Eeek!onomics

"Along with the economic sovereignty of the citizens disappears also their political sovereignty. To the unique production plan that annuls any planning on the part of the consumers corresponds in the constitution sphere the one party principle that deprives the citizens of any opportunity to plan the course of public affairs. Freedom is indivisible. He who has not the faculty to choose among various brands of canned food or soap, is also deprived of the power to choose between various political parties and programs and to elect the officeholders. He is no longer a man; he becomes a pawn in the hands of the supreme social engineer. Even his freedom to rear progeny will be taken away by eugenics." Ludwig von Mises in "Liberty and Property" (emphasis mine)

Economic Thoughts Continued

A friend of the family from church sent me an article about the philosophy of economist, Fredrick Hayek. While I didn't agree with everything he espoused, he had some GREAT quotes...

“[Equality] of the general rules of law and conduct… is the only kind of equality conducive to liberty and the only equality which we can secure without destroying liberty.”

Economics and FDR

"FDR, who embraced 'progressive ideas,' certainly wasn't a thinker. 'Roosevelt responded less to principles than to personalities, and these could be presented best in conversation,' observed historian George Martin. Indeed, FDR appeared to be utterly ignorant of economics. He seemed willing to try practically anything as long as it involved more government control over the economy. He was apparently unaware that such policies had been tried before in many other countries - and failed." ~Jim Powell in FDR's Folly (emphasis mine)

More Economic Food for Thought

“The wise and correct course to follow in taxation is not to destroy those who have already secured success, but to create conditions under which everyone will have a better chance to be successful.” ~Calvin Coolidge

Biblical Economics

He who loves money will not be satisfied with money,
nor he who loves abundance {with its} income.
This too is vanity.
Ecclesiastes 5:10

Weekly Econ... Song?

I found this on Greg Mankiw's blog. Tee hee hee. :P Who said economics can't be funny?

Economics: A Free Trade Argument

It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. ~Adam Smith

Smith's advice makes sense. So much sense, in fact, that most of us run our personal affairs in this way without thinking twice. For example, many of us take our shirts to professional cleaners even though we could certainly wash and iron them ourselves. Anyone who advised us to "protect" ourselves from the "unfair competition" of low-paid laundry workers by doing our own wash would be considered looney. Common sense tells us to make use of companies that specialize in such work, paying them with money we earn doing something we do better. We understand intuitively that cutting ourselves off from specialists can only lower our standards of living. ~Alan S. Blinder

Economic Thinking

"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society."

~Adam Smith The Wealth of Nations~

"It's the Economy, Stupid"

Yep, I just quoted Bill Clinton... Scary, huh?

I am fascinated by the economics of politics. Politicians use economics (and the current state of the economy) to persuade voters, but economics has a lot to say about the political arena too.

I've been reading about Median Voter Theory in Economics recently... Y'all will probably see some Median Voter Theory economic posts in the next few weeks... Until then some pictures to whet your appetite.

If it ain't broke... Weekly Economic Tidbit

Creative Destruction
A term coined in 1942 by Joseph Schumpeter in his work, Capitalism, Socialism and Democracy, to denote a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

Investopedia Commentary
In other words, creative destruction occurs when something new kills an old thing. A great example of this is personal computers. The industry, led by Microsoft and Intel, destroyed many mainframe computer companies--but in doing so, entrepreneurs created one of the most important inventions of this century.

Schumpeter goes so far as to say that the "process of Creative Destruction is the essential fact about capitalism." Unfortunately, while a great concept, this became one of the most overused buzzwords of the dotcom boom (and bust), with nearly every technology CEO talking about how creative destruction would replace the old economy with the new.

Laura's version... "If it ain't broke, don't fix it" is a myth. Break it! AND make it better. =)

Weekly Economic Principle

For you yourselves know how you ought to imitate us, because we were not idle when we were with you, nor did we eat anyone's bread without paying for it, but with toil and labor we worked night and day, that we might not be a burden to any of you. It was not because we do not have that right, but to give you in ourselves an example to imitate.

For even when we were with you, we would give you this command: If anyone is not willing to work, let him not eat. For we hear that some among you walk in idleness, not busy at work, but busybodies. Now such persons we command and encourage in the Lord Jesus Christ to do their work quietly and to earn their own living.

2 Thessalonians 3:7-12

Economic Thought of the Week

In civilized society he [man] stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them.

Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens.

Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old cloaths which another bestows upon him he exchanges for other old cloaths which suit him better, or for lodging, or for food, or for money, with which he can buy either food, cloaths, or lodging, as he has occasion.

~Adam Smith, The Wealth of Nations