Monday, March 4, 2013

Economic Sphere Basics

Today is the second anniversary of the beginning of the Spherical Model blog, and we’re doing a recap of the basics of what the Spherical Model is. Friday’s summary covered the principles that lead to the northern freedom zone on the Political Sphere. Today’s summary covers the basic principles leading to the thriving free enterprise zone on the Economic Sphere. (I hope you'll read the full version of each.)

The principles themselves are simple. The preliminary discussion is basic economics, which doesn’t get taught nearly enough in schools. Here are some of the main points:
·        Wealth represents the accumulation of the results of labor.
·        Money is a representative, or symbol, of wealth, to make it easier to exchange.  
·        Problems of the economy as a whole always result from interference in the exchange of labor, or value of money.
·        There has never been a national recession or depression that wasn’t caused by interference with the money supply, or in other words dishonesty about the value of money.
·        Capitalism is a system of increasing productivity, and thereby increasing wealth.
o   Capital is extra time/work/wealth that is invested to make it possible to produce more wealth.
o   Capital in and of itself is simply never evil. Capital might be considered always good. It represents work above and beyond what is essential followed by careful use of it toward a good idea, resulting in even more surplus.
·        Government cannot create wealth; government can only spend it. Government can, however, regulate (that is, make standard) monetary units by coining money, or printing money, each unit of which represents a result of labor that can be exchanged for the results of someone else’s labor.
o   Government can cause harm by printing “money” that does not represent actual wealth.
With these things in mind, how do we identify ways to guarantee thriving free enterprise? Limit government to its proper role: protecting people and their property (wealth), and guaranteeing the value of the money. Maybe add to that some infrastructure to help facilitate commerce, and that’s about it. Every intervention by government to redistribute from those who have to those who have not causes unintended consequences that make things worse both for those being taken from and those being given to.
Capital is taken that could have been used for productive purposes, possibly that could have provided employment for those in need. Incentive is taken from those who would have freely given to the needy, taking their surplus so that they can’t decide to give, and making them resentful that they had no choice about the confiscation. And the receivers of government largesse feel entitled to the redistribution, since the faceless government, rather than a neighbor who did the earning of the wealth, has decided they deserve it. They are therefore ungrateful. If there had been a personal connection between willing giver and reluctant but grateful receiver, both could have benefitted and moved forward in a positive relationship.
The way to limit government is to recognize God-given rights and never allow government to usurp power over those things. That requires political freedom instead of tyranny, so you can see how free-enterprise overlays freedom in the north and controlled economy overlays tyranny in the southern hemisphere.
So freedom and economic thriving both require knowing what a right is. The Constitution, again, is handy for that. The first Ten Amendments were not an afterthought; they were understood clearly by the founders, so much so that they went without saying. But then some of the wiser ones wondered what would happen if these rights didn’t remain self-evident. So they were included before the Constitution was ratified.
They are in a way “negative rights”: God has given these to all men, and government shall not infringe upon them. Government, in other words, is limited, while the individual, in regard to rights, is not.
Then along come the “progressives,” who start talking about “positive rights,” things they think every person ought to have, and therefore government should have the ability to bestow upon them, things like a right to a job (regardless of skills), a right to food, a right to shelter. Are these things rights?
If it is a right, God has given it. But we all come into the world naked, impoverished, and inexperienced. It is by growth, hard work, and gaining in expertise that we try to overcome this condition throughout our life. We are born with the right to life, the right to live free (not enslaved), and the right to pursue our own path to overcome the naked impoverished state.
Do we have a right to clothing? Well, it’s sure nice to have the appropriate clothing when you live through a northern winter. But is it your neighbor’s obligation to work to provide your clothing? Or is that your own obligation? Would it be good of your neighbor to give you his surplus clothing if he saw you were in need? Yes. But his giving it to you is charity, or philanthropy, not an obligation to meet your right. If he had no surplus, but just enough clothing to keep himself from freezing, would it be his obligation to give up a coat to you? No. If he were heroic, he might work out a way to share with you and perhaps keep you both alive. But he is not obligated to do so. So, your clothing is not his obligation. Providing clothing for someone other than self is a charitable act.
At the basic level, the relationship of parent to child is charitable. The parent can clearly see that the child cannot provide his own clothing, so the parent, showing his care for the child, provides that clothing. Same with food. You might even say that the parent has an obligation to feed, clothe, shelter, and nurture the child, because the parent brought the helpless child into the world and therefore has an obligation to that child. But the obligation isn’t without limit. The parent nurtures the child to be capable of feeding, clothing, and sheltering himself. And then, at that point, the parent no longer has the obligation to provide. If the grown child has lost a job, and has a temporary need for economic help, it might be that the parent could step in and offer food, clothing, and shelter from his surplus (charity). But the parent would have no such obligation to a grown and capable child who lacked means simply because of unwillingness to work for them. And that parent would have absolutely no obligation to provide from his hard-earned supply to a lazy child of the neighbor down the road.
So, even though we need them, we do not have a right to food, clothing, and shelter. Ditto for a furnished apartment, a television, telephone, medical care, air conditioning, or a car. Nice to have. Important to have. Maybe even necessary to have in order to fulfill one’s purposes in life. But it is a capable person’s own obligation to work to provide these necessities for himself.
In a civilized society, there will be a desire to somehow provide these necessities to those who are not capable of taking care of themselves: the impoverished because of illness, accident, injury, or lowered mental capacity. But it is philanthropy that fills the need—not government taking from a producer by force to give to a non-producer.
Economic thriving, then, requires limited government, adherence to laws protecting property, and then a charitable people to care for the truly needy.

No comments:

Post a Comment