Economics In One Lesson Quotes

When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: ‘Yes, stand a little less between me and the sun.’ It is what every citizen is entitled to ask of his government.

As you grow older, you realize it becomes less important to have more friends and more important to have real ones. People nowadays don't know the true meaning of friendship and loyalty. People always suddenly miss you more once they see how much happier you are without them. Learn the real from the fake....and don't worry about the mistakes you make. There are no mistakes in life, just lessons. The only people worthy to be in your life are the ones that help you through the hard times and laugh with you after the hard times pass.

..either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter. In this way, the supposed miracles of government spending will appear in another light.

Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment. It is the proper sphere of government to create and enforce a framework of law that prohibits force and fraud. But it must refrain from specific economic interventions. Government's main economic function is to encourage and preserve a free market. When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: "Yes, stand a little less between me and the sun." It is what every citizen is entitled to ask of his government.

Spend a few hours every week studying American history, human nature, and economic theory. Start with “Economics in One Lesson.” Then try Keynes. Then Hayek. Then Marx. Then Hegel. Develop a worldview that you can articulate as well as defend. Test your theory with people who disagree with you. Debate. Argue. Adjust your philosophy as necessary.

Everything we get, outside of the free gifts of nature, must in some way be paid for.

Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so- called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that it can continue to pile up debt without ever paying it off, because "we owe it to ourselves.

ECONOMICS IS HAUNTED by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine—the special pleading of selfish interests.

What is put into the hands of B cannot be put into the hands of A.

The notion that we can dismiss the views of all previous thinkers surely leaves no basis for the hope that our own work will prove of any value to others.

This is perhaps as good a place as any to point out that what distinguishes many reformers from those who cannot accept their proposals is not their greater philanthropy, but their greater impatience. The question is not whether we wish to see everybody as well off as possible. Among men of good will such an aim can be taken for granted. The real question concerns the proper means of achieving it. And in trying to answer this we must never lose sight of a few elementary truisms. We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

A little philosophy inclineth men’s minds to atheism, but depth in philosophy bringeth men’s minds about to religion.

private loans will utilize existing resources and capital far better than government loans. Government loans will waste far more capital and resources than private loans. Government loans, in short, as compared with private loans, will reduce production, not increase it.

the larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble.

There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.

all loans, in the eyes of honest borrowers, must eventually he repaid. All credit is debt. Proposals for an increased volume of credit, therefore, are merely another name for proposals for an increased burden of debt. They would seem considerably less inviting if they were habitually referred to by the second name instead of by the first.

Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.

Contrary to a popular impression, profits are achieved not by raising prices, but by introducing economies and efficiencies that cut costs of production.

Today is already the tomorrow which the bad economist yesterday urged us to ignore.

Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.

The ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it.

For every dollar that is spent on the (boondoggle) bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000, 000. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

There is a strange idea abroad, held by all monetary cranks, that credit is something a banker gives to a man. Credit, on the contrary, is something a man already has. He has it, perhaps, because he already has marketable assets of a greater cash value than the loan for which he is asking. Or he has it because his character and past record have earned it. He brings it into the bank with him. That is why the banker makes him the loan. The banker is not giving something for nothing.

There is actually no limit to the amount of work to be done. Work creates work. What A produces constitutes the demand for what B produces.

there is a decisive difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds.

Real wealth, of course, consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in.

It is significant that while there is a word "profiteer" to stigmatize those who make allegedly excessive profits, there is no such word as "wageer" - or "losseer.

need is not demand. Effective economic demand requires not merely need but corresponding purchasing power.

Everywhere the means is erected into the end, and the end itself is forgotten.

Saving” in short, in the modern world, is only another form of spending.

We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.

That there might be any practical divergence between my mother’s situation and her own did not seem to occur to Aimee, and this was one of my earliest lessons in her way of viewing the differences between people, which were never structural or economic but always essentially differences of personality.

The most enduring lesson of the Cuban missile crisis is that, in a world with nuclear weapons, a classic military victory is an illusion. Communism was not defeated militarily; it was defeated economically, culturally, and ideologically. Khrushchev’s successors were unable to provide their own people with a basic level of material prosperity and spiritual fulfillment. They lost the war of ideas. In the end, as I have argued in Down with Big Brother: The Fall of the Soviet Empire, communism defeated itself.

(1) he will use the extra profits to expand his operations by buying more machines to make more coats; or (2) he will invest the extra profits in some other industry; or (3) he will spend the extra profits on increasing his own consumption. Whichever of these three courses he takes, he will increase employment.

You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.

They might add that monotheism is a political and psychological ideology as well as a religious one, and that the old economic lesson that one-crop economies generally fare poorly also applies to the spiritual realm.

Necessary policemen, firemen, street cleaners, health officers, judges, legislators and executives perform productive services as important as those of anyone in private industry. They make it possible for private industry to function in an atmosphere of law, order, freedom and peace. But their justification consists in the utility of their services. It does not consist in the "purchasing power" they possess by virtue of being on the public payroll.

The function of profits, finally, is to put constant and unremitting pressure on the head of every competitive business to introduce further economies and efficiencies, no matter to what stage these may already have been brought.

people are becoming aware that government has nothing to give them without first taking it away from somebody else—or from themselves. Increased handouts to selected groups mean merely increased taxes, or increased deficits and increased inflation.

Many of the most frequent fallacies in economic reasoning come from the propensity, especially marked today, to think in terms of an abstraction—the collectivity, the “nation”—and to forget or ignore the individuals who make it up and give it meaning.

when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital.

I can imagine my conservative friends crying foul, saying that I am too harsh and bitter, that Trump’s election was not simply about race and that economics were more important, and they would be genuinely sincere. But sincerity can often be a mask for cruelty, especially the cruelty of conscious disavowal. To agree with me entails much more than condemning Trump. It necessitates an honest confrontation with and condemnation of one’s complicity with a way of life that insists that some people matter more than others and with a society organized to reflect that belief.

Beauty, “in the form of cosmetics products and cosmetic surgery,” researcher Sharon Heijin Lee writes, “is one of [Korea’s] most profitable export industries, even economically outpacing its manufacturing and shipbuilding industries, the two industries upon which the Korean economy was first built.

the real causes of any existing depression. For the real causes, most of the time, are maladjustments within the wage-cost-price structure: maladjustments between wages and prices, between prices of raw materials and prices of finished goods, or between one price and another or one wage and another.

the belief that public works necessarily create new jobs is false. If the money was raised by taxation, we saw, then for every dollar that the government spent on public works one less dollar was spent by the taxpayers to meet their own wants, and for every public job created one private job was destroyed.

In an exchange economy everybody’s money income is somebody else’s cost. Every increase in hourly wages, unless or until compensated by an equal increase in hourly productivity, is an increase in costs of production. An increase in costs of production, where the government controls prices and forbids any price increase, takes the profit from marginal producers, forces them out of business, means a shrinkage in production and a growth in unemployment. Even where a price increase is possible, the higher price discourages buyers, shrinks the market, and also leads to unemployment. If a 30 percent increase in hourly wages all around the circle forces a 30 percent increase in prices, labor can buy no more of the product than it could at the beginning; and the merry-go-round must start all over again.

One of the worst results of the retention of the Keynesian myths is that it not only promotes greater and greater inflation, but that it systematically diverts attention from the real causes of our unemployment, such as excessive union wage-rates, minimum wage laws, excessive and prolonged unemployment insurance, and overgenerous relief payments.

THE WHOLE ARGUMENT of this book may be summed up in the statement that in studying the effects of any given economic proposal we must trace not merely the immediate results but the results in the long run, not merely the primary consequences but the secondary consequences, and not merely the effects on some special group but the effects on everyone.

In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.

It is often sadly remarked that the bad economists present their errors to the public better than the good economists present their truths.

The best wage rates for labor are not the highest wage rates, but the wage rates that permit full production, full employment and the largest sustained payrolls.

Rent control, however, encourages wasteful use of space.

So the government launches on a gigantic housing program—at the taxpayers’ expense.

either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation.

It is exports that pay for imports, and vice versa. The greater exports we have, the greater imports we must have, if we ever expect to get paid.

what is really being lent is not money, which is merely the medium of exchange, but capital.

one occupation can expand only at the expense of all other occupations.

Prices are determined by supply and demand, and demand is determined by how intensely people want a commodity and what they have to offer in exchange for it.

What a commodity has cost to produce in the past cannot determine its value. That will depend on the present relationship of supply and demand.

They tell us how much better off economically we all are in war than in peace.

No man burns down his own house on the theory that the need to rebuild it will stimulate his energies.

Full employment—very full employment; long, weary, back-breaking employment—is characteristic of precisely the nations that are most retarded industrially.

Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay.

The crucial lesson of Brexit and of Trump's victory, is that leaders who are seen as representing the failed neoliberal status quo are no match for the demagogues and neo-fascists. Only a bold and genuinely redistributive progressive agenda can offer real answers to inequality and the crises in democracy...We need to remember this the next time we're asked to back a party or candidate in an election. In this destabilized era, status-quo politicians often cannot get the job done. On the other hand, the choice that may at first seem radical, maybe even a little risky, may well be the most pragmatic one in this volatile era...radical political and economic change is our only hope of avoiding radical change to our physical world.

For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies. Leave men free, and their natural inequalities will multiply almost geometrically, as in England and America in the nineteenth century under laissez-faire. To check the growth of inequality, liberty must be sacrificed, as in Russia after 1917. Even when repressed, inequality grows; only the man who is below the average in economic ability desires equality; those who are conscious of superior ability desire freedom; and in the end superior ability has its way.

It is actually a rather sorry tale. In the late nineteenth century most English economists thought that economics was about happiness. They thought of a persons happiness as in principle measurable, like temperature, and they thought we could compare one persons happiness with anothers. They also assumed that extra income brought less and less extra happiness as a person got richer.

there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.

Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment—whether in the form of machines, factories or office buildings—cannot yield an adequate return and loses the greater part of its value.

Imagine a world where you could gain more knowledge by reading fewer books, see more of the world by minimizing travel and get more fit by doing less exercise. Certainly, a world where doing less gets you more is highly inconsistent with much of our lived experience, but is just the way Wall Street Bizarro World operates. If we are to learn to live in WSBW (and we must), one of the primary lessons to be learned is to do less than we think we should.

There is no more certain way to deter employment than to harass and penalize employers. There is no more certain way to keep wages low than to destroy every incentive to investment in new and more efficient machines and equipment.

If, therefore, the X industry is driven out of existence by a minimum wage law, then the workers previously employed in that industry will be forced to turn to alternative courses that seemed less attractive to them in the first place.

While a good story must give me a role, and must extend beyond my horizons, it need not be true. A story can be pure fiction, and yet provide me with an identity and make me feel that my life has meaning. Indeed, to the best of our scientific understanding, none of the thousands of stories that different cultures, religions and tribes have invented throughout history is true. They are all just human inventions. If you ask for the true meaning of life and get a story in reply, know that this is the wrong answer. The exact details don’t really matter. Any story is wrong, simply for being a story. The universe just does not work like a story. So why do people believe in these fictions? One reason is that their personal identity is built on the story. People are taught to believe in the story from early childhood. They hear it from their parents, their teachers, their neighbours and the general culture long before they develop the intellectual and emotional independence necessary to question and verify such stories. By the time their intellect matures, they are so heavily invested in the story, that they are far more likely to use their intellect to rationalise the story than to doubt it. Most people who go on identity quests are like children going treasure hunting. They find only what their parents have hidden for them in advance. Second, not only our personal identities but also our collective institutions are built on the story. Consequently, it is extremely frightening to doubt the story. In many societies, anyone who tries to do so is ostracised or persecuted. Even if not, it takes strong nerves to question the very fabric of society. For if indeed the story is false, then the entire world as we know it makes no sense. State laws, social norms, economic institutions – they might all collapse.

If we look at it now from the consumer’s point of view, we find that he can buy less with his money. Because he has to pay more for sweaters and other protected goods, he can buy less of everything else. The general purchasing power of his income has therefore been reduced.

In 1939 war was probably a counterproductive move for the Axis powers – yet it did not save the world. One of the astounding things about the Second World War is that following the war the defeated powers prospered as never before. Twenty years after the complete annihilation of their armies and the utter collapse of their empires, Germans, Italians and Japanese were enjoying unprecedented levels of affluence. Why, then, did they go to war in the first place? Why did they inflict unnecessary death and destruction on countless millions? It was all just a stupid miscalculation. In the 1930s Japanese generals, admirals, economists and journalists concurred that without control of Korea, Manchuria and the Chinese coast, Japan was doomed to economic stagnation.8 They were all wrong. In fact, the famed Japanese economic miracle began only after Japan lost all its mainland conquests.

Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies. Leave men free, and their natural inequalities will multiply almost geometrically, as in England and America in the nineteenth century under laissez-faire. To check the growth of inequality, liberty must be sacrificed, as in Russia after 1917. Even when repressed, inequality grows; only the man who is below the average in economic ability desires equality; those who are conscious of superior ability desire freedom; and in the end superior ability has its way.

The first thing that happens, for example, when a law is passed that no one shall be paid less than $106 for a forty-hour week is that no one who is not worth $106 a week to an employer will be employed at all. You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.

Up to a certain point it is necessary to produce shoes. But it is also necessary to produce coats, shirts, trousers, homes, plows, shovels, factories, bridges, milk and bread. It would be idiotic to go on piling up mountains of surplus shoes, simply because we could do it, while hundreds of more urgent needs went unfilled.

But men in their role of taxpayers will be subsidizing themselves in their role of consumers. It becomes a little difficult to trace in this maze precisely who is subsidizing whom. What is forgotten is that subsidies are paid for by someone, and that no method has been discovered by which the community gets something for nothing.

The liberal story cherishes human liberty as its number one value. It argues that all authority ultimately stems from the free will of individual humans, as it is expressed in their feelings, desires and choices. In politics, liberalism believes that the voter knows best. It therefore upholds democratic elections. In economics, liberalism maintains that the customer is always right. It therefore hails free-market principles. In personal matters, liberalism encourages people to listen to themselves, be true to themselves, and follow their hearts – as long as they do not infringe on the liberties of others. This personal freedom is enshrined in human rights.

We shall then have a situation in which the cost of living has risen by an average of 25 percent. The farm hands, though they have had no reduction in their money wages, will be considerably worse off in terms of what they can buy. The retail store workers, even though they have got an increase in money wages of 10 percent, will be worse off than before the race began. Even the workers in the clothing trades, with a money-wage increase of 20 percent, will be at a disadvantage compared with their previous position. The coal miners, with a money-wage increase of 30 percent, will have made in purchasing power only a slight gain. The building and railroad workers will of course have made a gain, but one much smaller in actuality than in appearance.

New Rule: Americans must realize what makes NFL football so great: socialism. That's right, the NFL takes money from the rich teams and gives it to the poorer one...just like President Obama wants to do with his secret army of ACORN volunteers. Green Bay, Wisconsin, has a population of one hundred thousand. Yet this sleepy little town on the banks of the Fuck-if-I-know River has just as much of a chance of making it to the Super Bowl as the New York Jets--who next year need to just shut the hell up and play. Now, me personally, I haven't watched a Super Bowl since 2004, when Janet Jackson's nipple popped out during halftime. and that split-second glimpse of an unrestrained black titty burned by eyes and offended me as a Christian. But I get it--who doesn't love the spectacle of juiced-up millionaires giving one another brain damage on a giant flatscreen TV with a picture so real it feels like Ben Roethlisberger is in your living room, grabbing your sister? It's no surprise that some one hundred million Americans will watch the Super Bowl--that's forty million more than go to church on Christmas--suck on that, Jesus! It's also eighty-five million more than watched the last game of the World Series, and in that is an economic lesson for America. Because football is built on an economic model of fairness and opportunity, and baseball is built on a model where the rich almost always win and the poor usually have no chance. The World Series is like The Real Housewives of Beverly Hills. You have to be a rich bitch just to play. The Super Bowl is like Tila Tequila. Anyone can get in. Or to put it another way, football is more like the Democratic philosophy. Democrats don't want to eliminate capitalism or competition, but they'd like it if some kids didn't have to go to a crummy school in a rotten neighborhood while others get to go to a great school and their dad gets them into Harvard. Because when that happens, "achieving the American dream" is easy for some and just a fantasy for others. That's why the NFL literally shares the wealth--TV is their biggest source of revenue, and they put all of it in a big commie pot and split it thirty-two ways. Because they don't want anyone to fall too far behind. That's why the team that wins the Super Bowl picks last in the next draft. Or what the Republicans would call "punishing success." Baseball, on the other hand, is exactly like the Republicans, and I don't just mean it's incredibly boring. I mean their economic theory is every man for himself. The small-market Pittsburgh Steelers go to the Super Bowl more than anybody--but the Pittsburgh Pirates? Levi Johnston has sperm that will not grow and live long enough to see the Pirates in a World Series. Their payroll is $40 million; the Yankees' is $206 million. The Pirates have about as much chance as getting in the playoffs as a poor black teenager from Newark has of becoming the CEO of Halliburton. So you kind of have to laugh--the same angry white males who hate Obama because he's "redistributing wealth" just love football, a sport that succeeds economically because it does just that. To them, the NFL is as American as hot dogs, Chevrolet, apple pie, and a second, giant helping of apple pie.

Another lesson is that it’s not just our own communities that reinforce the outsider attitude, it’s the places and people that upward mobility connects us with—like my professor who suggested that Yale Law School shouldn’t accept applicants from non-prestigious state schools. There’s no way to quantify how these attitudes affect the working class. We do know that working-class Americans aren’t just less likely to climb the economic ladder, they’re also more likely to fall off even after they’ve reached the top. I imagine that the discomfort they feel at leaving behind much of their identity plays at least a small role in this problem. One way our upper class can promote upward mobility, then, is not only by pushing wise public policies but by opening their hearts and minds to the newcomers who don’t quite belong.

In the euphoria of victory, Nazis tried to organize a boycott of Jewish shops. This was not very successful at first. But the practice of marking one firm as “Jewish” and another as “Aryan” with paint on the windows or walls did affect the way Germans thought about household economics. A shop marked “Jewish” had no future. It became an object of covetous plans. As property was marked as ethnic, envy transformed ethics. If shops could be “Jewish,” what about other companies and properties? The wish that Jews might disappear, perhaps suppressed at first, rose as it was leavened by greed. Thus the Germans who marked shops as “Jewish” participated in the process by which Jews really did disappear—as did people who simply looked on. Accepting the markings as a natural part of the urban landscape was already a compromise with a murderous future. You

For it is the very commodities selected for maximum price-fixing that the regulators most want to keep in abundant supply. But when they limit the wages and the profits of those who make these commodities, without also limiting the wages and profits of those who make luxuries or semiluxuries, they discourage the production of the price-controlled necessities while they relatively stimulate the production of less essential goods.

Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible. In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of man to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.

Now few people recognize the necessary implications of the economic statements they are constantly making. When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides. When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker. When they say that the way to national wealth is to pay out governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes. When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports. When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production.

It should be immediately clear that this could be brought about more directly and honestly by a reduction in unworkable wage rates. But the more sophisticated proponents of inflation believe that this is now politically impossible. Sometimes they go further, and charge that all proposals under any circumstances to reduce particular wage rates directly in order to reduce unemployment are “antilabor.” But what they are themselves proposing, stated in bald terms, is to deceive labor by reducing real wage rates (that is, wage rates in terms of purchasing power) through an increase in prices.

...Now let's set the record straight. There's no argument over the choice between peace and war, but there's only one guaranteed way you can have peace—and you can have it in the next second—surrender. Admittedly, there's a risk in any course we follow other than this, but every lesson of history tells us that the greater risk lies in appeasement, and this is the specter our well-meaning liberal friends refuse to face—that their policy of accommodation is appeasement, and it gives no choice between peace and war, only between fight or surrender. If we continue to accommodate, continue to back and retreat, eventually we have to face the final demand—the ultimatum. And what then—when Nikita Khrushchev has told his people he knows what our answer will be? He has told them that we're retreating under the pressure of the Cold War, and someday when the time comes to deliver the final ultimatum, our surrender will be voluntary, because by that time we will have been weakened from within spiritually, morally, and economically. He believes this because from our side he's heard voices pleading for "peace at any price" or "better Red than dead," or as one commentator put it, he'd rather "live on his knees than die on his feet." And therein lies the road to war, because those voices don't speak for the rest of us. You and I know and do not believe that life is so dear and peace so sweet as to be purchased at the price of chains and slavery. If nothing in life is worth dying for, when did this begin—just in the face of this enemy? Or should Moses have told the children of Israel to live in slavery under the pharaohs? Should Christ have refused the cross? Should the patriots at Concord Bridge have thrown down their guns and refused to fire the shot heard 'round the world? The martyrs of history were not fools, and our honored dead who gave their lives to stop the advance of the Nazis didn't die in vain. Where, then, is the road to peace? Well it's a simple answer after all. You and I have the courage to say to our enemies, "There is a price we will not pay." "There is a point beyond which they must not advance." And this—this is the meaning in the phrase of Barry Goldwater's "peace through strength." Winston Churchill said, "The destiny of man is not measured by material computations. When great forces are on the move in the world, we learn we're spirits—not animals." And he said, "There's something going on in time and space, and beyond time and space, which, whether we like it or not, spells duty." You and I have a rendezvous with destiny. We'll preserve for our children this, the last best hope of man on earth, or we'll sentence them to take the last step into a thousand years of darkness...

As automation threatens to shake the capitalist system to its foundation, one might suppose that communism could make a comeback. But communism was not built to exploit that kind of crisis. Twentieth-century communism assumed that the working class was vital for the economy, and communist thinkers tried to teach the proletariat how to translate its immense economic power into political clout. The communist political plan called for a working-class revolution. How relevant will these teachings be if the masses lose their economic value, and therefore need to struggle against irrelevance rather than against exploitation? How do you start a working-class revolution without a working class?

Since The Wealth of Nations appeared more than two centuries ago, the case for free trade has been stated thousands of times, but perhaps never with more direct simplicity and force than it was stated in that volume. In general Smith rested his case on one fundamental proposition: “In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.” “The proposition is so very manifest,” Smith continued, “that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interested sophistry of merchants and manufacturers confounded the common-sense of mankind.” From

The government spenders tell us, for example, that if the national income is $1,500 billion then federal taxes of $360 billion a year would mean that only 24 percent of the national income is being transferred from private purposes to public purposes. This is to talk as if the country were the same sort of unit of pooled resources as a huge corporation, and as if all that were involved were a mere bookkeeping transaction. The government spenders forget that they are taking the money from A in order to pay it to B. Or rather, they know this very well; but while they dilate upon all the benefits of the process to B, and all the wonderful things he will have which he would not have had if the money had not been transferred to him, they forget the effects of the transaction on A. B is seen; A is forgotten. In

No one ever warns you about the complicated and political decisions regarding lessons and classes and sports you’ll have to make when you become a parent. When I was in eighth grade everyone in Home Economics had to care for flour-sack babies for two weeks to teach us about parenting and no one ever mentioned enrolling your flour baby in sports. Basically, everyone got a sealed paper sack of flour that puffed out flour dust whenever you moved it. You were forced to carry it around everywhere because I guess it was supposed to teach you that babies are fragile and also that they leave stains on all of your shirts. At the end of the two weeks your baby was weighed and if it lost too much weight that meant you were too haphazard with it and were not ready to be a parent. It was a fairly unrealistic child-rearing lesson. Basically all we learned about babies in that class was that you could use superglue to seal your baby’s head after you dropped it. And that eighth-grade boys will play keep-away with your baby if they see it so it’s really safer in the trunk of your car. And that you should just wrap your baby up in plastic cling wrap so that its insides don’t explode when it’s rolling around in the trunk on your way home. And also that if you don’t properly store your baby in the freezer your baby will get weevils and then you have to throw your baby in the garbage instead of later making it into a cake that you’ll be graded on. (The next two weeks of class focused on cooking and I used my flour baby to make a pineapple upside-down cake. My baby was delicious. These are the things you never realize are weird until you start writing them down.)

Rather, productivity is about making certain choices in certain ways. The way we choose to see ourselves and frame daily decisions; the stories we tell ourselves, and the easy goals we ignore; the sense of community we build among teammates; the creative cultures we establish as leaders: These are the things that separate the merely busy from the genuinely productive. We now exist in a world where we can communicate with coworkers at any hour, access vital documents over smartphones, learn any fact within seconds, and have almost any product delivered to our doorstep within twenty-four hours. Companies can design gadgets in California, collect orders from customers in Barcelona, email blueprints to Shenzhen, and track deliveries from anywhere on earth. Parents can auto-sync the family’s schedules, pay bills online while lying in bed, and locate the kids’ phones one minute after curfew. We are living through an economic and social revolution that is as profound, in many ways, as the agrarian and industrial revolutions of previous eras. These advances in communications and technology are supposed to make our lives easier. Instead, they often seem to fill our days with more work and stress. In part, that’s because we’ve been paying attention to the wrong innovations. We’ve been staring at the tools of productivity—the gadgets and apps and complicated filing systems for keeping track of various to-do lists—rather than the lessons those technologies are trying to teach us. There are some people, however, who have figured out how to master this changing world. There are some companies that have discovered how to find advantages amid these rapid shifts. We now know how productivity really functions. We know which choices matter most and bring success within closer reach. We know how to set goals that make the audacious achievable; how to reframe situations so that instead of seeing problems, we notice hidden opportunities; how to open our minds to new, creative connections; and how to learn faster by slowing down the data that is speeding past us.

it is not only our values that matter, but the military might that backs them up. Truly, in international affairs, behind all questions of morality lie questions of power. Humanitarian intervention in the Balkans in the 1990s was possible only because the Serbian regime was not a great power armed with nuclear weapons, unlike the Russian regime, which at the same time was committing atrocities of a similar scale in Chechnya where the West did nothing; nor did the West do much against the ethnic cleansing in the Caucasus because there, too, was a Russian sphere of influence. In the Western Pacific in the coming decades, morality may mean giving up some of our most cherished ideals for the sake of stability. How else are we to make at least some room for a quasi-authoritarian China as its military expands? (And barring a social-economic collapse internally, China’s military will keep on expanding.) For it is the balance of power itself, even more than the democratic values of the West, that is often the best preserver of freedom. That also will be a lesson of the South China Sea in the twenty-first century—one more that humanists do not want to hear.

It is often sadly remarked that the bad economists present their errors to the public better than the good economists present their truths. It is often complained that demagogues can be more plausible in putting forward economic nonsense from the platform than the honest men who try to show what is wrong with it. But the basic reason for this ought not to be mysterious. The reason is that the demagogues and bad economists are presenting half-truths. They are speaking only of the immediate effect of a proposed policy or its effect upon a single group. As far as they go they may often be right. In these cases the answer consists in showing that the proposed policy would also have longer and less desirable effects, or that it could benefit one group only at the expense of all other groups. The answer consists in supplementing and correcting the half-truth with the other half. But to consider all the chief effects of a proposed course on everybody often requires a long, complicated, and dull chain of reasoning. Most of the audience finds this chain of reasoning difficult to follow and soon becomes bored and inattentive. The bad economists rationalize this intellectual debility and laziness by assuring the audience that it need not even attempt to follow the reasoning or judge it on its merits because it is only "classicism" or "laissez faire" or "capitalist apologetics" or whatever other term of abuse may happen to strike them as effective.

There is an excellent short book (126 pages) by Faustino Ballvè, Essentials of Economics (Irvington-on-Hudson, N.Y.: Foundation for Economic Education), which briefly summarizes principles and policies. A book that does that at somewhat greater length (327 pages) is Understanding the Dollar Crisis by Percy L. Greaves (Belmont, Mass.: Western Islands, 1973). Bettina Bien Greaves has assembled two volumes of readings on Free Market Economics (Foundation for Economic Education). The reader who aims at a thorough understanding, and feels prepared for it, should next read Human Action by Ludwig von Mises (Chicago: Contemporary Books, 1949, 1966, 907 pages). This book extended the logical unity and precision of economics beyond that of any previous work. A two-volume work written thirteen years after Human Action by a student of Mises is Murray N. Rothbard’s Man, Economy, and State (Mission, Kan.: Sheed, Andrews and McMeel, 1962, 987 pages). This contains much original and penetrating material; its exposition is admirably lucid; and its arrangement makes it in some respects more suitable for textbook use than Mises’ great work. Short books that discuss special economic subjects in a simple way are Planning for Freedom by Ludwig von Mises (South Holland, 111.: Libertarian Press, 1952), and Capitalism and Freedom by Milton Friedman (Chicago: University of Chicago Press, 1962). There is an excellent pamphlet by Murray N. Rothbard, What Has Government Done to Our Money? (Santa Ana, Calif.: Rampart College, 1964, 1974, 62 pages). On the urgent subject of inflation, a book by the present author has recently been published, The Inflation Crisis, and How to Resolve It (New Rochelle, N.Y.: Arlington House, 1978). Among recent works which discuss current ideologies and developments from a point of view similar to that of this volume are the present author’s The Failure of the “New Economics”: An Analysis of the Keynesian Fallacies (Arlington House, 1959); F. A. Hayek, The Road to Serfdom (1945) and the same author’s monumental Constitution of Liberty (Chicago: University of Chicago Press, 1960). Ludwig von Mises’ Socialism: An Economic and Sociological Analysis (London: Jonathan Cape, 1936, 1969) is the most thorough and devastating critique of collectivistic doctrines ever written. The reader should not overlook, of course, Frederic Bastiat’s Economic Sophisms (ca. 1844), and particularly his essay on “What Is Seen and What Is Not Seen.” Those who are interested in working through the economic classics might find it most profitable to do this in the reverse of their historical order. Presented in this order, the chief works to be consulted, with the dates of their first editions, are: Philip Wicksteed, The Common Sense of Political Economy, 1911; John Bates Clark, The Distribution of Wealth, 1899; Eugen von Böhm-Bawerk, The Positive Theory of Capital, 1888; Karl Menger, Principles of Economics, 1871; W. Stanley Jevons, The Theory of Political Economy, 1871; John Stuart Mill, Principles of Political Economy, 1848; David Ricardo, Principles of Political Economy and Taxation, 1817; and Adam Smith, The Wealth of Nations, 1776.

Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned

Ionic is the ‘opposites attract’ chemical bond,” Elizabeth explained as she emerged from behind the counter and began to sketch on an easel. “For instance, let’s say you wrote your PhD thesis on free market economics, but your husband rotates tires for a living. You love each other, but he’s probably not interested in hearing about the invisible hand. And who can blame him, because you know the invisible hand is libertarian garbage.” She looked out at the audience as various people scribbled notes, several of which read “Invisible hand: libertarian garbage.” “The point is, you and your husband are completely different and yet you still have a strong connection. That’s fine. It’s also ionic.” She paused, lifting the sheet of paper over the top of the easel to reveal a fresh page of newsprint. “Or perhaps your marriage is more of a covalent bond,” she said, sketching a new structural formula. “And if so, lucky you, because that means you both have strengths that, when combined, create something even better. For example, when hydrogen and oxygen combine, what do we get? Water—or H2O as it’s more commonly known. In many respects, the covalent bond is not unlike a party—one that’s made better thanks to the pie you made and the wine he brought. Unless you don’t like parties—I don’t—in which case you could also think of the covalent bond as a small European country, say Switzerland. Alps, she quickly wrote on the easel, + a Strong Economy = Everybody Wants to Live There. In a living room in La Jolla, California, three children fought over a toy dump truck, its broken axle lying directly adjacent to a skyscraper of ironing that threatened to topple a small woman, her hair in curlers, a small pad of paper in her hands. Switzerland, she wrote. Move. “That brings us to the third bond,” Elizabeth said, pointing at another set of molecules, “the hydrogen bond—the most fragile, delicate bond of all. I call this the ‘love at first sight’ bond because both parties are drawn to each other based solely on visual information: you like his smile, he likes your hair. But then you talk and discover he’s a closet Nazi and thinks women complain too much. Poof. Just like that the delicate bond is broken. That’s the hydrogen bond for you, ladies—a chemical reminder that if things seem too good to be true, they probably are.” She walked

Growth was so rapid that it took in generations of Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned out badly, you might get shot. Better to avoid all responsibility. An example of what could happen