he who has ears to hear… etc.
I believe it was Adam Smith who warned that it is the tendency of business people to put their thumb on the scale. Enron? Read on.
If we had nationalized health insurance:
Goldman Sachs could still give 5 billion in christmas bonuses-
CEO’s would still make 454 times their average employees salary-
Your bible tells you many times it is wrong to take from the poor to give to the rich. What a scam Uncle Sam. We are a welfare state that subsidizes the wealthy.
Read that last line again.
-Warren Buffet received a $100 million dollars of tax payer money,
-Donnie Trump gets $89 million in tax money collected as casino taxes to benefit
the poor- for retail space.
-Every owner of a major sports franchise gets 100% of their profits from subsides.
George Steinbrenner is receiving $600 million alone.
-Wall Mart collects sales tax. Do you think it goes to the government? It goes to
the owners of Wall Mart.
-CSX saved 2.4 billion dollars by skimping on safety. People died. CSX got sued.
Litigants received $50 million. Taxpayers paid the bill. Thank you, Mr. Snow.
-Credit card interest? You could save money by going through the mob. Hire the mob
to get rid of credit card companies.
The G.I bill, Social Security. Please Scip! We built the middle class.
How much money could you make that you have become the cheerleader to a gang rape?
Say no to class genocide.
“I hope we shall crush … in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.” from a more intelligent post of yours.
Jefferson was a guy who knew the true cost of your free(?) market.
P.s. I miss the red format.
Dear Mike W:
It is doubtful whether or not the Prius pollutes less over its lifespan—from the mining of the necessary minerals to the construction of its battery—than a normal car. There are pointy headed automobile economists who work on that sort of thing. One such study appears here.
Japan and Detroit both make automobile for domestic and export markets. Often car models meant for export are unsuitable for domestic buyers. The Prius could not earn money for Toyota unless it sold in the US no matter how many Japanese bought one.
One can safely say that the Prius is a ‘boutique’ car. It is meant not so much for savings in gas—it costs more to run over its lifespan than most cars—but for the feelings it engenders in its owners. They get to feel and to demonstrate in public that they are ‘doing something for the environment.’ Never mind that the thing is more like a toy than what we Oklahomans call a real car. Truly in any dust up with my Jeep a Prius—and probably its owners—would be totaled. All of them would be returned to the earth.
Nice work on the mortgage ‘crisis.’ I always had my doubts, and knew that the government had forced some lending institutions to lend money to questionable folks—more government involvement in the economy, to the detriment of both banks and lenders.
Dear Skraeling:
Greetings. I miss the old theme format as well. I will install it as soon as I learn to use an ftp file manager to do so. Since moving to a new host I can no longer use the yahoo file manager.
One cannot worship both wealth—Mammon—and Jesus. One chooses. Being wealthy however does not equate with worship of that wealth. The greatest heroes of the Old Testament—David for one, who was beloved by God and from whom came Jesus and about whom more words were written in the Bible than anyone else save the Lord—was one rich guy. As were Solomon, Noah, Abraham and many others. Joseph of the coat of many colors owned more than half of the earth, bless him!
One should quote Matthew 19: 23-26 in completely:
Yes, with God all things are possible—even for me to be saved.
Evil men spread evil whether they are rich or poor or whether they control great companies or not. Enron was the bête noir of the left, though most people were untouched by its scandal. How many people died from the depredations of Enron, by the way? Now over the lifetime of Enron how many died from the depredations of governments?
I have no qualm against your claim about the US government ‘subsidizing the wealthy.’ It is correct, but only partially and without meaning. It is more correct to say that it subsidizes the middle class—many more votes there than the wealthy classes—and such largesse cannot be kept from the rich. No government can simply make one class wealthy unless that government controls all the capital goods in that country—Cuba for one.
The talent to create wealth is like any other talent—carpentry, violin, writing. No one in government has such a skill. The talent of governments throughout history have been to sniff out wealth and confiscate it. But the wealthy are clever sorts—far, far more clever than any tax man—and have learned to protect their wealth. Thus, campaign ‘donations,’ tax breaks, charitable contributions and so on.
We need to recall that every legislator, governor and Supreme Court judge is a millionaire. I find it charming that the left finds heroes in such flotsam rather than among the private sector. Question: Who has done more for the nation, Ted Kennedy and the Clintons or Wal-Mart?
By the way, the wealthiest men in the US government are all Democrats.
The American middle class was healthy even during the French and Indian War. To claim that it came into being because of government programs after WW II is absurd. It was the government caused Great Depression that went far to destroy it.
Business exists to sell stuff. People can either buy this stuff or not. If not, then business either fails or adjusts prices accordingly. It is all based upon free association among free people. Nobody stands out in front of McDonalds with a shotgun forcing people to buy hamburgers. But try not paying for Social Security. You will end up in jail, your property confiscated and your family destroyed.
So which is predacious, the free market or government?
The left both domestic and foreign have never understood wealth creation or its place in a free nation. It always sees concentration of wealth as evil—though it never sees the concentration of power that way. All the great murderous regimes of the last 100 years have been leftist ones—from Lenin to Hitler to Mussolini to Mao to Castro. All these regimes seized private wealth and built very public gulags. Together they have murdered 140,00,00 pieces of humanity.
Now, tell me again how many Enron killed? McDonalds? Wal-Mart? How many businesses start wars? How many businesses confiscate property?
There is no such thing as ‘class genocide.’ The term ‘genocide’ applies only to men. The use the word in combination with the word ‘class’ demeans, weakens and lessens the value of the terribly real genocides that have occurred since the term was conjured up.
One should avoid the abuse of language. Besides ‘class genocide’ your use of ‘gang rape’ is highly inappropriate to make some political point. You might ask a woman who has been gang raped if she approves of your use of that term.
But then the left always has abused language. Orwell saw this technique clearly. Thus our dear Bill called taxes ‘contributions.’ Thus the left refers to infanticide as ‘choice.’
Jefferson was speaking not of the free market but of government, specifically the Bank of the US as formed by Hamilton. He favored state governments over the federal one, which is exactly the opposite of today’s Democrat Party. He trusted the people to rule themselves, again wholly unlike the Democrats of today.
The Democrat Party—just like the international left—is the party of government, of wealth confiscation, of class, gender and race warfare. It wants Americans to be as beholden to government as Monica was to Bill—and in the same position performing the same activity.
I apologize for the absurd length of these comments.
“I have no qualm against your claim about the US government ‘subsidizing the wealthy.’ It is correct, but only partially and without meaning. It is more correct to say that it subsidizes the middle class—many more votes there than the wealthy classes—and such largesse cannot be kept from the rich. No government can simply make one class wealthy unless that government controls all the capital goods in that country—Cuba for one.”
I have given you specific examples.
“The talent to create wealth is like any other talent—carpentry, violin, writing. No one in government has such a skill.”
Government is the problem. Here we agree. But government makes the rules that tax the middle and lower to erich the upper class. But they also have talent: NASA, Human Genome, Post Office. The Post Office does in three days what UPS does in a year. You will think I advocate government to do everything. No. And Heck NO!
But I repeat, my problem is also with the government.
“Who has done more for the nation, Ted Kennedy and the Clintons or Wal-Mart?”
I cant stand ted or bill. Wall Mart is subsidized to eradicate the small fries and to promote Chinese exports. When you can buy shoes for $20 it is ok to have a nation without a manufacturing base. Remember the part about the sales tax I mentioned?
Everything I site is not the fault of business. It’s all legal. They follow the rules made by government. Thats what amazes me. You and I can vote all we want. Ha. Your ‘left’ is only a wing of a corporate party.
Bridges fall, trains crash. Except we cant tax to fix the roads only to protect the wealth from those darn trial lawyers. We pay for the lawsuits.
What exactly was ‘left’ about slavery and genocide on this continent? Land and labor, Manifest Destiny and opportunity. Don’t mind the corpses keep moving.Certainly the government, certainly the Christians, private sector and all are responsible. Yes. The very people who stopped it. Damage done. Thanks. And F.D.R. destoyed Hitler, Mussolini and the Emperor of Japan. How many people did social security kill? The G.I. bill? The Marshall Plan? (darn freeloading, godless Europeans)
Why is absolutely everything about abortion the clintons or your guns?
Abortion is murder. What is your plan for the murderers: the women, the doctors, the nurses, the receptionists, the husbands, the boyfriends, the girlfriends? Don’t say God will take care of them. Murder is to be punished by men. If not, then you’re on the list. Things were easier when women were livestock.
Ah, the clintons. You just cant get over the bill stain. Like we can expect more from a politician. Dont worry, hillary will be pres and nothing I mentioned will change. Seems we cant stand either party. The one party. The party no one we know is invited to.
And of my use of language I have used heck and darn. Though I ended a sentence with a preposition moments ago. And what I said previously affected no one who experienced either atrocity, though it did sound like that leftist, Ann Coulter. Rush, too, has a colorful way of making political points- mocking handicap children for one.
Dear Skraeling:
No need to apologize for the length of your commentaries. I much enjoy reading and responding to them. Doing so sharpens my mind and makes me a better writer and teacher.
Your views are more than a little conspiratorial. Voting is a sham, the rich shake down the poor, corporations are evil and in league with government—which is also evil—and so on. Such a mentality is Manichean. One wonders how anyone with such an outlook finds anything to please him in the give and take of politics and affairs.
Your examples about how government supposedly enriches the already rich at the expense of the poor assume culpability and intent on the part of the government. Such is not the case. All falls under the Law of Unintended Consequences.
It is impossible for any tax system to just benefit one group at the expanse of another unless the government controls all the means of production. You rail against Buffet getting some tax break yet you fail to identify the method by which his taxes were lowered—that is, what was the full effect of this tax law upon the US and every class of folks in it?
Your logical fallacy goes something like this:
It is typical and tiresome to wail about how ‘the rich get richer and the poor get poorer’ but then boast about how government actually created the middle class after WW II. One cannot have it both ways.
You do not like corporations. You do not like government. You do not like the tax system. What is on your ‘like’ list, Skraeling? Is there any government in history with which you find favor? If not then your problem is with human nature, and I cannot help you there.
You ask why ‘why is absolutely everything about abortion [sic] the clintons [sic] or your guns?’ Well, never mind the truth of your statement, this is my blog and I write what I wish. I do not like abortion, so I write about why I do not like it. Same with the Clintons. I like my guns and I write why I like them. I also like my commenters and so spend much time reading them and responding to them. Skraeling, take a guess how long it takes to respond to you?
Please provide evidence for your claim that ‘Rush, too, has a colorful way of making political points- mocking handicap children for one.’ I have been listening to Rush for 19 years and have never heard anything of the sort. True, the media slanders him all the time but that is to be expected. So on what day did Rush ‘mock handicapped children’? Take your time researching this.
Being outraged at both parties does not mean that I do not prefer one to the other. I would rather be forced to eat a plateful of feces than a gallon of it. Of course, one can simply refuse to participate in affairs and just sit to the side and wail and gnash teeth. Properly done, this is a philosophically supportable and logical position. One does not participate in a political regime one considers illegitimate.
I am not there. Yet.
Dear Scipio,
Good evening. Hope it was not a plateful a feces tonight. It is the week end after all. I had rigatoni. Delightful
Now, I believe I have been clear and am not making the childish argument you just outlined. More surprisingly, you, as a conservative, are not concerned with the redistribution of wealth? Our tax money used to make wealthy people wealthier? Not start ups but gazillion dollar corporations. Lawsuits being paid not by companies at fault but with taxpayer money?
Your carpenters materials are paid for by taxpayers. The roof falls in and kills children. The carpenters are sued and tax payer money pays the settlement. (?) No fallacy. No kidding. No Indian chiefs. Though, I am reading a biography of Crazy Horse. You think I have problems with the government? Nothing compared to that guy. Not Yet.
Back to my point. This doesn’t seem like a right left issue to me. As a matter of fact, let me quote from my pal,
“Those who vote for such an economic program are voting themselves into servitude. Alas, these types might take the entire nation with them.”
And I do not hate either government or corporations. They are part of my world. They do certain things well, some things not so well, and sometimes they piss me off. How can you be against entitlement spending and defend this?This is the worst kind of entitlement spending.
Law of unintended consequences? Then going forward, perhaps the nation can deal with a few of these issues. Does it seem I’m wailing about the poor poor saints and the wealthy demons? You know I’m not. It seems you ignore any substance and stick to an ideological script.
-Graeme Frost. Family of six . $45,000 a year. No insurance from employers. Cost of insurance, $1200 a month. Impossible. Car accident results in brain damage in Graeme and his sister.. Families qualify for s-chip care.
I seem to remember Rush mocking the way Graeme speaks due to his disability. But I think Rush probably thought that when children need medical care, they just shouldn’t get it if the free market doesn’t provide.
I assume it takes you but a moment to respond to me. I do spend a chunk of time composing my blather. I am not a writer nor teacher. But I shall participate. And it is your blog. Blog on.
Dear Skraeling:
Greetings. For once here in Oklahoma City it is not freezing outside. Perhaps that is because I just returned from weekly Confession. Or perhaps it is because I have a glass of Cabernet in my hand. Whatever.
I ate feces for years thinking it was filet mignon. I no longer have that trouble. Christ took care of that.
I am not concerned at all with the distribution of wealth. Wealth accrues generally to those talented in acquiring it. I am also not concerned with the distribution of musical talent or writing talent or carpentry talent. Concentrations of wealth happen not in free markets, but when government intervenes in them. If it is as you say, that the tax system is unfair—and I despise it—then do away with the tax system.
Our tax system is progressive and does much to hamper economic liberty and to create little—and not so little—fiefdoms that are government coddled and subsidized. So-called ‘higher education’ is one such. Public transport is another.
Yeah, Crazy Horse had a few issues with the government. His progeny gets even through rapacious casinos that prey upon the natural cupidity of the White Man.
I am against all entitlement spending. The problem comes from how you, Skraeling, define it—rather widely I think. Tax breaks are not such.
Anyone can make a case for all kinds of government spending because of someone’s misfortune—the Graeme case being only one. If those who used his family to make a case for seizing private wealth to benefit Graeme simply contributed their own cash the problem would disappear.
That is a salient point, one hammered home with a boring and mind-numbing precision by Ayn Rand. We do not need government social programs, neither for the homeless or needy or hungry or diseased. If one really cared for the homeless, for example, then that person can take a homeless wretch into his home. Odd, I see no Hollywood types—you know, those prattlers who yammer on and on about this or that—taking any homeless people into their homes.
‘Sticking to an ideological script’ is most definitely what I do—smart fellow you are for seeing this. If one is building a bridge one sticks with the blueprint. To deviate means no bridge at all or one that collapses. My script comes from the Bible, the founding documents of this nation and the Catechism of the Catholic Church. If something disagrees with these that something is wrong.
When one turns to the most influential theologians, teachers and philosophers one sees exactly the same thing. Jesus also had a script—and Socrates, Aristotle, Buddha, Augustine, Descartes and all the rest.
Worked for them, yes? Works for me too.
Ah yes, the old canard about someone ‘needing medical care.’ The assumption is always that government should step in to provide this ‘need.’ Please provide me one time that someone was refused needed medical care in this nation. Take your time in doing this research.
What the free market does not provide is what it was never meant to provide—military power, safe streets, fire departments and so on. So often the market is castigated for things far outside of its purview.
I spend about 30-45 minutes responding to your blather. I imagine you spend similarly responding to mine.
True, you may not be a teacher by trade or profession, but consider if you taught at a school where I taught. The students would benefit handsomely from the give and take of our dialogue.
At any rate it is as I have written, that responding to your missives makes me a better teacher and writer—and more logical at that.