On The Purpose of the Economy

I often hear discussions about the ‘purpose’ of an economy, and like finger nails on a chalk board, these discussions always grate my nerves.  The fact of the matter is that an economy has no singular purpose, reflecting the wishes and desires of all the people within the economy.  I purchased a vinyl record cleaning system earlier today.  That transaction had two purposes – to make money for the companies that built and sold the record cleaning system, and to allow me to make my vinyl records sound better.  I was going to have eggs, over easy, for breakfast today, but it turns out we are out of eggs.  Later today, my wife will buy eggs (and probably other things) from the grocery store.  That transaction’s purpose will be to supply my family with food, and to make money for the grocery store, and the people who produced the food we are going to buy.  Each person in an economy has a purpose with each transaction they make, and the economy is nothing more than the conglomerate of all of those transactions.  As such, the economy is comprised of purposes, but it has no ‘purpose’ of its own.

Many people like to look at the economy as if it is some kind of vehicle that needs to be steered, but really, it is impossible to steer the economy without steering the people who are a part of the economy.  To control an economy, giving it a sense of ‘purpose,’ is to control the people, changing the choices we have available to us in the hope of forcing us to make the choices government thinks we should make.  Socialists fluff over this, making it sound like they are asking to control ‘the economy,’ as if it were possible to do so without controlling people’s lives.

When Bernie Sanders says he wants to tax the holy hell out of businesses, that means he is going to tax the holy hell out of everyone who purchases anything a business creates.  If government taxes car companies, car companies increase their prices, and those who buy cars pay those taxes.  If government taxes food, the price of food goes up.  If government taxes the creation of electricity, our electric bills go up.  Companies do not pay taxes.  Companies may increase their prices, passing their taxes on to us consumers (and we are ALL consumers); they may pay their employees less, passing their taxes on to their employees; or they may make smaller returns for their investors, passing their taxes on to our pensions and 401K programs.  Whatever route they take, WE pay their taxes, and when Bernie says that large corporations are going to ‘feel the bern,’ really the bern is going to be felt in our wallets, and in the pockets of America’s retirees.

My favorite Bernie Sanders video is one where he questions the need for ’23 different brands’ of deodorant when we have ‘children starving in the streets.’  I have two responses for Bernie Sanders: 1) we do not have children starving in the streets, and 2) are you suggesting that children should eat deodorant?  Really, of course, what Bernie Sanders is saying is that government should force some of the resources currently going into the production of deodorant, into the production of food for children instead.  In other words, Bernie Sanders is saying, “To hell with anyone who wants a choice in what deodorant they use – I will dictate the allocation of resources in this country.”  That’s not ‘democratic socialism,’ but rather dictatorial communism.  Bernie, in this quote, has outted himself: Bernie Sanders is a communist.  Bernie Sanders also praises food lines.  What I don’t think Bernie Sanders understands, and nor do his followers, is that when you have food lines, the reason is that there is not enough food being produced.  Food lines are not caused by the production of deodorant, but by the errant belief that if we had less choice in deodorant, we would have more food – which is exactly what Bernie Sanders is saying.

Understand that if Bernie Sanders controlled our food production, you would not have access to the foods you want.  You would stand in lines, and would have to eat whatever food you were given, which would never be enough.  Understand that if someone like Bernie Sanders were able to take control of our economy, within a ten or twenty years, we really would have children starving in the streets.

The economy has no purpose, and no morals.  People have purposes, and each of us gets to decide what that purpose is going to be.  People have morals, and any economic system will reflect the morality of the people living within it.  I would venture that the United States has been a far more moral place, under capitalism, than Stalin’s Russia, or Mao’s China.  I would venture that America is more moral than is today’s Venezuela.  I would even venture that America is more moral than are the Scandinavian countries, where tax rates are prohibitively high, and even the rich cannot survive without government handouts.  It is not moral for an able-bodied person to demand that other people support them so that they do not need to work.  It is not moral to demand that your neighbor give you the money that your neighbor has earned.  When government uses force to make some people work for the betterment of other people, that’s generally called ‘slavery,’ and this is what socialism entails.  If that is your purpose, then I question your morality.

When an economy is left alone, it reacts to consumer sentiment, and nothing else.  If someone builds a widget and charges too much for it, someone else then builds a widget and takes all the business by charging less.  All businesses can choose to charge whatever they want, but no business can force someone to purchase their products, unless government enables them.  Elon Musk can charge whatever he wants, because he lives off of government subsidies and grants.  Outside of PayPal, no company Elon Musk has been a part of has ever, or will ever, cut a profit.  Elon Musk made his money the same way Bernie Sanders made his – by having the government tax people who work, and give that money to him.  Elon Musk can set whatever pricing he wants, as he is not reliant on selling anything to make money.  If Elon Musk could not steal money from working America, his businesses (other than PayPal) would quickly fail.  Elon Musk’s purpose is to grow his wealth by stealing from the American people, and it is only legal because our government makes it so.  Elon Musk also helps to define your purpose – a fraction of every dollar you earn is stolen from you by our government, and given to his companies.  Some of it he keeps as a ‘bonus’ or pays himself as his salary.  That portion of your work belongs to him, as do you when you are earning it.

I don’t personally appreciate being forced to work for the Elon Musks of the world.  I prefer to define my own purpose, and the only economy where such a thing is possible is a free market economy, in which the only purpose is the purpose I make for myself.  I want to define my own purposes, and I want you to be able to define your own purposes.  That’s how freedom works.  When government gets to define purpose for us, we are no longer free.  As a consequence, when someone like Bernie Sanders says ‘purpose’ in relation to the economy, the word we should hear is ‘bondage,’ for that is what it is.