THE LIBERTARIAN ENTERPRISE
Number 833, August 9, 2015
While the battle for equality before the
law was one of the most important political
revolutions in history, we were a nicer people
when we were free to offend one another.
Attribute to L. Neil Smith's The Libertarian Enterprise
Back when I wrote No Loopholes, it was an outgrowth of an attempted political thriller (with, of course, a strong libertarian bent) with the working title Extreme Justice.
I'm trying to get back to it (amid the distractions of day to day life and the onslaught of outrages from 1600 Penn and points east), and with your indulgence I'll share the random political speech, very much in draft form. Commentary is welcome.
Responsible capitalism is the most efficient economic system for producing total wealth. That's not an opinion, it's a definition: in responsible capitalism, individuals are paid for the value of the work they perform, no more—and no less. Any other approach—minimum wages; nepotism; "favors for friends"; crony capitalism; wage redistribution through government intervention; attempts to corner the market; hedge funds that rely on the collapse of companies, representing hundreds of thousands of person-years of accumulated value and wealth to make their profits—results in individuals who receive compensation greater than the value of the work they perform.
Which is ultimately destructive to an economy—to a society. Money that pays for value not received does not contribute to total wealth; it's a drag, a reduction in total wealth. It shrinks the pie. Money that is redirected based on fraud does not contribute to total wealth, no matter how much it temporarily enriches the defrauder; it shrinks the pie. Money taken in taxes to pay people who are not producing shrinks the pie—not to mention the added drain of paying the bureaucrats who collect and redistribute the taxes, and the bureaucrats who find other ways to hamper the economy. The central banks then use inflation to try to convince people that the pie is intact—but that doesn't grow the pie either. It's sort of like trying to hide the missing pie behind whipped cream—bad whipped cream.
Yes, responsible capitalism picks winners, those who work harder and smarter, and losers, those who work "for the weekend" or the good time or the bottle, or who don't work at all. But the total pie is bigger for everyone. The ways we presently have of splitting the pie all make it smaller—while irresponsibly enriching the political class, the lobbyists, and the crony capitalists.
Money flows through the economy through transactions between individuals. Misdirected money that creates no total wealth can create the appearance of prosperity, but the pie is still shrinking. In an engineering sense, the feedback is positive—the smaller the pie gets, the faster it shrinks. The situation is obviously, inherently unstable. If not stopped, the society collapses into chaos.
The US is dangerously close to that point,
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