How exactly the economy functions is a mystery to many. How are jobs created? Who decides what goods to produce, in what volume, and when?
It has been said that the economy works like the human body. Our vital systems continue to function without our actively directing them. We do not have to ‘tell’ our stomachs to digest food, our heart to pump blood around the body, our lungs to transport oxygen etc. This saying is of course entirely false. There is in fact a driving force behind everything our body does: the brain.
The brain is to the body what the government is to the economy. Without a central processing unit (brain), we would die since we would be unable to breathe, eat, etc. without a centralised process of coordination (government), we would also die because there would be no jobs, no food. Worst stlll, with no environmental regulation, the air we breathe would be dangerously toxic, consisting almost entirely of carbon dioxide, which is lethal to all living things.
Many millennia ago, most nations’ governments were tiny, just as their economies were also tiny. Even recently at the turn of the 20th century, the Gross Domestic Product of the United States was a tiny faction of the many trillions it is today. This wealth explosion has come with the expansion of the government into all aspects of our lives.
Once we understand the government’s central role in a modern economy, we can move on to consider some central axioms. We hold the following to be self-evidently true.
- Governments create wealth, jobs and income. Consider the example of the Soviet Union where there were no private enterprises at all. The fact that this economic superpower was able to increase potato production by record amounts each and every year shows that capitalism is simply unnecessary.
- Negative consumption is harmful. Also known as ‘saving’, individuals who do not spend all their net earnings in the economy on consumption are deluded. If they believe this selfish behaviour is making them somehow ‘richer’, it is clear that their taxes need increasing in order to find an equilibrium point.
- Low wages are corporate exploitation – corporations should not use the current absense of a ‘living wage’ to underpay workers. Employers should be damn happy that millennials are willing to give up some of their precious time to help out, yeah.
- Regulation is always preferable to a ‘market solution’. Greedy corporations were not exactly falling over themselves to cut out carbon pollution before the government stepped in. It took the likes of Goldman Sachs in an outstanding show of corporate citizenship to run the carbon credits market. Whilst the world is still incredibly hot, there is at last some hope for the last remaining polar bears of the Antarctic.
- High CEO pay is an inherent evil. Whilst it is true that movie stars like Matt Damon and Merryl Streep earn many millions, they give back in so many progressive ways and therefore deserve their pay. The corporate world breeds filthy bloodsuckers like Trump who spread only misery. Enough said.
- There is such a thing as a free lunch – you can find many people on food stamps eating for free. Already, I hear the jumped-up smug Austrian camp guffawing that ‘Ja, but someone picks up the bill, nein?’. Well, yes, obviously the Federal Reserve pays for this. But, guess what Fritz, the Fed can print as much money as it likes. So, Herr Pedantic, free lunches obviously cost nothing. Now why don’t you put that in your lederhosen and smoke it.