For many years I’ve been impressed by how little people understand the economy. Most of the folks I’ve talked with in person and observed online have a narrow view of what defines “the economy”, and they miss the importance of what they don’t see.
Let’s start with definitions: Economy is, simply, efficiency. “The Economy”, then, is the efficiency with which scarce goods and services are produced and distributed. That’s it. Everything else people pin on the virtues or evils of a particular set of economic rules is a creation of coercive outside forces. There are a number of natural rules that govern economies, but many people, due to the incomprehensibility of most economists, think they lack the capacity to understand it or have been led to believe it’s boring.
Simply, the economy is everything we create and trade with each other. And a note for those libertarian-haters out there; no libertarian believes they can live totally isolated from the rest of humanity. They understand that we need each other in a society and market in order to fulfill as many human wants and needs as possible. They just don’t think coercion is a good way to get people to work with each other or move the civilization forward. No one person or small group can produce everything they need to live (practically; there are levels of civilization I personally don’t wish to fall below in order to prove a point, but I support the right of those who do, to) so we must rely on the division of labor and other people to make as much stuff for as many of us as the economy can handle. And you can’t rely on the government to protect it, because that’s beyond the depth of a government to handle. There are a number of simple reasons why this is so.
A government cannot manage an economy because it can’t understand or anticipate all of the billions of individual economic decisions made everyday. It’s the reason every command economy in history has failed, one way or another. There is no way for a bureaucracy to react swiftly enough to address the myriad of issues that inevitably arise, or make the calculations of hundreds of millions of individual economic actors better than they themselves. And they can’t print away problems, or offer “economic security” without raiding someone’s coffers because government doesn’t produce anything but bullshit, and everything it has is stolen (apologies to Nietzsche). But it’s true; government only owns buildings on stolen land which it fills with bureaucrats and functionaries paid with stolen money. If they need something built, they contract out to a private company that rips them off and does a shitty job because they (gov’ts) are terrible at economic calculation. It’s a cycle.
Socialism must be enforced. Fascism is forced. Capitalism is free choice. And if what you define as “capitalism” contains any form of coercion, we’re not talking about the same thing. You’re probably talking about corporatism or fascism. I’ll get into more definitions at another time so we’re all on the same page, but here’s what’s important today.
Economic fascism is defined as socializing the costs of a business, as in, taxpayers foot the bill for their mistakes (bailouts), then when things turn around they keep the profits (with some thrown into the campaign coffers of some influential politicians, of course). Any time you hear a politician talking about “public-private partnership” or “investing in emerging technologies” that’s actually the definition of economic fascism. Capitalists do not condone this behavior. Any time we rely on government spending to survive, it’s Monopoly Money (literally; it has no value aside from government promises and we all know what those are worth) and only serves as a bandage over the real problem. Same goes for socialism; if a government takes over an essential business it will never be profitable except by legislative fiat. And that creates all sorts of associated issues because of the economic calculation problem. If you attempt to control prices, output, supply, demand, or manufacturing costs, it will ruin natural regulatory forces and cause malinvestment.
We need as free and open a market to employ as many as possible and serve as many needs as possible. Once we’re back to work we will have the resources to help those less fortunate, as we always have. As a personal note, my goal is to have as many low-effort income streams as I can to pay the bills and allow me to volunteer most of my free time to helping people.
I think it needs to be said:
The stock market isn’t the economy.
Dollars aren’t the economy.
Billionaires aren’t the economy.
Corporate profits aren’t the economy.
Government regulations aren’t the economy.
The Federal Reserve isn’t the economy.
It’s all of us. We are the economy. And we need to be free; it’s the only way out of the mess in which we’re about to find ourselves.
