It’s the economy, stupid.

You probably are old enough to remember the comment then-governor of Arkansas Bill Clinton made on why President Bush should be removed from office and he placed in his stead. The economy was lagging, at least a little bit. Bill Clinton said to the American public, “It’s the economy, stupid.”

Not only did he insult every American citizen (calling them stupid for thinking anything but the economy was important) but he made a point that the only political issue worth discussing was the economy.

I too believe the economy is terribly important. How else can I feed and clothe my family except I am given the means to do so? And what other means is there than the economy?

Because of the importance of the economy, I wish to explain a few, basic principles.

First, what is wealth? Wealth is an accumulation of value. What is value? It is in the eyes of the beholder. I value things like healthy food, good clothing, a warm home, and quiet time in the evening. If I have a lot of those things, I feel wealthy.

Notice that nowhere in discussing wealth and value did I talk about money. Nobody wants money, except as a means to obtain the things they really want. That is, we do not work 40 hours a week so we can get a few pieces of paper. We do it so that we can get a few pieces of paper that can be used to buy real things and services that we want and need.

Now, how is wealth created? Can wealth be created at all? A Marxist believes wealth is not created. They believe that what you have is what you have and there is no more. In a way, that is true. But wealth is not possessions. It is an accumulation of value. That is, it is having things that are valued by their owner.

Let me put it another way. A grocery store full of food is useless for the people who are not hungry. It is also useless for the owners of that store. They couldn’t eat all that food in ten years. Most of it would spoil before they had a chance to eat it. They probably don’t want cans of beans anyway. Maybe they want something else, like a gourmet spaghetti meal. However, if we took all that food in the store and gave it to those who wanted it most, all of a sudden, it would be much more valuable, and everyone would be more wealthy.

This is where capitalism comes in. To a degree, Marxists realize the above fact, although they don’t understand the implications of it. Capitalism is a system whereby people are allowed to trade what they have with whomever they wish for whatever they want. It is a system where there are solid property rights–the rights to do with what you own as you see fit. It is a system where there are solid contract rights–the rights to enter into any kind of agreement with whomever they wish, provided the other person is also willing.

Capitalism is the only system that respects individuals as intelligent, proactive, and responsible. It is the only system that treats humans with respect. All other systems try to say that people are incapable of entering into fair contracts with each other, and incapable of using their property appropriately. Think about it. When someone comes and tells you what you have to do, that’s pretty rude. It’s rude because they think they know more than you and you are too dumb to figure things out for yourself.

Now, within a capitalist system, I want you to take two individuals who enter into any agreement with each other. Both sides enter into the agreement because they think they are getting a better deal by doing so than not. You go to a garage sale, for instance, and buy some nick-nacks for dirt cheap. You are pretty proud of yourself because you just made the deal of a century. Meanwhile, the person who sold the stuff to you thinks you just paid good money for some of their old junk. They are probably wondering why anyone would pay so much for such worthless junk. Both of you walk away with something more than you had when you started. Both of you created wealth from thin air!

Now, multiply the above action by 300 million by 300 million. And multiply that by the number of times you make a trade each year. And multiply that by how much more value you walked away with than you went in with. That’s a whole heckuva lotta value!

That’s our economy.

I don’t need to tell you the benefits of a good economy. Suffice it to say, that everybody, even the poor, win when we have a good economy. Sure, some win more than others, but we all win together. When the economy is poor, people aren’t making as many deals, and those deals aren’t as beneficial. This is bad news for everyone. Everyone, especially the rich, get hurt in a bad economy.

What can we do to make a good economy?

Why, for starters, you can go out there and create as much wealth as you possible can. If you are making good deals, a lot of good deals, everyday, that means the economy is doing pretty good. And don’t just think of the benefits for yourself–think of the benefits for everyone you traded with to get there. I like to think of Bill Gates, who is extremely rich. How much money did Bill Gates steal? How many copies of Windows did he sell with the threat of physical violence? Rather, think of how many people willing gave Bill Gates their money so that they could use his software. Bill Gates made a lot of money, but so did everyone who got pretty decent software for cheap. Bill Gates is rich, but he made a lot of others richer too. He created billions of dollars of wealth for himself, but he also made billions of dollars of wealth for others as well.

Another thing you can do is to stay out of other’s business, except where you can create wealth by doing so. If you’re not invited, don’t attend, in other words. When you interfere where you are not wanted, you are destroying wealth. Let’s say a particularly rude mother-in-law demanded that a man buy a new minivan for his wife. Well, he thinks, I don’t want a minivan and neither does she. If she were to use every force of her will to cause him to buy that minivan, and he did, that would be a very bad thing. Afterwards, he is going to regret it. “I don’t want this minivan, and I wasted good money I could’ve used for something else buying it.” That is bad news, not just for him, but for the car dealer as well. Perhaps they could have done better to sell it to a more willing couple.

When you force people to do things they do not want to do, you are destroying wealth that could have been created had you stayed away. Capitalism depends on people having liberty to choose for themselves. It can work no other way. If you want to “force” capitalism on people, you do so by removing all constraints that cause them to do things they really don’t want to do. In other words, capitalism is the same as liberty and freedom.

Every other system is imposed on a people by limiting what they are allowed to do or forcing them to do things they don’t want to do. Every other system is against liberty. In other words, no other economic system but capitalism has liberty as its foundation.

I hope you understand the implications of what I just said. The implication is this:

All governments act by force when they act.
Acting by force destroys wealth.
Therefore, all governments destroy wealth when they act.

Let me repeat it:

Governments destroy wealth when they act.

This is the logical conclusion of the above. You cannot deny the conclusion without disproving one or both of the premises, or show that the two premises do not lead to the conclusion.

So, it is in our best interests to keep government from acting.

Now, I can argue quite effectively that we need governments to do some kind of acting, otherwise capitalism is impossible. For instance, we need to protect ourselves from those who would impose themselves on others and who would limit people’s freedoms. We must protect ourselves from these threats, whether external or internal, or we can’t have liberty at all.

I can write a list of things the governments must do in order to ensure that there is even liberty to begin with. In short, they must

  1. provide for the common defense against aggressors, foreign and domestic,
  2. provide a set of laws that when followed ensure that no one is acted upon, but is free to choose for themselves, and
  3. enforce those laws.

Governments may also provide a system of arbitration between two parties, but it can be shown that this is not strictly necessary.

Notice that it doesn’t take much government action to do the above. (1) requires a military and perhaps the occasional war. During these times, it is an all-or-nothing game. We either win the war or we give up on liberty altogether. Defeat means we have no liberty. (2) requires that we write a set of fair laws, and ensure that any inconsistencies or unfairness is repaired when discovered. This is a fairly simple thing to do. (3) requires police men, courts, judges, lawyers, and jails. It is probably the most difficult piece to get right of all three.

Our Founding Fathers tried desperately to setup a perpetuating system that did the above three and only the above three. They tried desperately to do it without imposing mandatory taxes. Unfortunately, they failed in both counts.

As far as taxation, it turns out that they need to be collected and they need to be collected by force. The problem with that is that taxes are extremely harmful to the economy. Taxes are so devastating that adjusting them by a few percentage points can destroy it or resurrect it in a matter of years.

As far as a perpetuating system that doesn’t do anything more than the above three roles, they failed as well. It became quickly apparent that no matter how much care and thought went into creating a government, inevitably it becomes corrupted, in a matter of years if not months. Therefore, they tried to create a system of eternal rebellion, where the people continually throw off the old, corrupt government and replace it with something new. We call these elections. It is important that we embrace the tradition of throwing off corruption and bringing in new blood, and that we do it as often as possible.

This is the only way we can keep government out of our business. With government out of our business, we are ensured that we have an economy that is strong and creates wealth.

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8 Responses to “It’s the economy, stupid.”

  1. Secular Communities Says:

    I came here by Googling “It’s the economy, stupid”. I wasn’t actually expecting to come across such a stupid article, which might make the false presumption that Bill was actually calling Americans stupid. :-\ I never cared for Bill, but I don’t lie about people, like you apparently do. Either you made no attempt to discover how the slogan came to exist, or you are a blatant liar. When I criticize the Clintons, I do so honestly. There are plenty of honest criticisms to use against them.

    The slogan was a talking point for Bill’s campaigning. Everything DOES revolve around the economy, in a capitalistic society. “Follow the money.” Also, your criticism sounds like political correctness. IF Americans were dumb enough to fail to understand that it IS all about the economy (for the average person), then they would have deserved to be called “stupid” – even when that’s not the intent. Cut out the political correctness, right?

    Furthermore, your 3-point argument sounds as eerily invalid as the Kalam Cosmological Argument. It did not follow sound logic. You stated:

    1) All governments act by force when they act.
    2) Acting by force destroys wealth.
    3) Therefore, all governments destroy wealth when they act.

    Foregone conclusion: “a conclusion that has preceded argument or examination.”

    It sounds as if you wrote this article with your three foregone conclusions in mind. You seem to have determined this position before you ever began writing this post, since you wrote everything so black-and-white, as though everything written here were inherently true. It’s actually a very poor piece – hopefully, no one actually relied on you writing this.

    ===

    1) The problem with your opening point is stated as a foregone conclusion, which is not necessarily valid. A democratic government (even in a Federal Republic) is a government “by the people, for the people”. On the one hand, you could argue that this is an elected version of “mob rule”. On the other hand, if the people wanted a different form of government, it would be within the collective right to change it. Nowadays, they would just need to get past the corporate special interests, in order to do so.

    2) Your second point is also a foregone conclusion. Acting by force does not, necessarily, destroy wealth. If a person is delusional, and trapped within a social mental illness (be it Capitalism or Shari’a Law), then forcing a person into other settings, which causes them to open their mind, and that they come to appreciate – has INCREASED wealth, as you defined it (something of value).

    – Since you talked about “property rights” and made the claim in point #2 that “acting by force destroy wealth”, this would be a good time to mention that, when the Union acted by force to free the slaves held by the Confederates, they WERE “acting by force”, and the result is that wealth was extended to blacks, who were “property” to their Confederate Dixiecrats.

    3) Your conclusion is built upon two false premises. That’s not to say that your conclusion is wrong, but your conclusion can not be substantiated by your argument. Your piece was too weak to support your points, and your conclusion was determined by your weak points. But, just because your conclusion isn’t inherently wrong, also doesn’t mean that it is correct.

    ===

    In fact, I’d argue that your conclusion actually IS wrong, because it’s missing the point of the purpose of government. Governments govern. The purpose is supposed to ensure that people aren’t screwing each other over. The lack of governmental oversight is called anarchy. Go ask Somalians how anarchy worked out for them. In the absence of government, people naturally organize and recreate government – just like packs of wolves, who organize for the sake of the collective survival and proliferation.

    Whether seen through the lens of natural instincts, or seen through the lens of civilized societies, I would argue that government is an inherent good, but could be collectively destructive, if the action it takes is worse than the state it existed prior.

    I don’t know if all of my reasoning is absolutely sound, but it sure beats this crap you posted.

    • Jonathan Gardner Says:

      You take a lot of space to say remarkably little.

      RE civil war, abolishment of slavery: The actions of the North was to END the actions of the governments of the South. They imposed slavery upon the slaves by force, and the North opposed the opposition.

      RE government using force to do good: You’ll note that that’s not how government works. Say I, a private citizen, see someone who is about to commit suicide by jumping off a bridge. I run over and grab him and throw him to the ground, saving his life. I can act like that knowing that a little bit of force is justified given the circumstances. Do you think government could really do the same? How would government do it? The best I can think of is saying, “When someone acts to save a life, they should not be held accountable for incidental things like assault and such.” Otherwise, I can only imagine government taking money from someone, hiring someone to stand watch on the bridge, of some other such nonsense.

      In a truly free society, government doesn’t do anything. If all men were angels, after all, no government would be needed. Government in a free society would exist to merely prevent another government from filling a void. In short, the response to all requests for interference would be met with, “No.” The only case where government could act was when private citizens could no longer assert their own rights and protect themselves, for instance, if a gang formed or if some other government decided to exert itself upon our people. The proper course of action would be to end the aggression, like in the case of slavery. The way the government would act was not by force but by persuasion, persuading men to flock to the colors and serve in the military, persuading men to shoot the enemy, etc… When a government does use force, it should be exceedingly careful it is not exceeding its bounds, and it should always question whether there was a better way.

    • Chris Says:

      I should print this and read it every day as a reminder of the idiocy in this country. Did you have to get a student load to learn that left wing socialist fanaticism? If so, it was a waste of good money.

      The government should deal with interstate trade, foreign trade deals and protecting its citizens from other countries… and very little else. A government can’t do much to help an economy but it can do a great deal to harm one by doing things such as imposing taxes and tariffs that unfairly target groups. For example, in the mid 1800s, there were huge taxes levied on tobacco and cotton that only hurt the southern states.

  2. Socialist Humanist Says:

    @Chris: That was done intentionally, to hurt the Southern States. You precede “the mid-1800s” with “unfairly target groups” line. I’m so sorry the damned Confederate trash, warring for their States’ rights (to own slaves, et al) we so “unfair” to you… haha. Lincoln should’ve listened to the Radical Republicans – he was too much of a Moderate. The Radicals would’ve metaphorically strung the Confederate trash up by their toes – wanted to take away slave-owners’ land, and give it to the slaves. Wanted to take away their slave-owners’ right to vote, and give slaves the right to vote, instead. Moderate Lincoln was too weak to even ensure ex-slaves could vote. He failed his shot at reparations. He should’ve used the Radicals’ ideas, and then some. Would it have been struck down by the Supreme Court? Sure, probably – but not until more harm could’ve been done to the Confederates.

  3. DALCIO M. C. MARCAL Says:

    Hello, just to want to be sure, but I think there’s a error in the sentence:
    “A grocery store full of food is useless for the people who are hungry. ”

    Wouldn’t be “… people who are NOT hungry”?

    Thanks.

  4. Zeitgeist Says:

    Governement is needed not only to resist external aggression but also to maintain internal law and order as well economic justice or social justice, for example to do trading nd make profits in socially resonsible ways and not by resorting o usary and predatory strategies and tactics or by employing restrictive and monopoly trading practices.

    In the trading grounds its easy for the big fish to eat away the small fish and once the play ground is monopolised then increase the prices and make killing profits at the cost of the consumers . And then to keep all the profits to oneself , distributing it only to the capital invetsos and preferential share holders,without craeting new jobs that are means of livelihood of the middle calss .

    Governement is needed to ensure fair distribution of wealth created as otherwise welath would get accumulated in the hands of a few like it has hapened today creating a vast divide between the rich 1%and the poor 99% . t came about because Governement was hijacked by the military industrial complex who are ruling the nations today usurping seats of democracy eaving the majority in poverty even in the western nations . When people’s governemnt become puppets in the hands of the leviathan business corporations and decme derelict in their duties then this is the ocome. Human greed dominates all human enterprses resulting in wealth accumulation in the hands of about fifty indiiduals who have more wealth with them than the bottom 99% of the peple, an outcome that none wants.

    Without governement acting forcefully to level the playing field the playing fields wont ever become level on its own.

    • Jonathan Gardner Says:

      Government is creating all of the problems you see. Obama and his cronies stole TRILLIONS of dollars from the American people, money meant to help the poor, and now Obama is relaxing on some beach in Tahiti and what did his voters get? Nothing.

      The truth is the only fair system is letting each person pursue their own passions and try to make a living doing it. There is no injustice in someone performing a service for someone else and making money at it, nor is there any injustice in creating new products and selling them and making a profit. Capitalism is the only fair system because it treats all people equally, under the same set of rules.

      Socialism never works. Go look at Venezuela, where they tried to make the system fair but all they ended up doing was making some people incredibly rich and everyone else dirt poor.

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