Helping the poor is a good aim, but we must not use forceful means (i.e. government programs) to do it.
The following story illustrates why.
Archive for the ‘economy’ Category
helping the poor without harming all
Thursday, May 5th, 2011dispelling a few myths
Tuesday, May 11th, 2010I found this in a comment on youtube:
One negative of capitalism is it requires cyclical consumption, corps have to reproduce the same junk over and over with minor changes just to keep it going.
Another is ‘technological unemployment’, meaning machines take jobs and there are NO replacements. So everyone without work is just supposed to die.
The[se] are INHERENT problems that can not be fixed by changing the curency or controlling the government.
On cyclical consumption: while it does often seem as though this is what’s happening, it doesn’t have to be this way. If we the consumers want a washing machine that just does the job without all the bells and whistles, and lasts a long time, then there’s a market for it and a smart company will produce it — and in so doing outsell the company that’s producing the overfancy hunk of junk. True, there are certain kinds of products — trendy clothing, for example — that do seem to go around and around in circles. But it’s optional to participate in these markets. You can opt out and wear whatever you find at the local rummage sale for 2 bucks, or for Spitalfields Market in London for 2 pounds, like me! The option to not participate in ridiculousness is one part of the wonders of a free society.
On technological unemployment: this reminds me very much of Manna by Marshall Brain. The robots are taking all of our jobs! It does seem plausible on the surface — if all the jobs are done by robots than what’s left for us to do to earn money?
There’s actually nothing to be afraid of; technological unemployment is actually a wonderful thing! It’s one of myavorite things to think about because I get all warm and fuzzy inside. One way to approach this is to look at history. How about the washing machine? At some point in history, it was somebody’s job to wash the clothes. Nowadays it only takes a few minutes to throw them in the washer; so that job is now gone, replaced by laundromat tycoons and good old GE. And yet disaster was averted and those people put out of work have managed to find other jobs. And now everyone’s standard of living has gone up because we are free to, if we wish, use the laundry machine instead of washing by hand. (It’s important that it’s optional to use the laundry machine — to satisfy those that long for a simpler life, of which there are many, we must allow for the fact that sometimes simple manual labor tasks provide for deeply satisfying work. This is part of the argument for low taxes, but I digress.)
How does this work? The reason you’re getting confused is because you’re looking at the economy in a static fashion. As if the demand for goods and services today is roughly the same as what it’ll be in 50 years. However, these things change over time; how many people in the 1890s were employed by Hollywood? What was at that time a futuristic technological luxury is now a commonplace commodity with an entire industry to support it which employs thousands if not millions of people.
Another way to think about it: forget about jobs and money. Just think about a bunch of humans milling about the earth trying to have a good time. In one scenario, some of the humans spend day in and day out as bank tellers: handing people cash and punching some buttons on a computer. Then someone invents the ATM and those humans no longer have to hand people the cash, they are free to do other things (like invent new ATM-like devices! Or take up cricket.) Net, the world is surely better off with the ATM than without, all other things equal.
So fear not! There will be new opportunities for all; and they’ll be more and more creative as technological improvements take care of the less-fun jobs.
save my portfolio
Sunday, May 9th, 2010Will somebody please tell me why this guy is wrong?
Whenever I hear him talk about the fiat monetary system heading for the tubes, I get this incredibly strong urge to go buy more gold. I think I could use some balance in my perspective! What’s the best fundamental, rational argument for why we’re not headed for rampant hyperinflation?
bail out the tax payers
Tuesday, May 4th, 2010He mentions in there this idea of taking the bailout money and using it to end the income tax instead. This peaked my interest, so I went and took a cursory look at the numbers. Here’s what I found out.
In 2009, the income tax raised $915 billion. The bailout funds committed so far are in the vicinity of $3 trillion, with another $8 trillion committed.
We could have bought 3-11 years of no income tax. Just imagine!
we are all traders
Sunday, May 2nd, 2010I was listening to Principles of Economics on Librivox recently and was delighted to hear this little gem:
Man cannot create material things. In the mental and moral world indeed he may produce new ideas; but when he is said to produce material things, he really only produces utilities; or in other words, his efforts and sacrifices result in changing the form or arrangement of matter to adapt it better for the satisfaction of wants. All that he can do in the physical world is either to readjust matter so as to make it more useful, as when he makes a log of wood into a table; or to put it in the way of being made more useful by nature, as when he puts seed where the forces of nature will make it burst out into life.
It is sometimes said that traders do not produce: that while the cabinet-maker produces furniture, the furniture-dealer merely sells what is already produced. But there is no scientific foundation for this distinction. They both produce utilities, and neither of them can do more: the furniture-dealer moves and rearranges matter so as to make it more serviceable than it was before, and the carpenter does nothing more. The sailor or the railway-man who carries coal above ground produces it, just as much as the miner who carries it underground; the dealer in fish helps to move on fish from where it is of comparatively little use to where it is of greater use, and the fisherman does no more.
- Principles of Economics, by Alfred Marshall (public domain)
The full text is available here.