Monday, July 7, 2014

Wealth is the Product of Freedom--bet on it.

Wealth is the Product of Freedom , Economic Freedom, Almost Every Country with Great Popular Wealth is Populated by Economically Free People What Milton Friedman Really Meant by the Title of His Book 'Freedom to Choose" Lex Loeb Contributor Network . Freedom itself is a form of wealth. People who are most free are most able to generate wealth and sustain it. Detractors of Milton Friedman, Ronald Reagan and so called supply side economics all have one thing in common and that is an over powering desire to prevent other people from making their own choices. They tend to see a possible utopia where big government, bureaucrats academics and prophets make decisions for everyone else based on of higher intelligence, better ideals and of course purity of heart. If not asking people to resign from exercising their liberty they demand it creating prohibitive laws and regulations to debase personal choice and then to coerce individuals to ask or beg for permission to do just about anything imaginable and of course what they could automatically do with liberty. It is strange how people who demand liberty from everyone else now tend to be called Liberals which is a word that describes the liberty to think freely. Almost every country with vast sustainable popular wealth tends to have liberty as the means and incentive work to generate wealth and sustain it. Counties with governments that suppress liberty tend to have little if any popular wealth and if any wealth it will be concentrated in the hands of tyrants. People who will trade away their economic liberty for promises that someone else will take care of them end up not just becoming no better than slaves but actual slaves dependent on having good masters. Trade away your liberty and you become someone Else's property. People high on drugs who like living in an ethereal existence are prone to become believers in letting others usurp their liberty as if because drugged they are free of the concerns of liberty and therefore also free of need of wealth. Those who give up their liberty also are seen to have no interest in wealth. Those offering them Utopian ideals don't usually share any wealth they acquire in the process. Markets and market places often get a bad name as places where common people can only be cheated by market bad guys who control them. That is the Marxist point of view on the subject. Milton Friedman and other proponents of free markets see markets as the only free and open mechanism for free people to come together to communicate so as to benefit by trading goods and services. The mechanism that exists otherwise is government allocation/ re-allocation, out right piracy, stealing which is the same as appropriation and loss. A free market is the best alternative because free people should always be able to find mutually benefit in trading in a market rather than having controlling domineering powers just appropriate goods and services with nothing given in return. Markets maybe imperfect but compared to lack of personal economic freedom to dispose of property with free will and make exchanges as necessary there is only the grim prospect of liberty being taken away along with fruit of one's hard labor. There is no better way to reduce someone to the level of a slave then by taking away liberty. Without liberty one's only wealth is himself and he might as well just belong to the tyrants. Having the freedom to make one's own economic decisions is the first step toward creating wealth. The alternative to liberty is becoming the slave to a state or class of individuals. Surrendering your liberty to use your own labor for your own benefit never is going to really give you a greater share of the wealth of an entire society because once you have given away your economic liberty you are no better than a slave which is someone owned by someone else. Your freedom to choose is quite valuable thus. Your freedom to make your own choices and control your own wealth in a free and open market place will allow you to thrive rather than have you work to keep others claiming to be your masters thriving. Where ever great popular economic freedom is found wealth is almost certain to follow . Exactly the opposite seems to happen where economic freedom is prohibited or lacking.. Great Utopian ideals that restrict private property ownership which the original book called Utopia called for is a very simple way to remove economic liberty from people who had used to own it. Nothing gives people more economic liberty than free and clear property ownership. The difference between two classes in Modern China today are those who were able to retain or acquire private property after communism verses a class of people at the mercy of more powerful people who can remove them from ownership. The well to do Chinese class today has free ownership of private property and economic liberty while a large class of virtual slaves are prevented from having the freedom to own and control post communist private property. The upper class thus has economic freedom and the lower class has quite a bit less bordering on servitude to the rich now land hungry communists. Well to do Chinese merchant class is no different that the average American having the benefits of essentially cheap slave labor provided by the communist party. A billionaire in China can pay an army of thousands of local workers where as a billionaire in the USA has severe limitations on how many local people he or she can hire which is why taking advantage of cheap slave labor in China gratis the communist party makes a heck of a lot of sense not only for the American industrialist billionaire but for all of the American people including the working class. Freedom to choose is an essential right and the kind of economic freedom that will produce wealth rather than reducing one to the level of a slave hired out by a monstrous totalitarian government. The central planning utopia fantasy just will not go away no matter how many times it disastrously fails. Utopia began as a book that sought a similar solution combining Catholic ideology and a strong royal state. The first book called utopia proposed that the common people be free of all private property. That was the Russian formula for serfdom under a different name. In contrast Freedom to make one's own choices creates the maximum number of incentives to do what will produce the most wealth possible. Maximum economic freedom seems to make countries wealthy and the guide to this is the example of comparing places to other places free and less free. You can compare Thailand and Burma and it is clear where the wealth is . You can compare Mexico and Canada and it is clear that where the greater economic freedom is there is more wealth accumulation over all in society. You can compare North and South Korea, Russia as the Soviet Union and Russia after the soviet union. China before economic freedom was allowed and China after. Every year an organization puts out a list of the most free counties of the world and the USA does not come out on top of being the most free because our economic freedoms are undermined by high taxation, double and triple taxation not to mention all sorts of punitive regulations added on to mandatory social contracts which have done much to hold America back from where it could be with more freedom. The United States can't compete with countries as easily as it could if it shared the lack of capital gains taxes which the competition does not have in place. It is like comparing the old Russia with the New except that in America we don't get to see much of a way of making the comparison because we don't ever get a break from the control freak regimes that hinder our economic freedom. We hear it in the debate in state legislatures and in the great budget debate of 2011 in the US congress where the major political parties are always talking about budget shortfalls as if they are entitled to some minimum amount of money when the Constitution makes no such allowance. The talk about need to balance the budget always factors in the need to either raise taxes or cut spending but usually everything on the table is a steak from a scared cow which is there to Moo in a way to prevent taxpayers from having any added actual economic freedom. The whole argument is about a stream of money and cash flow to the government and very rarely is about any significant taxpayer freedom from these growing obligations. Balancing the budget can be done by the old Czar of Russia in a country with 150 million serfs more efficiently . When it comes to real freedom to chose how one runs one's own finances and how one can maximize free choice the government cannot bear the thought of not getting an adequate cut. Economic freedom is not at the top of the list of countries of the world as it should be and the country pays for it in ways that do not seem obvious in the short run but do become obvious when capital dries up in the future because that capital went to feed bogus government programs that pay for propaganda that keeps them going regardless of how they have failed over many consecutive years. The bottom may finally fall out and then people realize that they may need to go to foreign banks to ask to borrow money for their own means of survival. You really don't see that in the US yet but you do in most Banana republics that never recover from government economic controls until a military coup happens and the socialists are totally thrown out of office. In those cases unfortunately people find they may gain economic freedom but they lose social freedom but then of course the socialists also tend to control social freedom but the sympathetic press rarely complains under socialist control. Lack of economic freedom resulted in complete disaster in a multitude of African nations including the destruction of Zimbabwe. It all started out with cries that white farmers needed to be divorced from their land as ex-colonials and then resulted in starvation from lack of food coupled with hyper inflation. The level of wealth in the country fell like a rock until the present time when it pretty much looks like a hopeless mess. Comparing Zimbabwe before and after it is pretty clear that economic freedom did much more for most of the population than a dictatorship of what might have started out as a planned economy of redressed grievances, redistribution and possibly even a few good intentions. The reason economies fall so fast without freedom of choice is that workers have no incentives to work and the investing class has no incentive to invest. Overseas rich capital sources have no reason or incentive to loan any needed outside money to a place where they know they will probably lose money. Any money in the country is best preserved fleeing the country. The United States of America is no different than Zimbabwe if we had that level of bad government we would experience a complete melt down. Investment would stop. Foreigners would not invest. Money would flee the country or try to find protection instead of going to work creating jobs. Any country that limits economic freedom may think it has some benefits in the short run such as a picture perfect situation for propaganda broadcasts but in reality it hides a great deterioration that will come to the surface eventually. It is funny to think that Adolf Hitler seemed to be a great success with his national socialism after he took power. Hitler's Germany seemed to be winning when it was really losing. One theory maybe that Hitler knew he had to go to war to keep new cash flow coming in his piracy of confiscation of resources. World war two may have been all for that reason getting money to keep the empire going because he could not both over tax the Germans and keep power. Ancient Rome regularly required cash infusions from major military campaigns of conquest no doubt about it. American Intellectuals and even Henry Ford were impressed by Hitler because he turned the country around from the bottoming out after world war one. It looked great in all the propaganda films. Every one was happy blond and suddenly wealthy but that would not last. Property was being confiscated to pay for that and once Hitler decided he wanted to control the world with aggression outside capital dried up and the Nazis kept things looking fine and well a while longer so long as they could steal the treasure of their conquests. Europeans in the line of the Nazi conquest were sending their capital to safe haves outside the euro zone as fast as they could. Britain even sent its gold to Fort Knox for safe keeping. The Nazis were stealing their wealth and not really creating it after the government got it's share to promote the war of conquest. The Germans may have thought they had economic freedom with a great safety net to begin with but by the end of the war Hitler was living down a hole in Berlin putting 13 year children on the front lines to defend the capital city and talk about freedom those 13 years olds who refused to join in the defence were put on display hanging by a noose or by piano wire. Freedom of Choice should be a basic right not just a privilege and that freedom of choice should be in all aspects of the economy. We could compare a freer America with a less free America say just in the years between Presidents Ford and Carter and then over the Reagan years when there was only a very slight increase in freedom of choice. The Reagan years opened the economy to somewhat lower rates and higher tax revenues which proved the George Bush theory of Voodoo economics all wrong. Reagan gave the people a bit more economic freedom and then took advantage of their success to grow the government. That growth in government far exceeded the increases in defence spending that helped bring down the old soviet union. Government that figures it out knows that giving more economic freedom allows them more resources to confiscate in taxation later on. That is China's big not so secret secret of success now. To beat China at that game the Americans only need even more economic freedom and they can't be beat. One that is said then you get the story about the great depression and how capitalism failed...blah blah blah and it does fail on occasions and perhaps government has some role at those points but an analysis of What FDR did shows that he slowed American progress to a crawl and extended a deep recession into a great depression of as many as ten years . FDR was so bad he did much to shut down world commerce not just US commerce because of his Utopian state control ideology. Lack of freedom to choose and even freedom to own gold in the US caused a US flight of capital that is not well documented but worked the same way it happens in banana republics. FDR created more dependency on government and put on a big alphabet soup show. It was theater but was not moving the economy out of the rut it had fallen into not until the next world war started and the people were motivated less by personal greed by a different kind of incentive of having to get something done. The soviets did just about the same time helping to defeat Hitler to the East and may have been able to do it without US help? Had Stalin won the war alone Russia would have been an even more wrecked country because capital would have been nonexistent with all German air raids going in that direction leveling everything of economic value. It all comes down to a fantasy that we all need some big brother or father to take care of us which is usually a self styled king or emperor or dictator from hell or people doing their best minding their own business and working to the ends of their own greed and needs without government saying it need take an ever larger cut. It is counter intuitive that central planning should not work until you see everything and nothing belonging to the masses who are all expecting the collective to take care of them when everyone has the incentive to do as little as possible unless forced to do so. Maximizing incentives by allowing people to do their best without penalty is an economic super engine like no other. People choose to work as hard as they want for what ever it is they may want to gain or if they want to mooch they can do that too. Moochers are never going to produce new jobs and so it does not matter if they are successful. Having choice gives one the opportunity to be incentivize and to see other getting rich because they have choice. It is not all happiness but it is better than an alternative where one goes and gets in line at at government office where they decide what kind of job you will have , how much you will get paid and how happy you will be allowed to be. The moochers love that kind of government especially if the government gives them lunches while they wait in line for 5 or ten years. .

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