Adam Smith. Karl Marx. Frederic Bastiat. John Maynard Keynes. Milton Friedman. Murray Rothbard. Paul Samuelson. No, these are not name contenders for the new family pets. These are some of the economists who have become dinner table conversation at our house this year. We discuss which ideas we like and we smile and laugh. We discuss which ones we don’t like and we boo and hiss. We talk about which ideas got used and which ones didn’t. We dream about what it would be like if we actually tried some of the better ones. We discuss which ones we are living and really shouldn’t be. So, pull up a chair and join in.
The one concept of Keynesian economics, the theory introduced by John Maynard Keynes, that has not so silently become a prevailing thought in our country is that of Agenda. Keynes said that economic ‘experts’ should determine the Agenda and Non-Agenda of our nation and then politics should be the vehicle for creating new forms to achieve the Agenda. Now, in my house when someone has an agenda and sends someone else out to create a path to achieve it, somebody is going to end up in tears. Unfortunately, it isn’t all that different in politics – only the taxpayers generally end up crying. Economists are like the big sisters who send little brother to eagerly sell the idea of cookies before dinner to the parents. This is exactly what our government LOVES about Keynesian economics. They have someone else – an economic ‘expert’ – think up a new policy or program that appears to solve some of the current problems in our economy. Then the politicians can work to sell it, implement it and take credit for it. They definitely get their cookies too.
Prevailing Keynesian economic thought holds that the best way out of a pinch in the economy is to spend. Spending will make the economy grow, and a growing economy looks great on paper. That is what the stimulus package was all about. It’s called fiscal policy. We have been practicing this idea of spending our way out of trouble for quite a few years now and what it seems to do in actuality is increase our debt. “The burden of debt is as destructive to freedom as subjugation by conquest,” (Cleon Skousen, The Five Thousand Year Leap). Adam Smith, an economist who influenced our founding generation, was a proponent of laissez-faire or ‘let it alone’ economics. He taught a sound economic principle: The way to wealth for individuals is to save and invest wisely. The way to wealth for nations is for the individuals of that nation to save and invest wisely. A government is made up of people and for the economics of the nation to be sound, the economics of the people must be sound. It doesn’t work the other way around. In other words a country cannot be wealthy unless its people are wealthy. “The highest level of prosperity occurs when there is a free-market economy and a minimum of government regulations,” (Skousen, The Five Thousand Year Leap). How does that fit with what we are choosing today? See how too many cookies before dinner can ruin your appetite?
Another Keynesian concept is that the government should be making the decisions people are not making. I don’t know about you, but last I checked ‘government’ doesn’t have a brain with which to think. What it does have is a collection of people, hopefully some with brains, who make decisions on behalf of us all. Bastiat, a French economist who fought for a free market, said that collective rights should be an extension of individual rights. The government cannot enforce a right or extend a right that does not exist for the individual. The government has the right to protect, by force, personal property because individuals have the right to protect their own property by force. By the same logic the government does not have the right to equalize property (through taxes, etc.) because individuals do not have the right to take wealth from one citizen in order to equalize the wealth and give to another. Does your daughter have the right to take away her little brother’s cookie and give it to the neighbor girl? No, of course not. It isn’t just. She can give her own cookie away, but she can’t take one from someone else and give it to another. Funny, but kids get this. They know plunder is wrong. That’s why they sneak. We voters seem to forget that just because plunder is legal, it doesn’t mean it is right.
So, if you are getting ready to spend your next stimulus check, let me give you some sound advice. Save it. It will do more good than the spending. Government isn’t its own entity. It is a collection of people, of families. If we are not saving, if we are choosing to support the policies that are prevalent in government today, we are agreeing with them. If you don’t agree with the prevailing thought. If you don’t like the idea of government agenda, of increasing debt, of the state as an entity, what are you going to do about it? My suggestion…do a little reading. Discuss it with your family because, as Ronald Reagan said, “All great change in America begins at the dinner table.” Oh, and you should probably have some cookies ready.