100% economics, zero percent politics. It’s the way forward.
So much money and energy have been poured into politics in the last years and decades. What has it achieved? Dysfunction, debt, deficits, disrespect for America and its institutions, disdain for its politicians, and division between Americans.
Politics is poison. It is corrosive acid persistently poured onto the faces of a prostrate and powerless citizenry. It is evil, and it corrupts all the people who practice it.
Our proposal is for an end to politics and a replacement with the thought processes of economics, the science of human thriving. We’d prefer everyone to stop thinking in political terms and start thinking in economic terms. Here are five principles to begin with.
Economics is about creating value for others. Politics is the destruction of value.
In thinking economically, we investigate how we can create value for others. This is the definition of productivity and it’s the way we earn. The nexus of value is the mutual voluntary exchange. It must be an exchange – we receive reward in return for giving valuable service. It must be mutual – both parties feel they are better off as a result of the exchange, that’s why they enter into it. And it must be voluntary; force and coercion have no place and make no sense in the assessment of value.
Politicians produce nothing. Governments produces nothing. They either destroy value through regulation and restriction, or they confiscate it for their own purposes, which include redistribution of the value produced by others to those who vote for them.
Economics operates on empathy. Politics operates on disagreement and antagonism.
To design a mutual voluntary exchange requires empathy, or what Adam Smith called fellow-feeling. Since value is subjective – a perception on the part of the buyer in the exchange – it is necessary for each participant to understand the subjective preferences of the other. Empathy is getting inside the other’s head, walking in their shoes, understanding how they feel. Ultimately, this produces sympathy for their situation and understanding of their way of thinking. It breeds tolerance.
Politicians seek to divide. There must be losers so that their side can win. They identify what their own supporters dislike in the policies and communications and style of the other party, and then they focus – relentlessly, viciously, hurtfully – on those differences. Successful politicians generate hate among 50% of the voters, and, although they don’t care about it, among the majority of citizens, since most don’t vote. Hatred and mutual antagonism are their stock in trade.
Economics succeeds through the natural collaboration of people. Politics succeeds by exercising power over people.
In the pursuit of mutual voluntary exchanges, and in building firms and supply chains to bring better products at lower cost to more and more people, economics builds on the natural collaboration of mankind. It’s how we built a system that has raised the standards of living of so many billions of people, including transcending poverty for most.
Politicians do not want people to rise. They want them to be dependent on government welfare, government bureaucracies, and government education. They want power over people, and to that end, they must divide people and disallow collaboration. They create antipathy where it never existed before. They make us live in political slavery to a government we don’t want and rules we never agreed to.
Production is the economic measure of success. Politics is consumption without production.
The wealth of an individual, a family, a neighborhood, a town, a state or a country is what it produces. We exchange what we produce for other goods and services, many of which we consume, but production comes first. Production is what we live for, and what we work for. We sacrifice leisure time and other consumption opportunities now, in order to produce and lay down a store of savings that we can consume in the future when we hand the reins of production to another generation. Ultimately, we aim to produce happiness. We certainly don’t aim to consume it – otherwise it would quickly be gone.
Politicians don’t produce, and they don’t want citizens to focus on production as their primary activity. They want us to consume, and to be dependent consumers. By producing money out of thin air, by redistributing the fruits of production of a minority of citizens to a majority of citizens, they create a culture of consumption. Economists call this high time preference: politicians want a citizenry that is dependent, complacent and slothful and will demand everything now without working for it. That way, politicians can exploit their monopoly over money and their unconstrained debt and deficit spending in order to create a mirage of consumption without production. Whereas economics prizes the future, believing in an ability to make it better, politicians fear the future and focus completely on the present. Their scheme can not last, so they can’t even contemplate the future.
Prices and profits are the information signals of the free market. Politicians suppress both.
The system of economic freedom is quite simple. Prices are the signals that consumers send to producers to indicate that they perceive value. If a producer receives a price that more than covers the cost of production, we call that profit. It’s a signal that the producer has created value with the resources he or she has used. If there is no profit, the producer will rearrange production until there is a positive profit signal, or move on to another business to try a new way to create value. These two signals keep the economic system based on creative entrepreneurship humming. They have produced all of human economic progress.
Governments and politicians try to suppress both signals. They won’t tell us the price of TSA, or the FDA, or nuclear weapons, or a President’s travel on Air Force One. They also want to control prices in markets such as that for labor (via minimum wage legislation), pharmaceuticals (via regulation) and many more. And they certainly would not operate on the profit principle in their monopolistic supply chains of education or building roads or managing national parks or invading Afghanistan.
100% Economics, Zero % Politics.
The mantra of 100% economics and zero percent politics may seem idealistic and distant. But we are focused on the individual. If one person can start thinking and living this way and making progress towards the goal, then another can, and another and pretty soon we have a movement. Let’s at least start contemplating the possibility.