Tuesday, March 03, 2009

Self-Interest i$ Good for the Nation

Much can be learned by reading history. This appears to be something that is totally lacking among the “elite” ruling class of the nation. Instead they seem to all have read law, which they proceed to ignore and or manipulate for their own greedy purposes. Below, just a few quotes pertinent to our current problems in this nation.

Most of these quotes are from Adam Smith, who published his magnum opus, Wealth of Nations, in the very important year of 1776.

It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will. -The Wealth of Nations, Book II, Chapter III

Great nations are never impoverished by private, though they sometimes are by public prodigality and misconduct. The whole, or almost the whole public revenue, is in most countries employed in maintaining unproductive hands... Such people, as they them-selves produce nothing, are all maintained by the produce of other men's labour... Those unproductive hands, who should be maintained by a part only of the spare revenue of the people, may consume so great a share of their whole revenue, and thereby oblige so great a number to encroach upon their capitals, upon the funds destined for the maintenance of productive labour, that all the frugality and good conduct of individuals may not be able to compensate the waste and degradation of produce occasioned by this violent and forced encroachment.
-The Wealth of Nations, Book II, Chapter III

The natural effort of every individual to better his own condition ... is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.
-The Wealth of Nations Book IV Chapter V Section IV

I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities...
II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person...
III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay...
IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the treasury of the state.
First, the levying of it may require a great number of officers... Secondly, it may obstruct the industry of the people, and discourage them from...business... Thirdly, by the forfeitures and other penalties which those unfortunate individuals incur who attempt unsuccessfully to evade the tax, it may frequently ruin them, and thereby put an end to the benefit which the community might have received from the employment of their capitals... Fourthly, by subjecting the people to the frequent visits and the odious examination of the tax-gatherers, it may expose them to much unnecessary trouble...
-The Wealth of Nations, Book V Chapter II Pt II

In every great monarchy of Europe the sale of the crown lands would produce a very large sum of money, which, if applied to the payment of the public debts, would deliver from mortgage a much greater revenue than any which those lands have ever afforded to the crown...When the crown lands had become private property, they would, in the course of a few years, become well-improved and well-cultivated...the revenue which the crown derives from the duties of customs and excise, would necessarily increase with the revenue and consumption of the people.
-The Wealth of Nations, I Book V Chapter II Part II

The proprietor of stock is necessarily a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could either carry on his business, or enjoy his fortune more at his ease. By removing his stock he would put an end to all the industry which it had maintained in the country which he left. Stock cultivates land; stock employs labour. A tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society. Not only the profits of stock, but the rent of land and the wages of labour, would necessarily be more or less diminished by its removal.
-The Wealth of Nations, Book V, Chapter II
And from Thomas Jefferson, these gems:

I think all the world would gain by setting commerce at perfect liberty.
-Thomas Jefferson, letter to John Adams, 7 July 1785

Never spend your money before you have earned it.
-Thomas Jefferson

Just a couple more:
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
-Ernest Hemingway

The government s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
- Ronald Reagan
__________

Bottom line: Capitalists create wealth, generally out of self-interest. It is in the interest of the people that they be unfettered by regulation, taxation, and general meddling. Dumping unbacked currency onto a problem has done nothing to help the government education systems or any other industry with no incentive to be frugal and efficient.

1 comment:

~Jenna said...

you go mr. jefferson!!