The Incredible Bread Machine
"The misconceptions of yesterday do not die easily; they usually end up comprising the conventional wisdom of today."
“The free market may not produce the perfect world, but it can create an environment in which man may conduct his lifelong search for purpose in his own way; in which each day he may order his life according to his own vision of his destiny, suffering both the agony of his errors and the pleasure of his successes.”
“The free market may not produce the perfect world, but it can create an environment in which man may conduct his lifelong search for purpose in his own way; in which each day he may order his life according to his own vision of his destiny, suffering both the agony of his errors and the pleasure of his successes.”
Preface
Wheat from Chaff
When the state, under the pretext of caring for people, takes away from them the means by which they might care for themselves, does such a legislation represent a step forward or a step back?It is not a step forward.
Sometimes people force you to choose something. Being forced to make a choice. For example the guy and the IRS: He had the choice to pay or not to pay the taxes, so technically he did choose, but someone was imposing the choice on him. Maybe if it were for him, he wouldn't have to choose.
Social security : take from you now while you are young (either because you pay tax or not pay) in order to give you money when you are old. But like with this Amish guy, since he didn't pay taxes, the IRS took away his horses, which were his only way to make money. So it’s ironic that they took away his means of survival when he was young in order to give it to him when he is old. What if he doesn't make it at an old age because he had no means to survive?
But, on the other side, I don't know why the social security was invented
Trying to get the Amish away from the Social security problem, introduces an inequality of the rule of law, which is supposed to apply equally to every one.
Sometimes people force you to choose something. Being forced to make a choice. For example the guy and the IRS: He had the choice to pay or not to pay the taxes, so technically he did choose, but someone was imposing the choice on him. Maybe if it were for him, he wouldn't have to choose.
Social security : take from you now while you are young (either because you pay tax or not pay) in order to give you money when you are old. But like with this Amish guy, since he didn't pay taxes, the IRS took away his horses, which were his only way to make money. So it’s ironic that they took away his means of survival when he was young in order to give it to him when he is old. What if he doesn't make it at an old age because he had no means to survive?
But, on the other side, I don't know why the social security was invented
Trying to get the Amish away from the Social security problem, introduces an inequality of the rule of law, which is supposed to apply equally to every one.
Part One
"Possibly capitalism was its own worst enemy... for in raising the general standard of living it made more conspicuous the poverty that still remained."
Chapter 1
The Bread Also Rises
Laissez faire capitalism: an economic system of voluntary exchange between individuals without interference from the government.
People think that the 19th century was full of “capitalists” that stole from everyone and made their riches at others expense (Vanderbilt, Rockefeller, Hill). The public demanded government regulation, more laws; in order to get “social justice out of the economic tyranny”.
But I believe that they really opened the country so that millions of people could also become successful; they are the men who built America. They are the ones on top, so people blame them for everything.
“This is history as taught in our schools, acted upon in our Congress, and believed by the man in the street.”
Maybe the economic problems of the 19th century occurred because there was government interference. Maybe there was no Laissez faire capitalism ever, and the government intervened since the beginning.
Vanderbilt:
“What Vanderbilt touched turned to gold, for he ran his properties efficiently and profitably.”
James J. Hill:
Built the great northern railroad, without government subsidies and all on his own.
“He succeeded in meeting his competition by providing better service and by exercising shrewd business judgment.”
Central Pacific Railroad:
“The monopoly of the Central Pacific was not the result of efficient competition and good service. It was not achieved through the mechanism of a free market, but by legislative action... legislature saw to it that the Central Pacific received no competition, by refusing to let other railroads operate in the area."
"Had this nation truly had a capitalistic economy, this type of government "regulation" would have been constitutionally forbidden, and the Central Pacific monopoly would never have been established by fiat."
Rockefeller:
"With a superior product and superior organizational skill, Rockefeller's enterprise steadily expanded until it became the leader in the field."
Justice:
"To be just means, so far as I can make out, to give each man his due. In economic terms, it means that a man should have what he has earned or what has been given him by someone who earned it"
"It would be a mistake to assume that every nineteenth century businessman was an "architect of progress," but it is also a mistake to assume that government intrusion into the economy stimulated competition and benefited the consumer. To the extent that government interference was kept minimal, the economy prospered."
Benjamin A. Rogge describes why:
"The real nature of competition is the competition between the man who had the last idea and got way out ahead and the man who has come up with the new idea; in other words, competition is a never ending game of leapfrog."
"The misconceptions of yesterday do not die easily; they usually end up comprising the conventional wisdom of today."
"Possibly capitalism was its own worst enemy in this respect, for in raising the general standard of living it made more conspicuous the poverty that still remained." Since, poverty is our natural state.
Children used to work in factory’s, which is why other people complained, and this might’ve been a bad thing. But they only worked out of necessity; they would’ve starved before. Capitalism saved them.
Laissez faire capitalism: an economic system of voluntary exchange between individuals without interference from the government.
People think that the 19th century was full of “capitalists” that stole from everyone and made their riches at others expense (Vanderbilt, Rockefeller, Hill). The public demanded government regulation, more laws; in order to get “social justice out of the economic tyranny”.
But I believe that they really opened the country so that millions of people could also become successful; they are the men who built America. They are the ones on top, so people blame them for everything.
“This is history as taught in our schools, acted upon in our Congress, and believed by the man in the street.”
Maybe the economic problems of the 19th century occurred because there was government interference. Maybe there was no Laissez faire capitalism ever, and the government intervened since the beginning.
Vanderbilt:
“What Vanderbilt touched turned to gold, for he ran his properties efficiently and profitably.”
James J. Hill:
Built the great northern railroad, without government subsidies and all on his own.
“He succeeded in meeting his competition by providing better service and by exercising shrewd business judgment.”
Central Pacific Railroad:
“The monopoly of the Central Pacific was not the result of efficient competition and good service. It was not achieved through the mechanism of a free market, but by legislative action... legislature saw to it that the Central Pacific received no competition, by refusing to let other railroads operate in the area."
"Had this nation truly had a capitalistic economy, this type of government "regulation" would have been constitutionally forbidden, and the Central Pacific monopoly would never have been established by fiat."
Rockefeller:
"With a superior product and superior organizational skill, Rockefeller's enterprise steadily expanded until it became the leader in the field."
Justice:
"To be just means, so far as I can make out, to give each man his due. In economic terms, it means that a man should have what he has earned or what has been given him by someone who earned it"
"It would be a mistake to assume that every nineteenth century businessman was an "architect of progress," but it is also a mistake to assume that government intrusion into the economy stimulated competition and benefited the consumer. To the extent that government interference was kept minimal, the economy prospered."
Benjamin A. Rogge describes why:
"The real nature of competition is the competition between the man who had the last idea and got way out ahead and the man who has come up with the new idea; in other words, competition is a never ending game of leapfrog."
"The misconceptions of yesterday do not die easily; they usually end up comprising the conventional wisdom of today."
"Possibly capitalism was its own worst enemy in this respect, for in raising the general standard of living it made more conspicuous the poverty that still remained." Since, poverty is our natural state.
Children used to work in factory’s, which is why other people complained, and this might’ve been a bad thing. But they only worked out of necessity; they would’ve starved before. Capitalism saved them.
Chapter 2
The Sun Sinks in the YeastMany people attribute the great depression to capitalism.
The Great Depression: The Misesian Theory
“A money market free from government intervention provides the ideal economic stabilizer: the interest rate”
Depression: when there are artificially low rates, because of government intervention. It causes investment, but it is not successful. This also causes the boom and bust cycle.
The Great Depression: What Caused It
The foundations for the great depression happened much before 1929. Beginning with the Federal Reserve.
"It would have been better had the nation's monetary system continued to evolve in private hands, for the Federal Reserve System proved to be an engine of inflation that crippled the nation's economy."
The Federal Reserve was the only one with control over the money. They could create or extinguish.
"And so, first by one means and then another, for a period of about eight years, the Federal Reserve System fed the fires of inflation, increasing the money supply by about 62%."
"It was basically government intervention, and it was the continuation of these interventionist policies during the Hoover and Roosevelt administrations which prolonged the Depression for nearly ten years."
The Great Depression: What Prolonged It
The Hoover Years
"It followed that the way to cure a depression would be to keep wages high, even in the face of dropping prices and extinguished profits."
People still had to pay high wages, even if they weren’t gaining enough profit to do it.
"A depression is caused by malinvestment - by investment in capital goods for which no real demand exists."
The Roosevelt Years
People thought that Roosevelt would help the economy.
But… "the administration quickly set about to acquire physical possession and legal title to all gold in the nation."
"Now, with gold out of private hands, the gold standard was abandoned. The Thomas Amendment gave the President discretionary power to devalue the dollar by up to 50%." Then to 60%.
"The seizure of gold by the State was not only a dishonest act, it was economically self-defeating, for the appropriation of the private property of American citizens did little to restore business confidence."
Then the administration changed the gold prices, they (President Roosevelt and three more) set them at the price they wanted, disregarding the actual price.
"The actual price ... made little difference."
"If anybody ever knew how we really set the gold price . . . I think they would really be frightened." - The secretary of treasure.
"Needless to say, the scheme did not work. As usual, the government was dealing only with symptoms, not with underlying realities."
National Recovery Act: codes of minimum prices, wages and rates. Minimum wage policy.
"The minimum wage policy of the NRA represented the idea that if wages could arbitrarily be kept high, prosperity would somehow be assured."
Later, the court declared NRA unconstitutional. "The Court declared that Congress could not delegate power virtually without limit, and the entire NRA was declared unconstitutional."
"It was during the New Deal years that the economic theories of British economist John Maynard Keynes came to dominate government and academic circles."
"Keynes' "new" economics advocated reducing the interest rates of banks in order to stimulate investment, progressive income tax to make incomes more equal (and increase the percentage of aggregate income that could be spent on consumption), and government investment in public works. This amounted to government control of the economy."
When government spends, the economy drinks its own blood and, in the end, is weakened accordingly.
"But a sick economy is not cured by more intervention any more than a drug addict is cured by more drugs."
"Economic theory demonstrates that only governmental inflation can generate a boom- and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. . . . The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of "enlightened" economists. And in any other depression, past or future, the story will be the same."
The Great Depression: The Misesian Theory
“A money market free from government intervention provides the ideal economic stabilizer: the interest rate”
- Low interest rates: when don't spend today in order to spend in the future. More loans, because there is more money to lend. Encourages businessman to take long-term loans and develop capital goods.
- High interest rates: there is not enough lending money. It discourages investments.
Depression: when there are artificially low rates, because of government intervention. It causes investment, but it is not successful. This also causes the boom and bust cycle.
The Great Depression: What Caused It
The foundations for the great depression happened much before 1929. Beginning with the Federal Reserve.
"It would have been better had the nation's monetary system continued to evolve in private hands, for the Federal Reserve System proved to be an engine of inflation that crippled the nation's economy."
The Federal Reserve was the only one with control over the money. They could create or extinguish.
"And so, first by one means and then another, for a period of about eight years, the Federal Reserve System fed the fires of inflation, increasing the money supply by about 62%."
"It was basically government intervention, and it was the continuation of these interventionist policies during the Hoover and Roosevelt administrations which prolonged the Depression for nearly ten years."
The Great Depression: What Prolonged It
The Hoover Years
"It followed that the way to cure a depression would be to keep wages high, even in the face of dropping prices and extinguished profits."
People still had to pay high wages, even if they weren’t gaining enough profit to do it.
"A depression is caused by malinvestment - by investment in capital goods for which no real demand exists."
The Roosevelt Years
People thought that Roosevelt would help the economy.
But… "the administration quickly set about to acquire physical possession and legal title to all gold in the nation."
"Now, with gold out of private hands, the gold standard was abandoned. The Thomas Amendment gave the President discretionary power to devalue the dollar by up to 50%." Then to 60%.
"The seizure of gold by the State was not only a dishonest act, it was economically self-defeating, for the appropriation of the private property of American citizens did little to restore business confidence."
Then the administration changed the gold prices, they (President Roosevelt and three more) set them at the price they wanted, disregarding the actual price.
"The actual price ... made little difference."
"If anybody ever knew how we really set the gold price . . . I think they would really be frightened." - The secretary of treasure.
"Needless to say, the scheme did not work. As usual, the government was dealing only with symptoms, not with underlying realities."
National Recovery Act: codes of minimum prices, wages and rates. Minimum wage policy.
"The minimum wage policy of the NRA represented the idea that if wages could arbitrarily be kept high, prosperity would somehow be assured."
Later, the court declared NRA unconstitutional. "The Court declared that Congress could not delegate power virtually without limit, and the entire NRA was declared unconstitutional."
"It was during the New Deal years that the economic theories of British economist John Maynard Keynes came to dominate government and academic circles."
"Keynes' "new" economics advocated reducing the interest rates of banks in order to stimulate investment, progressive income tax to make incomes more equal (and increase the percentage of aggregate income that could be spent on consumption), and government investment in public works. This amounted to government control of the economy."
When government spends, the economy drinks its own blood and, in the end, is weakened accordingly.
"But a sick economy is not cured by more intervention any more than a drug addict is cured by more drugs."
"Economic theory demonstrates that only governmental inflation can generate a boom- and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. . . . The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of "enlightened" economists. And in any other depression, past or future, the story will be the same."
Part Two
"Money is not wealth; it is only a medium of exchange. True wealth is in the goods and services that people can actually use."
“A basic law of economics is that prices are not set arbitrarily by a business, but are determined by the demand for a product.”
“A basic law of economics is that prices are not set arbitrarily by a business, but are determined by the demand for a product.”
Chapter 3
The No-Dough Policy
“The United States never had a totally free economy, but to the extent it was free the nation prospered.”
"The old trick of turning every contingency into a resource for accumulating force in the government."
Example: government subsidized cotton farmers. The prices went up, so the exporters couldn't export, so they were subsidized. But then foreigners were getting cotton for mills cheaper than the states, so they subsidized the mills. “And so the growers, the exporters, and the mills are now all indebted to the State for assistance.”
“And what the State subsidizes, to an appreciable extent it controls.”
Money
“Nowhere has the old trick been more in evidence than in the ever increasing control over money.”
“Only by permanent reference to a stable standard can a currency be kept sound and can the citizens of a nation protect themselves from the narcotic of politically inspired inflation.”
Tecnically, other things can be used as the money standard. But gold is more appropriate because it is durable, limited and it is globally accepted. But…”its real value lies in precisely that quality to which its detractors object: Its insensitivity to political manipulation.”
“In a free economy people are free to accept or reject paper money depending on their assessment of the integrity of those who have issued it.” Obviously we don't have a free economy.
“A rational examination of economic history will show that government meddling is usually the principal cause of a boom- and-bust cycle.”
Arguments said in favor of politically controlled money supply:
"Money is not wealth; it is only a medium of exchange. True wealth is in the goods and services that people can actually use."
"If things such as food, clothing, and shelter are available in abun- dance, the nation is prosperous; if these things are in short supply, the nation is impoverished - money or no money."
Milton Friedman:
"In a way, it's like drink. The first few months or years of inflation, like the first few drinks, seem just fine… The hangover comes when prices start to catch up... The problem is getting through the painful cure without wanting another drink. The greatest difficulty in curtailing inflation is that, after a while, people begin to think they'd rather have the sickness than the cure."
When we have inflation, wages are usually made higher in order to pay the higher cost of living. But more income doesn't mean you earn more, because you also spend more. And you pay more taxes. So you are left in the same place you were before but with the illusion of making more money.
Antitrust and Monopoly
“The antitrust laws were supposedly meant to protect and encourage competition, but in the process of competing it is illegal to embrace each new opportunity as it opens.”
The thing is that many people confuse monopoly (which involves government helping) with natural monopoly (in which companies are able to compete and take advantage, as in the case of Windows that Bert told us: that because Windows was bundling and selling more it was accused of being a monopoly).
There is a need to understand that there are two kinds of monopolies: coercive and natural.
“The rationale for this confusing antitrust legislation rests on misconceptions about the market system and the nature of monopolies.”
“Current antitrust, however, frequently tries to arrest change, to freeze the status quo, to extrapolate a static view of existing market conditions into a supposedly unalterable future. But the present as well as the future is always changing to meet ever-new economic conditions.”
“A basic law of economics is that prices are not set arbitrarily by a business, but are determined by the demand for a product.”
“On the free market every company is faced with the possibility of competition, even if at a given time it appears to have a monopoly in its market.” It just means that they probably have the better product or service. But if you are a “monopoly”, and you set the prices to high, you are just inviting competition, or other new products or lower prices to the market and get all the customers.
Minimum Wage
First minimum wage law? 1938
“The principal motivation behind its passage was to encourage ‘the minimum standards of living necessary for health, efficiency and well-being of workers.’”
Henry Hazlitt:
what are the actual results of minimum wage laws?
It hurts most the people they are designed to protect. If a job is not worth a minimum wage, then these jobs cease to exist.
“While the aim of a minimum wage law is to improve the incomes of the marginal workers, the actual effect is precisely the reverse it is to render them unemployable at legal wage rates.”
Labor Unions
It is thought that labor unions have helped improved the wages of everyone.
“When a union strikes for higher wages - higher than the market value of their work - the results of a successful strike, while appearing to gain higher wages for the members of the union, in many instances actually hurt them.” And not only the ones doing the strikes. But when a strike happens it also helps other businesses depending on the one striking and it also affects the consumers.
“So it simply is not true that strikes benefit all workers. They always hurt non-union workers, and many times they hurt even the strikers.”
“In a free market system workers would be paid according to productivity, but legislation has enabled unions to peg their demands according to their strength in their particular industry, and these demands are often inconsistent with the union members' productivity.”
Price Controls
“On the whole, the American public has not been aware of how the government contributes to artificial surpluses and artificial shortages of commodities through various price control pro- grams. Nor has the public been conscious of the tremendous amount of its money that is spent on these interventions into the free market.”
“There is a cardinal rule of economics concerning price controls: When the government sets a minimum price on a product and that price is higher than the free market price, an artificial surplus of the product results; when a government sets a maximum price on a product that is lower than the market price, an artificial short- age of that product results.”
“The United States never had a totally free economy, but to the extent it was free the nation prospered.”
"The old trick of turning every contingency into a resource for accumulating force in the government."
Example: government subsidized cotton farmers. The prices went up, so the exporters couldn't export, so they were subsidized. But then foreigners were getting cotton for mills cheaper than the states, so they subsidized the mills. “And so the growers, the exporters, and the mills are now all indebted to the State for assistance.”
“And what the State subsidizes, to an appreciable extent it controls.”
Money
“Nowhere has the old trick been more in evidence than in the ever increasing control over money.”
“Only by permanent reference to a stable standard can a currency be kept sound and can the citizens of a nation protect themselves from the narcotic of politically inspired inflation.”
Tecnically, other things can be used as the money standard. But gold is more appropriate because it is durable, limited and it is globally accepted. But…”its real value lies in precisely that quality to which its detractors object: Its insensitivity to political manipulation.”
“In a free economy people are free to accept or reject paper money depending on their assessment of the integrity of those who have issued it.” Obviously we don't have a free economy.
“A rational examination of economic history will show that government meddling is usually the principal cause of a boom- and-bust cycle.”
Arguments said in favor of politically controlled money supply:
- By influencing credit, the government can control the business cycle.
- If the economy expands, then the volume of money can be expanded also.
- Government can, by inflation, finance its spending programs to keep the economy moving.
- Illusion that an increase in money supply is an increase in wealth.
- A halt to the spending and inflation might generate a depression.
"Money is not wealth; it is only a medium of exchange. True wealth is in the goods and services that people can actually use."
"If things such as food, clothing, and shelter are available in abun- dance, the nation is prosperous; if these things are in short supply, the nation is impoverished - money or no money."
Milton Friedman:
"In a way, it's like drink. The first few months or years of inflation, like the first few drinks, seem just fine… The hangover comes when prices start to catch up... The problem is getting through the painful cure without wanting another drink. The greatest difficulty in curtailing inflation is that, after a while, people begin to think they'd rather have the sickness than the cure."
When we have inflation, wages are usually made higher in order to pay the higher cost of living. But more income doesn't mean you earn more, because you also spend more. And you pay more taxes. So you are left in the same place you were before but with the illusion of making more money.
Antitrust and Monopoly
“The antitrust laws were supposedly meant to protect and encourage competition, but in the process of competing it is illegal to embrace each new opportunity as it opens.”
The thing is that many people confuse monopoly (which involves government helping) with natural monopoly (in which companies are able to compete and take advantage, as in the case of Windows that Bert told us: that because Windows was bundling and selling more it was accused of being a monopoly).
There is a need to understand that there are two kinds of monopolies: coercive and natural.
- Natural monopoly: one that exists by virtue of the size of the market which it serves and the size of the company itself. But these natural monopolies are rare and don't last that long. “This is the way things are on the market - things are constantly changing: new methods of production and marketing, new products, new tools, new knowledge.”
- Coercive monopoly: through the use of physical force or fraud, prevents competitors from entering the market. This can happen through two ways: by criminal acts or by government sanction. Usually the prices are regulated, and if the service is bad, there are no other alternatives. An example: AMTRAK
“The rationale for this confusing antitrust legislation rests on misconceptions about the market system and the nature of monopolies.”
“Current antitrust, however, frequently tries to arrest change, to freeze the status quo, to extrapolate a static view of existing market conditions into a supposedly unalterable future. But the present as well as the future is always changing to meet ever-new economic conditions.”
“A basic law of economics is that prices are not set arbitrarily by a business, but are determined by the demand for a product.”
“On the free market every company is faced with the possibility of competition, even if at a given time it appears to have a monopoly in its market.” It just means that they probably have the better product or service. But if you are a “monopoly”, and you set the prices to high, you are just inviting competition, or other new products or lower prices to the market and get all the customers.
Minimum Wage
First minimum wage law? 1938
“The principal motivation behind its passage was to encourage ‘the minimum standards of living necessary for health, efficiency and well-being of workers.’”
Henry Hazlitt:
what are the actual results of minimum wage laws?
It hurts most the people they are designed to protect. If a job is not worth a minimum wage, then these jobs cease to exist.
“While the aim of a minimum wage law is to improve the incomes of the marginal workers, the actual effect is precisely the reverse it is to render them unemployable at legal wage rates.”
Labor Unions
It is thought that labor unions have helped improved the wages of everyone.
“When a union strikes for higher wages - higher than the market value of their work - the results of a successful strike, while appearing to gain higher wages for the members of the union, in many instances actually hurt them.” And not only the ones doing the strikes. But when a strike happens it also helps other businesses depending on the one striking and it also affects the consumers.
“So it simply is not true that strikes benefit all workers. They always hurt non-union workers, and many times they hurt even the strikers.”
“In a free market system workers would be paid according to productivity, but legislation has enabled unions to peg their demands according to their strength in their particular industry, and these demands are often inconsistent with the union members' productivity.”
Price Controls
“On the whole, the American public has not been aware of how the government contributes to artificial surpluses and artificial shortages of commodities through various price control pro- grams. Nor has the public been conscious of the tremendous amount of its money that is spent on these interventions into the free market.”
“There is a cardinal rule of economics concerning price controls: When the government sets a minimum price on a product and that price is higher than the free market price, an artificial surplus of the product results; when a government sets a maximum price on a product that is lower than the market price, an artificial short- age of that product results.”
Chapter 4
Kneading Bread
“Particularly in the area of civil rights, welfare, and social security, the importance of individual freedom has been obscured under the guise of helping unfortunate people whose plight, in many instances, was most likely caused by government in the first place.”
Civil Rights
Civil rights movement arouse because of the negation of individual rights (mostly by blacks or other minorities)
Civil rights: the rights that guarantee every citizen equal protection under the law and the right to participate in government to the same extent as every other individual.
“So long as the individual does not initiate force or fraud against another individual, he should be free to associate or not to associate with whomever he chooses - this is a fundamental right of all citizens in a free society.”
Everybody has right, provided that they don't violate the rights of other, or impose things by force.
“It is the role of government in a free society to protect the rights of all its citizens.”
“When race becomes the criterion of selection or the basis for action, then racial conflict is to be expected.”
Which is now seen at the various universities and jobs that have to fill a quote of people from other races.
“On the free market color is not a significant issue.” "Under conditions of voluntary exchange in free markets, racial tensions and conflict are kept to a minimum."
Welfare
“When a government seizes your money in order to pay for programs that support others, how has its actions differed from that of a thief?”
“The point is simply this: need does not establish the right to violate the rights of others.”
Just because other people are in need, it doesn't mean that your money should be taken away.
“What then is the answer? Who will care for the truly needy?”
Individuals who voluntarily give money.
“It is interesting to speculate, on the basis of these facts, what individuals would do if they could spend their entire paycheck as they wished, rather than as the State forces them to.”
“To say that you ought to help those in need is one thing, but to say that you must is quite an- other, for it contradicts the very meaning of freedom.”
“When you honestly think about it, most people enjoy helping those in need. It gives them a feeling of satisfaction. And from this "selfish" motivation, those in need are most effectively helped.”
Mandatory giving = causes resentment. You start looking at those in welfare as leeches or parasites.
“When giving becomes mandatory, many recipients begin to look upon their received charity as a "right" and demand more and more.”
Social Security
“Social Security, despite current criticisms, is one of the best bargains ever offered to retiring people - that is, if you are planning to retire in the next couple of years.”
“The 1935 introduction of Social Security legislation sought to insure the common worker that he would be taken care of in his declining years and that, if a family catastrophe occurred, his government-imposed "nest egg" would lessen the financial burden of disability or death”
but the authors of the book think that it is the most unjust tax.
Many of the people say that the Social Security was meant as an insurance program. “If, in fact, Social Security was meant to be an insurance program, why didn't the government merely require that every person have old age insurance with a private company? Because the government thought it could do a better job than private companies.”
“Particularly in the area of civil rights, welfare, and social security, the importance of individual freedom has been obscured under the guise of helping unfortunate people whose plight, in many instances, was most likely caused by government in the first place.”
Civil Rights
Civil rights movement arouse because of the negation of individual rights (mostly by blacks or other minorities)
Civil rights: the rights that guarantee every citizen equal protection under the law and the right to participate in government to the same extent as every other individual.
“So long as the individual does not initiate force or fraud against another individual, he should be free to associate or not to associate with whomever he chooses - this is a fundamental right of all citizens in a free society.”
Everybody has right, provided that they don't violate the rights of other, or impose things by force.
“It is the role of government in a free society to protect the rights of all its citizens.”
“When race becomes the criterion of selection or the basis for action, then racial conflict is to be expected.”
Which is now seen at the various universities and jobs that have to fill a quote of people from other races.
“On the free market color is not a significant issue.” "Under conditions of voluntary exchange in free markets, racial tensions and conflict are kept to a minimum."
Welfare
“When a government seizes your money in order to pay for programs that support others, how has its actions differed from that of a thief?”
“The point is simply this: need does not establish the right to violate the rights of others.”
Just because other people are in need, it doesn't mean that your money should be taken away.
“What then is the answer? Who will care for the truly needy?”
Individuals who voluntarily give money.
“It is interesting to speculate, on the basis of these facts, what individuals would do if they could spend their entire paycheck as they wished, rather than as the State forces them to.”
“To say that you ought to help those in need is one thing, but to say that you must is quite an- other, for it contradicts the very meaning of freedom.”
“When you honestly think about it, most people enjoy helping those in need. It gives them a feeling of satisfaction. And from this "selfish" motivation, those in need are most effectively helped.”
Mandatory giving = causes resentment. You start looking at those in welfare as leeches or parasites.
“When giving becomes mandatory, many recipients begin to look upon their received charity as a "right" and demand more and more.”
Social Security
“Social Security, despite current criticisms, is one of the best bargains ever offered to retiring people - that is, if you are planning to retire in the next couple of years.”
“The 1935 introduction of Social Security legislation sought to insure the common worker that he would be taken care of in his declining years and that, if a family catastrophe occurred, his government-imposed "nest egg" would lessen the financial burden of disability or death”
but the authors of the book think that it is the most unjust tax.
Many of the people say that the Social Security was meant as an insurance program. “If, in fact, Social Security was meant to be an insurance program, why didn't the government merely require that every person have old age insurance with a private company? Because the government thought it could do a better job than private companies.”
Chapter 5
Burnt Toast
“A dictator cannot stay in power without con- trolling the sources of wealth. Whether the "dictator" is one identifiable person or some abstract called the "State," the absolute necessity is control of the economy.”
“It would definitely seem that the best practical guarantee of political freedom is that economic system in which the sources of wealth are privately owned and controlled, rather than concentrated in the hands of the State.”
“A dictator cannot stay in power without con- trolling the sources of wealth. Whether the "dictator" is one identifiable person or some abstract called the "State," the absolute necessity is control of the economy.”
“It would definitely seem that the best practical guarantee of political freedom is that economic system in which the sources of wealth are privately owned and controlled, rather than concentrated in the hands of the State.”
Part Three:
"The fundamental right for a human is the right to his own life. He owns his life"
The Bread of the Matter
What if the government had no interference with the economy?
What is freedom?
“Freedom is the ability to act without hindrance or restraint.”
In political principle, freedom is:
“The right to act or not to act according to one's own judgment, so long as one does not initiate force against anyone else attempting to implement the same freedom.”
Principles:
“Are not legislated or invented - they are discovered.”
As long as the principles of human action are ignored or rejected, we are subject to poverty and political messes, and tyranny.
Principles of freedom:
“An understanding of the principles of freedom - individualism, private property, and capitalism - could have avoided the tyrannies of the past. An understanding of these principles can avoid tyranny in the future.”
What if the government had no interference with the economy?
- True laissez faire capitalism
- There would be a free society
What is freedom?
“Freedom is the ability to act without hindrance or restraint.”
In political principle, freedom is:
“The right to act or not to act according to one's own judgment, so long as one does not initiate force against anyone else attempting to implement the same freedom.”
Principles:
“Are not legislated or invented - they are discovered.”
As long as the principles of human action are ignored or rejected, we are subject to poverty and political messes, and tyranny.
Principles of freedom:
- Individualism
- The right to fruits of your labor (Private property)
- Capitalism
“An understanding of the principles of freedom - individualism, private property, and capitalism - could have avoided the tyrannies of the past. An understanding of these principles can avoid tyranny in the future.”
Chapter 6
Staff of Life
Humanitarian/altruist:
Individualist:
“The philosophical doctrine which recognizes the moral correctness of self-interest is individualism.”
Individualists benefit from association with other individualists:
“One who lives in a voluntary association with others receives the benefits of the knowledge of others, the benefits of the production of others, and the benefit of the company of others.”
“The philosophy of individualism grows out of a concept of rights, and this concept grows out of observing the basic nature of man as a human being.”
“A false notion has crept into our thinking that sacrifice of self is the "good" and individualism is the "bad."”
“Humanitarianism is food for tyranny.”
Humanitarian/altruist:
- Unselfish concern for the welfare of the others.
- In these actions you don't consider oneself, even if they might be detrimental to your own well being.
Individualist:
- His prime
concern is himself.
- Individual
is justified in pursuing his own self-interest, and doesn't give it up to the
desires of others.
- He is not
morally obligated to place the welfare of others before his own.
- He
recognizes as concerns only those relationships which he has voluntarily
entered. “Because he values human life he may assist those who are in genuine need, but the "obligation" is to his own values, not to the other person.”
- He operates
by logical thought and reason and self-consideration.
“The philosophical doctrine which recognizes the moral correctness of self-interest is individualism.”
Individualists benefit from association with other individualists:
“One who lives in a voluntary association with others receives the benefits of the knowledge of others, the benefits of the production of others, and the benefit of the company of others.”
“The philosophy of individualism grows out of a concept of rights, and this concept grows out of observing the basic nature of man as a human being.”
“A false notion has crept into our thinking that sacrifice of self is the "good" and individualism is the "bad."”
“Humanitarianism is food for tyranny.”
Chapter 7
Better Bread than Dead
“Private property has been the object of attack ever since the first non-producer enviously viewed the fruit of the labors of the first producer.”
“William W. Bayes points out that the fundamental right for a human is the right to his own life. He owns his life.”
It then follows that to get the means to sustain your life, you must produce. “It then must follow that if production is necessary to life, and you own your life, then what you produce must belong to you, or there is no meaningful right to your own life.” And with whatever you produce you have the right to do with it what you want.
But not only things owed are included as property, also the right to act: free speech, peaceful assembly, worship, etc.
“The individual's right to do as he may wish with his own property does not include the right to do as he may wish with someone else's.” This is a recognition of the equal property rights of other individuals.
“Without property rights, no other rights can be secure.”
“Private property has been the object of attack ever since the first non-producer enviously viewed the fruit of the labors of the first producer.”
“William W. Bayes points out that the fundamental right for a human is the right to his own life. He owns his life.”
It then follows that to get the means to sustain your life, you must produce. “It then must follow that if production is necessary to life, and you own your life, then what you produce must belong to you, or there is no meaningful right to your own life.” And with whatever you produce you have the right to do with it what you want.
But not only things owed are included as property, also the right to act: free speech, peaceful assembly, worship, etc.
“The individual's right to do as he may wish with his own property does not include the right to do as he may wish with someone else's.” This is a recognition of the equal property rights of other individuals.
“Without property rights, no other rights can be secure.”
Chapter 8
Baker's Dozen
“The free market may not produce the perfect world, but it can create an environment in which man may conduct his lifelong search for purpose in his own way; in which each day he may order his life according to his own vision of his destiny, suffering both the agony of his errors and the pleasure of his successes.”
“Total economic freedom would exist if the government's only function were to prevent the initiation of force or fraud against its people by any individual, group, or government.”
“When economic freedom is limited, personal freedoms ultimately diminish.”
“In the words of one historian, "The only thing we learn from history is that we never learn."”
“If anything," says Melvin Barger, "the failures of socialist interventionism seem to provide the basis for new rounds of interventions.”
“Capitalism will not provide human beings with happiness, if they do not know what will make them happy; it will not guarantee justice, if they do not know why justice is necessary; it will not protect them from the throes of materialism, if they wish to place products before people.”
“What capitalism will do is provide human beings with the material means of survival and the freedom to improve their lives in accordance with their own wishes.”
“The free market may not produce the perfect world, but it can create an environment in which man may conduct his lifelong search for purpose in his own way; in which each day he may order his life according to his own vision of his destiny, suffering both the agony of his errors and the pleasure of his successes.”
“Total economic freedom would exist if the government's only function were to prevent the initiation of force or fraud against its people by any individual, group, or government.”
“When economic freedom is limited, personal freedoms ultimately diminish.”
“In the words of one historian, "The only thing we learn from history is that we never learn."”
“If anything," says Melvin Barger, "the failures of socialist interventionism seem to provide the basis for new rounds of interventions.”
“Capitalism will not provide human beings with happiness, if they do not know what will make them happy; it will not guarantee justice, if they do not know why justice is necessary; it will not protect them from the throes of materialism, if they wish to place products before people.”
“What capitalism will do is provide human beings with the material means of survival and the freedom to improve their lives in accordance with their own wishes.”