The Dreadful Equation

posted at 12:00 pm on April 25, 2010 by Doctor Zero

What is money? It’s a medium of exchange – you use it to make purchases.  To the average individual, money is also a means of cooperation. It transforms the value of your labor into a very efficient form of communication.

Suppose you’re a skilled chef who knows very little about carpentry.  You could spend many hours struggling to make a bookshelf, producing a rickety and unlovely piece of furniture.  It would be better to find a skilled carpenter and offer to trade your gourmet cooking for a well-constructed bookshelf.

Money makes this transaction vastly more efficient – you can choose from many different carpenters and compare their prices.  Great companies have formed to produce mass quantities of bookshelves, which is much more effective than hiring out individual carpenters to construct shelves on demand, resulting in much lower prices to the consumer.  You don’t have to spend time finding a carpenter you can trust, then waste more time haggling over the relative value of stuffed pheasant versus six feet of shelving.  The value of your cooking skill is converted into money, and so is the value of the bookshelf.  This is much better than bartering.  Money is a swift, versatile, and precise vehicle for cooperative effort.

What is value? It’s more than just the number on a price tag.  If you look around your home, you’ll find many objects with value that far exceeds their price: treasured heirlooms, gifts from your children, mass-produced artwork that you happen to like.  Value is subjective… which means, in essence, it’s a function of choice. Would you risk your life to gather all those little knickknacks and crayon sketches pinned to your refrigerator, if your house were about to be destroyed in an earthquake, and you had only moments to evacuate?  The situation would eliminate your choices in the matter, and the value of the items would diminish.

To put this in the context of current events, a comprehensive medical insurance plan with a high price tag would have great value to an older person, but much less value to a young person in the peak of health.  Even if the young person is forced to pay the high price for this coverage, its value to him does not increase.  Likewise, an insurance plan with extensive maternal benefits offers little value to a man.  People assign less value to something they were given, or forced to purchase.  Greater value is associated with goods and services they freely chose to acquire, and paid for with their own money.  Everyday life is filled with many examples which illustrate this point.

What is power? It is the ability to impose your will upon others.  Power requires compulsion, which can range from a mild set of incentives through absolute domination.  Your best friends might be willing to honor almost any of your requests, but you don’t really have power over them.  If you designed an elaborate plan for managing every aspect of their lives and finances, they would be unlikely to cooperate voluntarily.  You would have to force them to participate.

In a constitutional republic, our elected government is meant to be the exclusive concentration of legitimate power.  By definition, the amount of power exercised by the government increases as it grows larger.  Power is compulsion – fines, subsidies, regulations, and imprisonment.  More power means less freedom.  Reduced freedom means less value. As money is drained away from free citizens, their ability to cooperate voluntarily is reduced… and only voluntary cooperation produces genuine value.

This is the dreadful equation of socialism.  Money can be used to create value, or it can fuel the exercise of power, but not both.  You can see this happening around you, right now.  It has happened everywhere in the world, every time central planning has been tried.  It would happen even if politicians were the selfless, compassionate, disciplined civil servants they claim to be.  The fantastic corruption typical of socialist states, most definitely including our current Administration, serves to weaken the rate of exchange between value and power.  The high-performance fiber optic communication lines of free-market capitalism have been torn out, and converted into feeding tubes for our bloated central government.  Every dollar you pay the government in taxes and regulatory costs is another moment of your time that cannot be invested in willing cooperation with others.

It is possible to ration subsistence, but not prosperity.  Americans are slowly, painfully beginning to appreciate the difference between those two levels of existence.  We’ve been so prosperous, for so long, that we lost sight of how far our economy would collapse when value was traded for power.  The arithmetic of poverty and unemployment is simple, and merciless.  Free people multiply.  The all-powerful State is only good at division.

Cross-posted at www.doczero.org.

This post was promoted from GreenRoom to HotAir.com.
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Comments

Another fine piece by Dr. Zero. Sickening how many will hand over so much because someone who they “deem cool,” pats them on the head.

tessa on April 25, 2010 at 12:04 PM

I completely get it Doc. Imagine a teeter totter; a plank in contact with a fulcrum. Everyone experienced with public grade school has a good grasp of the dynamics of the teeter totter or a seesaw. Too few have a working grasp of how to apply the dynamics of a teeter totter to anything beyond the playground. Does anyone recall seeing or, in fact being that someone that was trapped on the seesaw, stuck high in the air with legs flailing, and the counterweighing bully just laughing mercilessly on the grounded end?

From Dr. Z’s essay one can easily pit society and government on both sides of the plank to visualize their balance relationship. Our Constitution is based on the weight of society supporting government. Our current Congress and Executive Administration are bent on becoming the weight that supports society. When the seesaw is weighted against government with entrepreneurial and free-market spirit, it does not matter where the fulcrum is because the government side is always held off of the ground and unable to gain traction to control direction. When Congress takes away the value of society, the value is devoured by government and becomes bullying weight. Without a medium of exchange unencumbered by government, we are left with our legs flailing in the air unable to take us anywhere.

ericdijon on April 25, 2010 at 12:04 PM

In a free market, earning money is a reward for innovation and good service, and your invitation (from the public) to do more of it.

RBMN on April 25, 2010 at 12:09 PM

The dollar I earn isn’t just some piece of paper. It’s (for me) four minutes of headbanging over a customer’s issue, getting stuck in traffic between schools, sitting in a cramped office running a reimage on a hopelessly b0rked system, etc.

If somebody wants that dollar, they can do my job, as far as I am concerned.

Sekhmet on April 25, 2010 at 12:10 PM

When P > W then M – V

In Engish when Power is greater than Will then Money – Value

William Amos on April 25, 2010 at 12:10 PM

If somebody wants that dollar, they can do my job, as far as I am concerned.

Sekhmet on April 25, 2010 at 12:10 PM

You have to think that those that have no problem taking YOUR MONEY simply do not understand money or the value of work. I suspect it is likely they are not working. They are often of the 47%.

CWforFreedom on April 25, 2010 at 12:13 PM

Doc, you do a great job of taking our understanding of these issues to a deeper level. Many of us can say we don’t want/like big government, but few of us can describe the reasons for that preference as eloquently as you have.

(BTW, nice post ericdijon.)

Dee2008 on April 25, 2010 at 12:13 PM

The Socialists control people in two ways:

They TAKE from non-supporters with the threat of taking more as means of Control.

&

They Give to supporters with strings attached as a means of Control.

Chip on April 25, 2010 at 12:14 PM

Another Great column Dr. Z, BTW.

Maybe a compilation of all these lessons in the form of a textbook should be required reading, lest we continue on this path of societal self-destruction,

Or after the Democratic National Socialist Party is driven out of power.

Chip on April 25, 2010 at 12:19 PM

Another fine piece by Dr. Zero. Sickening how many will hand over so much because someone who they “deem cool,” pats them on the head.

tessa on April 25, 2010 at 12:04 PM

I think it isn’t really the cool factor so much as all of our leftist national socialists think that in the end they will be the ones holding the whips and living in the mansions. The appeal of being able to master your fellow man is a strong human compulsion.

Combine with this the absolute certainty by the left that everything they do is in humanity’s best interest, and there is no barrier that they will recognize morally as to how far they will go.

18-1 on April 25, 2010 at 12:20 PM

Excellent as usual, Doc. Since your “Green Room” posts always get promoted to the front page, why don’t they just post ’em on the front page to begin with?

Who is John Galt on April 25, 2010 at 12:22 PM

To put it simply.

Money is a vehicle of wealth.
Government cannot create wealth.
Giving government money destroys wealth creation.

ButterflyDragon on April 25, 2010 at 12:25 PM

If somebody wants that dollar, they can do my job, as far as I am concerned.

Sekhmet on April 25, 2010 at 12:10 PM

I’ve noticed that leftists get skittish when you start describing taxes not as money taken, but as time.

Some level of taxation is necessary of course, but it becomes much harder to justify taking 2-4 hours of a person’s time every work day to fund things like corporate welfare, funding ACORN, or the bloated salaries of the federal bureaucracy.

18-1 on April 25, 2010 at 12:28 PM

The Socialists control people in two ways:
They TAKE from non-supporters with the threat of taking more as means of Control.

&

They Give to supporters with strings attached as a means of Control.

Chip on April 25, 2010 at 12:14 PM

And, in my view, there’s a coming battle between the Givers and the Takers. It’s likely to be ugly.

mike in NV on April 25, 2010 at 12:28 PM

When Congress takes away the value of society, the value is devoured by government and becomes bullying weight. Without a medium of exchange unencumbered by government, we are left with our legs flailing in the air unable to take us anywhere.

ericdijon on April 25, 2010 at 12:04 PM

In to-days America, it would appear that too many are willing to sacrifice freedom for comfort or security. Unknowing or unwilling to acknowledge, that a totalitarian government provides neither, because it seeks to proliferate itself to the detriment of it’s people.

We have reached the tipping point on the teeter-totter.
It’s going to be a short devastating ride.

donh525 on April 25, 2010 at 12:29 PM

The Socialists control people in two ways:
They TAKE from non-supporters with the threat of taking more as means of Control.
&
They Give to supporters with strings attached as a means of Control.
Chip on April 25, 2010 at 12:14 PM

And, in my view, there’s a coming battle between the Givers and the Takers. It’s likely to be ugly.
mike in NV on April 25, 2010 at 12:28 PM

Yup, That is why there are more and more Achievers – the people fed upon by our National Socialist Government and their dependent moocher class – are stocking up on supplies in case it gets ugly, instead of producing more and more for a National Socialist Government that will simply take more and more.

Chip on April 25, 2010 at 12:42 PM

Your words echo those of the great Milton Friedman who stated that political freedom is not possible without economic freedom. The free market is based on voluntary transactions among people. When the transactions are no longer voluntary, we are not free in any sense of the word. A government that compels us to give it our money or to purchase a service (as Obamacare does) makes us all less free.

To some extent, a reduction of freedom is necessary to make a cooperative society function. But the more government grows in power, the less freedom we have. That balance should have been established and held fixed by our Constitution, but as you know, we have allowed that essential charter’s provisions to be made moot in so many ways. Sadly, that trend is accelerating and freedom is on the wane as a consequence.

MJBrutus on April 25, 2010 at 12:44 PM

Demonrats, in their minds, feel they are entitled to lead the masses as to the intellectual capacity that they feel is inherent in their being. Reality dictates for every action there must be something to support that action other than wishful thinking. They can only provide theory that sounds good to them, but in turn provides no guidance on how that theory is to become reality. Of course if they had any conception of reality, they would be republicans.Dreams are hard to eat when hunger exists.

volsense on April 25, 2010 at 12:47 PM

Was this forwarded to Obama?

yubley on April 25, 2010 at 12:55 PM

Too late. The Dems will have us all learning the ‘three sea shells’ soon.

Limerick on April 25, 2010 at 12:56 PM

Would you risk your life to gather all those … crayon sketches pinned to your refrigerator, if your house were about to be destroyed in an earthquake, and you had only moments to evacuate? The situation would eliminate your choices in the matter, and the value of the items would diminish

Yeah, Doc, as a parent I would…it is still my choice and the value actually increases not diminishes.

publiuspen on April 25, 2010 at 1:00 PM

We have reached the tipping point on the teeter-totter. It’s going to be a short devastating ride.
donh525 on April 25, 2010 at 12:29 PM

The 50% mark is not just a mathematical oddity; it is a very real watershed. It is the ultimate dividing line between a free society and a collectivist society.

The good news is that once that line is crossed, “taxation” as we know it becomes a thing of the past. The bad news is, that’s when the wholesale confiscations begin.

Once that line has been crossed, it is no longer a question of the government asserting its right to take a portion of your income. At that point, the government presumptively owns everything, and it is each citizen’s burden to prove why he or she should be allowed temporary custody of a fraction of the collective wealth.

America had been slowly inching toward that line for over seventy years.

That has changed now. In the past two years, the federal government stopped sneaking and started sprinting for all they’re worth. And there is a REASON for that.

It was an uphill battle before now. But once they get past this point, the slog ends and the toboggan ride begins.

logis on April 25, 2010 at 1:03 PM

Very interesting post, but there is a subset in the “value” and “power” components. That is “morality”.

A society electing a few to impose a certain “morality” on the whole citizenry is both horrifying and desired by all, depending on who you are and how you define “morality”. It is horrifying to the right when the left legislates their “morality” and its horrifying to the left when the right legislates its “morality”. The right desires that the morality of the right be imposed upon all, and the left desires that the morality of the left be imposed upon all.

gocatholic on April 25, 2010 at 1:03 PM

Again, Doc Zero explains it. Another good article today is over on BigGovernment by Warner Todd Huston that blows Michael Medved right out of the water on his “belief’ that O does not want to destroy the USA. I have been yelling at my radio for months that he his nuts,,,Huston explains it perfectly.

retiredeagle on April 25, 2010 at 1:11 PM

Another great post Doctor Zero! Should be required reading for all socialist-lite apologists.

It’s time to say it outright: President Obama is foresworn. He swore the oath to protect and defend our Constitution from all enemies, foreign and domestic. Not the Constitution as he wants it to be, but the Constitution as it is written. He has not done it. In fact, he’s actively attacking and debasing it himself, and our country, and our citizens. He is foresworn.

starboardhelm on April 25, 2010 at 1:20 PM

It was an uphill battle before now. But once they get past this point, the slog ends and the toboggan ride begins.
logis on April 25, 2010 at 1:03 PM

That may be true, but there is a big difference this time – We can fall back on the experience of history.

We know how this will proceed because it been done this way in the past and we can use that knowledge to oppose the Statists.

Chip on April 25, 2010 at 1:22 PM

Yes, Doc got most of what money is in his article. He missed the most important part. You trade a part of your life (hrs. worked) for money. Therefore we allow a government, by force, to steal a part of our lives. This is what our founders were writing when they wrote life, liberty and the pursuit of happiness.

Grayzel on April 25, 2010 at 1:25 PM

Excellent post Doc.
And it is something that socialists do not understand.
If you ask them where money comes from, they’ll tell you the government creates it. just go back to the clip of the idiots in Detroit lining up to get their “Obama Money”.
Money is created through the mutually beneficial transactions that you described.
Government, taxes, and the “entitlement” programs are a drain on every working person and every transaction. Ayn Rand described it as a “hemophilia” draining the very life blood from our nation.

She was right.

MaaddMaaxx on April 25, 2010 at 1:29 PM

Money is the reward for taking advantages of the many opportunities available in a free market society. Take away the free market, you take away the opportunities to make money thus making everyone poorer. Socialism which sharply reduces market freedoms is indeed the ideology of the impoverished or soon to be impoverished masses.

docdave on April 25, 2010 at 1:32 PM

Its a pretty sad commentary on the country when the government has so much centralized power that Americans are reduced to begging for what the President allows them to have.

Begging the government was not one damn thing our founders ever devised for us.

Speakup on April 25, 2010 at 2:05 PM

Another ‘side effect’ of THIS administration is creation of dependence on the ‘masses’. The all powerful, all knowing, Barracky boy wants to be everybody’s ‘parent’.
ANOTHER CONCISE, PROFOUND ARTICLE, DR. ZERO.
Thanks again.

Cybergeezer on April 25, 2010 at 2:18 PM

I’m sending a copy of this to whitehouse.gov; SOMEBODY there has to be exposed to the TRUTH!

Cybergeezer on April 25, 2010 at 2:20 PM

This is what we all have to do. Educate people about the basics. Too many have lost basic understanding of things like self government and economics. Republicans who just talk about tax cuts and more jobs (all important) but are not prepared to defend our constitutional government are ill prepared. People, especially the younger generation, have not even been taught basic concepts like this. Obama wants to fundamentally change America. We all have to be prepared to defend America on all the fundamental principles that have made this nation great. From economics to freedom of speech to freedom of religion to self government. All of it is in the cross hairs. All of it needs to be defended. Many in the public have either forgotten, or are ignorant because it was never taught to begin with.

JellyToast on April 25, 2010 at 2:36 PM

JellyToast on April 25, 2010 at 2:36 PM

As Dr. Zero said:
‘…..We’ve been so prosperous, for so long,…..”
Even the poverty level is far above what it is in all other countries.

Cybergeezer on April 25, 2010 at 2:45 PM

I’d like to see a ‘Frontline’ or ‘White Paper’ done on ONE Mexican immigrant, to expose how much money they CAN & DO make!

Cybergeezer on April 25, 2010 at 2:49 PM

Dear Gaia, it actually is the Matrix.

Should I answer the phone?

Bishop on April 25, 2010 at 3:05 PM

I’d like to see a ‘Frontline’ or ‘White Paper’ done on ONE Mexican immigrant, to expose how much money they CAN & DO make!

Cybergeezer on April 25, 2010 at 2:49 PM

Interesting idea. We have a business that is expanding and we first use temp agencies to first, put a body in the expanded role, and second to cull through applicants. There is a demarcation wage between whom you would suspect is legal to higher and who is not. The most interesting thing on temps is the markup that the agencies put on the bodies. For example, we will ask for a $12/hr body and pay $22 but when we approach the temp-person and offer them a job, we learn they were receiving $8 from the agency.

ericdijon on April 25, 2010 at 3:14 PM

Doc, you do a great job of taking our understanding of these issues to a deeper level. Many of us can say we don’t want/like big government, but few of us can describe the reasons for that preference as eloquently as you have.

(BTW, nice post ericdijon.)

Dee2008 on April 25, 2010 at 12:13 PM

Dittoes. Doc. Well explained enough for the layman of economics to grasp.

And apt analogy, ericdijon.

onlineanalyst on April 25, 2010 at 3:21 PM

Free people multiply.

Our “Free” part is dancing on a pivot. November will decide if we wish to continue to be free, or if we march into the arms of modern day serfdom.

Dr. Zero, you should be the spokesperson for the RNC.

Schadenfreude on April 25, 2010 at 3:34 PM

What is power? It is the ability to impose your will upon others. Power requires compulsion, which can range from a mild set of incentives through absolute domination.

That is not true. You only need a dictionary to confirm it:

pow•er (pou r)
n.
1. The ability or capacity to perform or act effectively.
2. A specific capacity, faculty, or aptitude. Often used in the plural: her powers of concentration.
3. Strength or force exerted or capable of being exerted; might. See Synonyms at strength.
4. The ability or official capacity to exercise control; authority.
5. A person, group, or nation having great influence or control over others: the western powers.
6. The might of a nation, political organization, or similar group.
7. Forcefulness; effectiveness: a novel of unusual power.

Powerful people like Glen Beck, Rush Limbaugh John Stewart etc… can’t “impose their will” on anyone, but they are able to persuade thousands to act in ways that eventually may or may not be of value to them.

And no, government can and frequently does create value. It’s just that it’s generally less efficient at doing so than private organizations.

You’ve got a sharp mind and lot of potential Dr. Zero, but you reached beyond yourself there.

elfman on April 25, 2010 at 3:38 PM

P.J.O’Rourke, as sober as I’ve ever read him.

The smart set stayed in fashionable Europe, where everything was nice and neat and people were clever about looking after their own interests and didn’t need to come to America. The Mayflower was full of C students. Their idea was that, given freedom, responsibility, rule of law and some elbow room, the average, the middling, and the mediocre could create the richest, most powerful country ever.

Thus in America nobody loves a smart-ass. What’s interesting about Obama is that he didn’t start out being one. Lips (and academic records) are sealed at Occidental College and Columbia, but Obama doesn’t seem to have been an A student as an undergraduate. He learned to “make it or fake it” at Harvard Law where he graduated magna cum laude. Worse than an A student is somebody pretending to be one, witness Al Gore.

Schadenfreude on April 25, 2010 at 3:55 PM

This is an EXCELLENT post. Another fine addition to put the nail in the socialist coffin.

You took what I believe, and found a way to articulate it so well, that words finally do do the meaning some justice.

V said it best: Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there?

Emperor Obama doesn’t understand the whole principle behind hard work. He’s never had to work a day in his life in the real world. His salary comes from community organizations, schools, and the public sector. The man hasn’t contributed one-cent to this economy in the private sector. He’s more concerned about taking money out of the private sector and putting it to where he see’s fit.

And in reality, how can you expect Obama to know the meaning of money and value when all he cares for is more power?

PrototypeOne on April 25, 2010 at 4:15 PM

Excellent post. Doctor Zero, you’re a writer’s writer. I can see why you get promoted often.

Grace_is_sufficient on April 25, 2010 at 4:35 PM

The arithmetic of poverty and unemployment is simple, and merciless. Free people multiply. The all-powerful State is only good at division.

Doc, what an extraordinary and concise treatise on money, power, and value with respect to capitalism and socialism. Thank you so much for such a compelling read. Nice work.

ted c on April 25, 2010 at 4:35 PM

Another excellent post Doc.

ronsfi on April 25, 2010 at 4:40 PM

What is power? It is the ability to impose your will upon others.

Actually power is your ability to act. Imposing your will on others is one type of power but it’s far from the only one.

Darth Executor on April 25, 2010 at 4:55 PM

I’ve noticed that leftists get skittish when you start describing taxes not as money taken, but as time.

Some level of taxation is necessary of course, but it becomes much harder to justify taking 2-4 hours of a person’s time every work day to fund things like corporate welfare, funding ACORN, or the bloated salaries of the federal bureaucracy.

18-1 on April 25, 2010 at 12:28 PM

Yeah, but it’s just “rich people’s time”, so who cares, right?

/sarc

Midas on April 25, 2010 at 5:00 PM

Powerful people like Glen Beck, Rush Limbaugh John Stewart etc… can’t “impose their will” on anyone, but they are able to persuade thousands to act in ways that eventually may or may not be of value to them.

They are not governments — with the sovereignty that implies. Bad simile.

And no, government can and frequently does create value. It’s just that it’s generally less efficient at doing so than private organizations.

What you say is exactly what Doc Zero is saying. That negative efficiency you tout drains value.

Our government, however, was founded precisely on providing only certain kinds of value — most specifically, the kind (defense, laws for internal trading) which enables us to maximize our individual production of value for ourselves. The founders of our government were selfish people — they wanted to keep the blessings of liberty for themselves and their posterity, not be required to give them to others who did not likewise exert themselves. As a result, we built a powerful country (one which is capable of keeping and maintaining trade with any number of other countries), with very high standards of living.

Every other country which has embraced socialism has discovered that distributing value creates a disincentive for creating value. As the amount of income taken from each person and redistributed approaches 100%, the incentives for each person to exert themselves in contribution diminishes appropriately.

One of my relatives came from Communist China, where he was, for many years, a duck herder on a commune. He got his ration and sleeping quarters whether he herded ducks well or not. When he got here to the USA, he was on welfare for a while while he learned a new trade — because we don’t have duck herders here. After learning his new profession, he sat in his room reading until the welfare ran out. At that point, he found out the difference between the USA and China. Here, (aside from the initial handout) he was responsible for exerting himself to improve his life, whereas, in China, improving his life was completely out of his hands — in fact, exertion to improve one’s personal standing was a bourgeois tendency which could wind one up in prison. Within a few months, his bourgeois tendencies were in full flower and he’s never looked back.

You’ve got a sharp mind and lot of potential Dr. Zero, but you reached beyond yourself there.

elfman on April 25, 2010 at 3:38 PM

If he has, you have not proven it. I have disagreed with many of his posts, but not this one.

unclesmrgol on April 25, 2010 at 5:22 PM

The high-performance fiber optic communication lines of free-market capitalism have been torn out, and converted into feeding tubes for our bloated central government.

The best written sentence I’ve read in a long time.

It sucks the way things are going, but at least we have Doctor Zero. I can’t tell you how much I enjoy his pieces.

Alana on April 25, 2010 at 6:22 PM

OT…but the NRSC has come up with a good ridicule ad

Rainbows & Unicorns

Use the alinsky rule of ridicule against them.

lukespapa on April 25, 2010 at 6:22 PM

Every dollar you pay the government in taxes and regulatory costs is another moment of your time that cannot be invested in willing cooperation with others.

More than your time, it therefore represents that portion of your life that you exchanged for that money. Bastiat puts it very well in “The Law“. When a government is tasked with protecting the lives of its citizens and instead takes the fruits of their labors, they are indeed taking that portion of their lives that money represents.And are we not told by the 2nd Amendment that we can indeed protect our lives? And by the 13th Amendment we can not be forced to work for the benefit of another? What happens when the government becomes the slaveholder, the one that cracks the whip across the back of the very producing citizens it is, by oath and by law, ordered to protect? That should the citizen wish and acts to keep the fruit of his labor, to dispose of as he see fits, that that slaveholder has the option to send men with guns to enforce the will of the slaveholder?
What happens when the law enforcers become the principal law breakers?

Amendment X on April 25, 2010 at 6:27 PM

NSDAP – National Sozialistiche Deutsche Arbeiter Partei = NAZI from the pronunciation of the first word: Not-see-oh-nall. Left wing, not Right! That’s what we’re dealing with. The only thing right about Nazis is their position to the right of Communists. The two are similar ideologies with the same catastrophic results. A brief civics lesson:

http://www.youtube.com/watch?v=N4r0VUybeXY

LarryG on April 25, 2010 at 6:37 PM

It baffles me how so many can complain about gov’t corruption, waste, & inefficiency, but then in the next election vote for candidates who want to make gov’t more powerful.

itsnotaboutme on April 25, 2010 at 6:38 PM

And no, government can and frequently does create value. It’s just that it’s generally less efficient at doing so than private organizations.
elfman on April 25, 2010 at 3:38 PM

No, Government can’t create value, because it must first TAKE that value from the private sector. But you are right about the efficiency, which why the 2nd hand value Government does end up creating is less than what it took in the first place.

But that value is less than what it would have been to the economy if Government hadn’t interfered in the first place, which supports my claim, above, that it can’t create any, but, in fact, ends up destroying some value due to waste/fraud/corruption.

BlameAmericaLast on April 25, 2010 at 6:42 PM

I’ve noticed that leftists get skittish when you start describing taxes not as money taken, but as time.

Some level of taxation is necessary of course, but it becomes much harder to justify taking 2-4 hours of a person’s time every work day to fund things like corporate welfare, funding ACORN, or the bloated salaries of the federal bureaucracy.

18-1 on April 25, 2010 at 12:28 PM

You strike an excellent idea my good friend!

I say we should try to illustrate the amount of time it takes to earn all those taxes (and to earn the equivalent of government spending). I bet that would be more of a shocker than dollar amounts.

Time is money… how much time are you giving to the government?

Chaz706 on April 25, 2010 at 6:53 PM

ericdijon on April 25, 2010 at 3:14 PM

But, Mexicans seem to know better; They stay away from the ‘Day Labor’ purveyors.
The ‘underground economy’ in the U.S. is large enough to offset the national debt and provide some excess.
Mexicans are not stupid enough to kill the ‘Golden Goose’, but they are smart enough to keep themselves in business. And if the business wasn’t as big as it is, then they wouldn’t take mortal risk to participate.
I have to congratulate you for starting any business in this atmosphere.
Best of luck!

Cybergeezer on April 25, 2010 at 6:58 PM

Alana on April 25, 2010 at 6:22 PM

It’s not only rhetoric; It’s reality.

Cybergeezer on April 25, 2010 at 7:00 PM

elfman,
By your own description, Beck and Limbaugh and Stewart are NOT powerful; they are merely influential. If they had power they wouldn’t have to offer arguments to convince anybody of anything. They could simply command something be done and specify a sanction on those who did not comply. Sound familiar?
That unique feature – the raw ability to coerce with deadly force if necessary – is the reason why any sane human being must consider government a necessary evil. Admitting the necessity mitigates the evil not one bit, and similarly admitting the evil mitigates the necessity not one bit. That’s why it needs to be sharply proscribed and caged into as small an area of authority as possible. It’s a cold blooded eating machine, but we’re stuck with it until human beings become angels!

Lew on April 25, 2010 at 7:03 PM

They are not governments — with the sovereignty that implies. Bad simile

That makes no sense. DZ didn’t say “government power” he said “power”. Turn that frown upside down…

elfman on April 25, 2010 at 7:36 PM

Could you reply to me, elfman? =)

BlameAmericaLast on April 25, 2010 at 7:40 PM

I grit my teeth every time I see that still / video which heads this topic. The moment the POSUS said ‘redistribution of wealth’, ‘Joe the Plumber’ should have knocked him on his rear.

rayra on April 25, 2010 at 7:41 PM

“No, Government can’t create value, because it must first TAKE that value from the private sector.”
BlameAmericaLast on April 25, 2010 at 6:42 PM

That’s a common phrase, but untrue. Taking something does not prohibit someone from creating something of more value with it.

Our judicial system and the military are the most obvious cases in which our government creates value from the taxes that it takes. Other services are debatable.

elfman on April 25, 2010 at 7:42 PM

elfman,
“By your own description, Beck and Limbaugh and Stewart are NOT powerful; they are merely influential.” Lew on April 25, 2010 at 7:03 PM

I think you’re confusing DZ’s definition with my definition. I just used the definition out of the dictionary and cited several, including: “1. The ability or capacity to perform or act effectively.”

elfman on April 25, 2010 at 7:47 PM

Could you reply to me, elfman? =)
BlameAmericaLast on April 25, 2010 at 7:40 PM

Hey, I got you 4 minutes before you posted that, but forgot to include your screen name.

elfman on April 25, 2010 at 7:50 PM

But that’s my point: It doesn’t create something more valuable, the inefficiency reduces the value that was there before!

Are you saying the current judicial system or military is better than a private one would be?

Think about it for a moment.

BlameAmericaLast on April 25, 2010 at 8:01 PM

What I do is an expression of my liberty, it does not matter if I am paid for it and one does much in their life for which they gain no recompense, save the pursuit of happiness.

Thus when I work for money the value of my work is to get means of my expression of freedom for which I can do other things or procure other goods that I cannot do for myself. The money is only a representation of part of the value I put into work. From that if I do better than others due to my work being of better quality, faster, or having intangibles such as esthetic beauty, then I may achieve more than others for those things. Those who see the greater value in those things are often willing to pay more for them, and my earnings then represent an appreciation of my liberty well applied.

I have witnessed many in life who can do tasks exceptionally well, yet they do not value those skills at all highly even when paid more for them: they are unhappy as their pursuits are not of happiness but mere monetary value. Their lives are worse off even with greater medium of exchange as they have made the unhappy choice of utilizing their liberty at something they do not, themselves, appreciate.

From that one understands that money is not at the root of evil, but it is one’s unhappiness at labor that is unfulfilling that is at the root of sorrow.

Money when used to gain earthly power is water through one’s hands as power is a lust that is never sated, never ending and not a path to happiness as one who seeks to control others cannot control themselves in this aspect. Their liberty is put to the task of tyranny, and in the hearts of those who wish to control others, no matter to what end, is the heart of the tyrant.

Money is not the evil, that is in the hearts of men and money is but one expression of such evil not its beginning nor its end. Such power when drawn from the resources of others then turns their good providence provided by their liberty against them, and then we find the unfortunate circumstance where the medium of our exchange becomes the source of our unhappiness when taken by those with the hearts of tyrants. The money is not the cause of the unhappiness: the tyrant is. And when such expression of our liberty is extracted for the common good to enrich the few, then our labors are set to work against us and that thing we create to be our safehouse for our negative liberties, this Punisher we call government, then becomes the source of our sorrow. Well is it when government is kept under close scrutiny and starved of all but the bare essentials, as then our positive liberties flourish when we are safeguarded from the evil that men do.

Those who are sweet of tongue and ill disposed towards respect of the liberty of their fellow man see no reason a Punisher cannot extend its grasp to do more, extract more, and provide less and less until it cannot even protect society and becomes its torturer. That is when the organ of society becomes the cancer of society, the destroyer of that thing it was meant to sustain and the petty tyrants feel they can rule, not govern… because they cannot govern themselves at all and wish to control everything so they might just control themselves. How sad they are when all they bring is sorrow when they promised such sweet joy from the lash of the Punisher. Soon they are under the lash themselves from the creature they created.

Property is but an expression of the pursuit of happiness, not an end in and of itself. Your liberty is sacrosanct until it is taxed and burdened for the common good, then those should be light so as not to imprison you and turn your good works against you. When others come to promise such sweetness that the Punisher can give, look askance as they are rattling chains made from the metal you have forged with your liberty. Those are the tyrants, those willing to extract from you to give to others, they are thieves and they mean you no good. Ever.

It is not ‘just the money’: it is our liberty, our freedom and our pursuit of happiness. We, the people, are to take care of the poor, the sick, our elders, and cherish them. We are not to hand them over to that creature with the lash, for it is not a provider of comfort, but a Punisher of those seeking ill towards us as individuals and society. We have gladly handed over more and more to this Punisher, and the chains on us grow heavier by our own work. So sweet is the comfort of knowing that our burdens to our fellow man our lifted from us. How awful to find the chains replacing that burden to be heavier still.

I know those who mean ill towards me.

They tell me of all the good government can do.

Because they cannot do good towards their fellow man, they want me to do it for them from my liberty.

Be not upset at these sweet tongued slacker tyrants.

It spoils the aim.

ajacksonian on April 25, 2010 at 8:20 PM

Another way to look at this is to view money as a representation of capital. There are different types of capital. First, we have things that are real, like equipment and real estate. Second, we have human capital–i.e. knowledge, skills, and experience. Third, we have social capital, social bonds between people in a group. Fourth, we have civic capital, the propensity of strangers to cooperate–trust, in another word. All four are necessary in order to produce a given economic good. At this point I hope it already is somewhat obvious why any wealth redistribution scheme inevitably leaves everyone poorer. Only one of these four kinds of capital is transferable. Experience and skills cannot be transferred from one person to another. Friendship and trust cannot be transferred. Reputation cannot be transferred. Attempts to do so only ends in a destruction of capital.

An concrete example: Mel runs a popular restaurant. The locale, kitchen equipment, furniture and so forth constitute the hard capital. Mel’s cooking skill is the human capital, critical to this enterprise. The trust that Mel has for his employees, the fact that they like working for him, and the loyalty of regular customers are social capital. The reputation of the restaurant for good food and the implicit trust that the food won’t make you sick are the civic capital. Now suppose Obama decides to confiscate Mel’s and give it to his one of his ACORN cronies. Immediately, the reputation of the place evaporates once people learned of the change in ownership. Regular customers bolt and employees are suspicious of the new owner. And it turns out the man can’t cook. So the economic value of a once striving business gets reduced to that of used cooking equipment and furniture (assuming Mel was leasing the location).

A total seizure is, of course, the extreme case. Confiscatory tax policy could lead the same outcome though: i.e. Mel is forced to close the restuarant because it’s no longer profitable. Even if that does not come to pass, we would still see various forms of capital destruction. Suppose a VAT is imposed to fund ObamaCare. Dishes at Mel’s become more expensive and customers cannot afford to come as often–a loss of civic and social capital. If Mel is forced to let an employee go–a drop in social capital. Other parts of the liberal agenda can be similarly destructive. Suppose a limit on salt is imposed. Mel can’t cook as well as before, thus it’s a loss of human capital. The reputation of the restuarant suffers–a loss of civic capital. Suppose SEIU organizes the staff. There’s more tension at the workplace as a result–a loss of social capital. The waiters decides the way to a greater income is tough negotiation instead of good tips for good service–a loss of human capital.

I think this is a useful way to evaluate the economic impact of government policies. Government actions tend to destroy capital, though not always. Ensuring the streets are safe and parking is ample increase participation in civic life, benefiting all businesses in area. Spreading-the-wealth policies, on the other hand, are very destructive, suppressed in harmfulness perhaps only to government sanctioned thugs running around, smashing up businesses. Advanced economies like our are more dependent on intangible capitals, so we have more to lose. But even in an economy still heavily agricultural, where land is the key capital, the loss of experience and trust can be devastating. What I have in mind here is, of course, Zimbabwe.

year_of_the_dingo on April 25, 2010 at 8:25 PM

OT…but the NRSC has come up with a good ridicule ad

Rainbows & Unicorns

Use the alinsky rule of ridicule against them.

lukespapa on April 25, 2010 at 6:22 PM

Lukespapa – this add kicks!
Hope for a massive ad buy – they’ve got a winner.

massrighty on April 25, 2010 at 8:42 PM

Where in this equation are the people who don’t want to work as hard or take the risk or invest the money or get others to go in with them and pool the risk for a greater reward? They are in the part of this socialist takeover where they hand over their vote and sit back and settle for what the Big Gov’t will dole out to them and they won’t have to envy what others have because no one will have and when it all runs out … they will riot… I’m cynical I know but I’ve seen this happen in Venezuela, Bolivia, Ecuador… there wasn’t some big coup there… the citizens voted in socialist so that they can take from the producers and then bring them down to their lot in life…if they can’t prosper no one is going to prosper.

Barry’s big plans (actualy the poeple behind him) are to overwhelm us, grow the gov’t, get the pueblo to outnumber us and then get their vote against us… I know I sound crazy but I really think this is what is up…

Great article Doc O… You are the best….I really enjoy reading everything you write and I learn so much…

CCRWM on April 25, 2010 at 11:19 PM

But that’s my point: It doesn’t’t create something more valuable, the inefficiency reduces the value that was there before!
Are you saying the current judicial system or military is better than a private one would be?… about it for a moment.

BlameAmericaLast on April 25, 2010 at 8:01 PM

Hey BAL, sorry I couldn’t get back sooner, had to put away groceries, make dinner, kids’ baths, dishes etc…

Regarding your last, I didn’t say that, but I will now.

For an activity to be of value, it only has to be worth more than its cost. It doesn’t have to be worth more than a theoretical never-been-done-before hopeful scenario of a free market alternative. Anything we purchase could arguably be done better in an ideal world, but that doesn’t mean that the people who produced it did not create value. Therefore, our military, police and criminal justice systems only have to be worth more than their cost verses having none at all.

Now, back to your suggestion that the judicial system and military could be privatized. I’ve struggled with this as well, but I think that these systems are the proper role of government.

Regarding the military, we need a large professional army that can not be fully privatized. Partially privatized, yes, but not beyond a field command level at most. Its mission, operational contingencies and planning are too tightly integrated with the fluidity of politics and our foreign policy to command it through constantly changing contracts. And as best as I can tell, it will cost far more than could be paid for by voluntary contributions or any pay for service mechanism that I can imagine. So yes, the government run military does provide value, even compared to a private option.

Regarding a private judicial system. Which private judicial system? If there can be one, why not several. Why not let every man claim his own laws and his own police? That’s anarcho-capitalism, and it quickly breaks down to mob rule (as in Mogadishu.)

We have the right to defend ourselves through force. But we do not have the right of “retaliatory use of force”. We don’t have the right to punish those who we think have wronged us. There must be only one authority able to do that or it’s anarcho-capitalism. That is government’s proper role. Maybe it can be further privatized, but it must still be run by the government, democratically, and within the structure of a Republic. So yes, that’s is of more value than both having no judicial system and having multiple anarcho-capitalist ones.

Hope I’m being clear, it’s late and my 5 & 7 y/o boys have beat me…

elfman on April 25, 2010 at 11:29 PM

Thank you Mr. d’Anconia

Ortzinator on April 26, 2010 at 1:38 AM

The article is inadequate because it doesn’t address wealth and wealth creation.

The fundamental difference between those on the left and normal people is the understanding of what wealth is and how it’s created.

The left firmly believe that labor (the average worker) creates wealth. And that is the single most important flaw in their Marxist ideologies.

Wealth is basically what people desire to have. When a person creates a service or product that other people desire to have, they have created wealth.

The ingenuity of the wealth creators (inventors, artisans, etc.) is the driving force behind wealth creation. The guy who punches a clock every day to sit on an assembly line to make widgets does not create wealth. He facilitates the wealth creation by the individual who birthed the concept of that widget.

Without understanding the basic concepts of wealth, wealth creation and how government plays into that, the divide between leftists and normal people will only grow.

The talk of value is nonsense. Value is a measurement of desire. Nothing less, nothing more. And it’s different for each person. There can never be a standard set for the value of any item. Only an average of many different individuals determination of value to them.

At this time in our history, wealth creators are being assaulted by the one entity that was formed to protect it, our government.

The right to liberty is the wealth creation our founding fathers understood. The rights of those wealth creators were to be protected. We have lost our way because we have forgot what wealth is, how to achieve it and how to protect it.

Obama and his leftist goons truly believe wealth lies in the hands of the workers. And that those workers are being taken advantage of. But as has happened with every other socialist experiment, it will fail due to the wealth creators being criminalized, demonized and ostracized from our communities. When those wealth creators are gone, ingenuity dies. The workers will have no widgets to put together.

Government cannot create wealth. It’s very nature precludes that from happening. Government can protect and encourage wealth creation by policy and law. But it cannot create wealth out of legislation. Any attempt for the government to create wealth will only rob the private sector of needed resources for the creation of wealth.

Until people understand the principles behind creating wealth, liberals will always have a chance to much things up.

ButterflyDragon on April 26, 2010 at 1:47 AM

A great view of money is to see it as VOTES.

As you give goods and services to consumers, they give you their “votes” based on how well you help them. The one with the best price/value will get the most “votes” and they will have more to spend on other goods/services.

DavidM on April 26, 2010 at 8:27 AM

elfman

Looking up the dictionary definition of “power” and using its other definitions to muddy the waters is a sophist’s trick. “Power” also means something different and very specific to a physicist, but we’re not talking physics here (do we measure Obama’s “power” in kilowatts?), we’re talking political theory, in which case only definition “4. The ability or official capacity to exercise control; authority” is interesting. If we are having a discussion on political power, and you think the word power means seven different things all at once, then it is impossible to communicate. Why have the discussion at all?

shazbat on April 26, 2010 at 8:51 AM

Perhaps Doctor Zero could list all the current socialist programs run at the federal, state and local levels that she wants to eliminate.

Dave Rywall on April 26, 2010 at 10:17 AM

Looking up the dictionary definition of “power” and using its other definitions to muddy the waters is a sophist’s trick.
shazbat on April 26, 2010 at 8:51 AM

There’s no reason to accuse me of sophistry unless the facts aren’t on your side. They’re not. You’d be better off asking for clarification than reflexively attacking.

If DZ though to restrict the definition of power to political power, he would have made the distinction. Instead he just said, “Your best friends might be willing to honor almost any of your requests, but you don’t really have power over them.” He’s attempting to blend the two together and claim social powers don’t exist. They do. Best friends generally have a great deal of power over each other (until they misuse it.) Both can be used for the better or worse.

His thesis is that no value can be created without freedom, and freedom exists without government intrusion. That’s oversimplified. Liberty does not necessarily equal freedom. Liberty is freedom from government. Freedom is being free from any restraints, free from anyone exerting “power” over you.

Government can make you drive 55, turn on headlights at night, clean up your yard, stop smoking on the bus, put your kids in car-seats, pay trillions for wars you dislike and laws that you don’t agree with. But even with those freedoms restricted, you can still produce wealth. The loss of freedom is not always a bad thing.

Social power has historically been tyrannical, promoting: racism, sexism, religious discrimination, monopolies, exclusionary clicks, etc… Openly pursue any of that in this country at this time, and you’ll see how much power society has over you. But even with those freedoms restricted, you can still produce wealth. The loss of freedom is not always a bad thing.

DZ oversimplifies the truism that miss application of power hampers wealth creation, and he’s just wrong that government power creates no wealth. In the same way that the power of government rightly restricts our freedom to pick which wars or laws we pay for, the power of our social network rightly restricts our freedom to pick which people to call racial or religious pejoratives. So yes our best friends do have real power over us.

People are most productive where the freedom to act is at the lowest level that makes sense. It’s as oppressive to value creation when our society tells us what church to attend and what groups we should associate with as is our government telling us which car to drive and what health insurance to buy. Those are examples of powers that belong at the lowest level, of individual freedoms.

People are most productive when Governments are constitutionally forbidden from using the power we give them to centrally manage us. (A similar principle apples to social relationships.) Washington is simply engaging in a power grab along progressive principles of centralized management, and it’s a drag on the wealth creation that our economy depends upon.

elfman on April 26, 2010 at 1:04 PM

I said years ago, that Obama was a whore for the Democrat Party and a puppet for the Democrat Congress.
He’s proven me right so many times.

Cybergeezer on April 26, 2010 at 5:39 PM

Our judicial system and the military are the most obvious cases in which our government creates value from the taxes that it takes.
elfman on April 25, 2010 at 7:42 PM

You didn’t say that? I only brought it up because you did.

The choices are not anarchy or government run. Anarchy never lasts long, as Mankind abhors a power vacuum. So the real choice is public owned or private owned.

You already mentioned mercenaries, so I’ll clarify “private” judicial systems.

These are courts that are run by private entities, not government.

Sharia law courts are a distasteful example but they ARE an example.

Google “Mandatory arbitration” for more info on how this works in contract law.

Let me say it again: because Government must first take wealth out of the economy, inefficiently I’d add, the net effect is less than what was first taken, because we make more wealth than the government ever could.

BlameAmericaLast on April 27, 2010 at 2:38 AM

The choices are not anarchy or government run. Anarchy never lasts long, as Mankind abhors a power vacuum. So the real choice is public owned or private owned.
BlameAmericaLast on April 27, 2010 at 2:38 AM

BAL, Anarchy is privately owned judicial systems. Private organizations (gangs) defining their own laws (rules) and administering justice as they think is right (in their interest).

Google “Mandatory arbitration” for more info on how this works in contract law.

We have a constitutional right to trial by jury for criminal charges. I’m not clear where arbitration applies beyond civil charges, but it seem to be a contractual system and its authority and scope is managed by government. Government courts are eventually responsible through appeal, similar to the way our government is eventually responsible for whatever we task Blackwater with in Iraq.

We of course have a right to self defense. But with don’t have a right and should not have a right to retaliatory use of force.

Let me say it again: because Government must first take wealth out of the economy, inefficiently I’d add, the net effect is less than what was first taken, because we make more wealth than the government ever could.

Virtually everything produced must first take wealth from the the economy. Both Blackwater and the US Marines tax people before the create value by capturing a terrorist. Both private and public schools take money from people before they educate children. Not all public schools are bad. One of my kids is in a private Montessori school, another is in a charter Montessori school (publicly controlled and funded by property taxes). Both are damned good schools. (I just found out 3 hours ago that the charter school’s lottery last night put my seconds son second on the waiting list for next year. Good news!)

We both agree that private organizations generally do it more efficiently, but both create value. And I’m not aware of any evidence that the government creates no value regarding its legal and military actions. And I’m not aware of any good proposal for anyone else to do it.

elfman on April 27, 2010 at 11:41 AM