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September 25 - October 30, 2021
ECONOMICS IS HAUNTED by more fallacies than any other study known to man.
the special pleading of selfish interests.
the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.
the fallacy of overlooking secondary consequences.
The more war destroys, the more it impoverishes, the greater is the postwar need.
West Germany followed sounder economic policies.
No man burns down his own house on the theory that the need to rebuild it will stimulate his energies.
Those who think that the destruction of war increases total “demand” forget that demand and supply are merely two sides of the same coin.
all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.
ultimately every dollar of government spending must be raised through a dollar of taxation.
What has happened is merely that one thing has been created instead of others.
The jobs destroyed by the taxes for the housing are not seen, nor are the goods and services that were never made.
is highly improbable that the projects thought up by the bureaucrats will provide the same net addition to wealth and welfare, per dollar expended, as would have been provided by the taxpayers themselves,
when it cannot adequately offset its years of losses against its years of gains,
I thought loses do offset taxable gains.
Proposals for an increased volume of credit, therefore, are merely another name for proposals for an increased burden of debt. They would seem considerably less inviting if they were habitually referred to by the second name instead of by the first.
government lenders will take risks with other people’s money (the taxpayers’) that private lenders will not take with their own money.
The banker is not giving something for nothing. He feels assured of repayment.
The proposal is frequently made that the government ought to assume the risks that are “too great for private industry.” This means that bureaucrats should be permitted to take risks with the taxpayers’ money that no one is willing to take with his own.
They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things.
Can you say "2007 housing crisis"?
in the long run they do not increase overall national production but encourage malinvestment.
The government never lends or gives anything to business that it does not take away from business.
the government can give no financial help to business that it does not first or finally take from business. The government’s funds all come from taxes.
AMONG THE MOST viable of all economic delusions is the belief that machines on net balance create unemployment.
The logical conclusion from this would be that the way to maximize jobs is to make all labor as inefficient and unproductive as possible.
Each of us is trying to save his own labor, to economize the means required to achieve his ends.
Why should freight be carried from Chicago to New York by railroad when we could employ enormously more men, for example, to carry it all on their backs?
Machines may be said to have given birth to this increased population; for without the machines, the world would not have been able to support it. Three out of every four of us, therefore, may be said to owe not only our jobs but our very lives to machines.
The real result of the machine is to increase production, to raise the standard of living, to increase economic welfare.
Full employment—very full employment; long, weary, back-breaking employment—is characteristic of precisely the nations that are most retarded industrially.
What machines do, to repeat, is to bring an increase in production and an increase in the standard of living.
Allied to this fallacy is the belief that there is just a fixed amount of work to be done in the world, and that, if we cannot add to this work by thinking up more cumbersome ways of doing it, at least we can think of devices for spreading it around among as large a number of people as possible.
In a modern exchange economy, the most work will be done when prices, costs and wages are in the best relations with each other.
When your money is taken by a thief, you get nothing in return. When your money is taken through taxes to support needless bureaucrats, precisely the same situation exists.
We are lucky, indeed, if the needless bureaucrats are mere easygoing loafers. They are more likely today to be energetic reformers busily discouraging and disrupting production.
THE ECONOMIC GOAL of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor.
We cannot continuously have the fullest production without full employment. But we can very easily have full employment without full production.
China and India are incomparably poorer than ourselves, but the main trouble from which they suffer is primitive production methods
Not any more!
The real question is not how many millions of jobs there will be in America ten years from now, but how much shall we produce, and what, in consequence, will be our standard of living?
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.
Labor in each country is more fully employed in doing just those things that it does best, instead of being forced to do things that it does inefficiently or badly.
makes the industries in which we are comparatively inefficient larger, and the industries in which we are comparatively efficient smaller.
But we ought always to know clearly what we are doing. It
they are accused of being uninformed, and they have the air of men who presume to dispute axioms.
The period of 1909 to 1914, as the basis of parity, was not selected at random. In terms of relative prices it was one of the most favorable periods to agriculture in our entire history.
We should merely have added an army of needless bureaucrats to carry out the program, with all of them lost to production.
The idea that an expanding economy implies that all industries must be simultaneously expanding is a profound error.
If we had tried to keep the horse-and-buggy trade artificially alive we should have slowed down the growth of the automobile industry and all the trades dependent on it.
the constant problem of choosing among alternative applications of labor,
an isolated individual or family that one occupation can expand only at the expense of all other occupations
it has simply been the result of a persistent tendency to overoptimism on the part of speculators. (This tendency seems to affect entrepreneurs in most competitive pursuits: as a class they are constantly, contrary to intention, subsidizing consumers.
