First Things

Ideas that are so basic and fundamental that they are beginning points of thinking I call “first things”.
An example of this is the idea that nothing can be got from nothing. In economics this particular “first thing” is fundamental.  But wait, you might protest, the government can create money from nothing and then exchange that money for something; isn’t that getting something from nothing? No, and we know this because it violates a fundamental commonsense principle… or “first thing”.

Economics is a kinfolk of global warming and evolution in this way. A thing is made so complicated that “first things” are lost sight of. Plausible explanations about a thing, combined with a highly technical language, combined also with conclusions we desperately desire to be true, mixed with academic browbeating and political correctness, can lead otherwise smart people to believe that man can change the temperature of the planet through a tax, that he himself exists through a chain of events that started from nothing, and that wealth can be created by printing money.

But though we may not be able to argue against the millions of technical details thrown at us, as long as we do not lose sight of first things we will not have to fall prey to dazzling displays of BS.  Politics has usurped true science.  There are political motivations having nothing to do with the sciences at hand, but which are driving many of the issues supposedly based on science.   The modern acceptance for scientific consensus is an excellent example of this.  Man would do well to remember his past experiences with scientific “consensus” and make all attempts to avoid its advancement-retarding dogma.

Science means knowledge, that is, what is known and not what is politically acceptable and presupposed.  We live among the wonders of a scientific age which can be intimidating. There is much every person doesn’t understand which can make us susceptible to intimidation by intellectual words, charts and doublespeak.  But we need not be the moronic patsys, of others who are themselves moronic patsies, as long as we don’t lose sight of first things.

Advertisements

5 Comments

Filed under Economics, Human Nature

5 responses to “First Things

  1. My first thing is God, HIS WORD and HIS SON. Good enough for me.

  2. In a fiat money system, all money is created from nothing. Are you advocating a return to the gold standard? If not, what is your suggested basis for the amount of money in circulation?

    • The premise of the post is that we should never forget the basics, like, for example, you can’t get something from nothing. The maxim “you can’t get something from nothing” can only lead us to conclude that something from nothing is not being got with fiat money. So how is the value of fiat money then derived? The truth is that it is being stolen from those who, rather than spend everything they earned in their lives, and then some, saved instead.

      Your comment makes me wonder a couple of things: First, what do you see as the problem with the gold standard, if indeed you do see a problem? (this is not a trick question, only an opportunity for me to learn something.) Second, and perhaps more to the point of this post, do you actually think that the 16+ trillion dollars the US government now owes will ever be repaid, and does it matter?

      • Every time I comment here I get homework! 🙂

        I wrote a post about the gold standard before, comparing it to Europe’s single currency.

        Regarding US public debt; I suppose when most people think of this debt they envisage a future in which their children are impoverished through having to bear their share of the debt burden, much like a family who has taken out too large a mortgage and now have to make the repayments. But governments are not families; they actually never have to repay their debts. What they do have to do, however, is ensure that their tax base grows faster than the debt. The public debt incurred to fund WW2 was never actually repaid, it just became irrelevant as the tax base grew along with the economy. This debt, which was a larger percentage of GDP than today’s debt, also did not prevent your country having the biggest rise in incomes and living standards in your history.

        So what is wrong with having a large public debt then? As the debt grows, the interest payments grow – this costs the economy, and has to be taken up through taxation. So further to this, you need a government prepared to tax, and tax across the board. I see this as the root of your problem; every administration after Eisenhower has been reluctant to spread the tax burden. Your tax base is shrinking, rather than growing, and this is not sustainable.

        To come back to the question about fiat money; the quantity of money in circulation has to be derived somehow – the gold standard had its problems and is not the way to go. But the quantity of money should reflect the wealth, so to the extent that there is not enough money in circulation compared to the amount of goods and services being produced, printing additional money does create (or more accurately, realise) wealth. What concerns me is that Ben Bernanke is on record as saying he wants to drive up stock prices, to create a wealth effect for Americans, making them feel wealthy, coaxing them to spend and, in so doing, kick-starting the economy. But if the only thing keeping stock prices up is cheap money, how do you turn off the taps without causing a crash? He’s looking at things the wrong way and trying to keep up an illusion of wealth that is based on wealth that has already been destroyed.

  3. “Plausible explanations about a thing, combined with a highly technical language, combined also with conclusions we desperately desire to be true, mixed with academic browbeating and political correctness, can lead otherwise smart people to believe that man can change the temperature of the planet through a tax, that he himself exists through a chain of events that started from nothing, and that wealth can be created by printing money.”

    Well said. (Nasty recipe, though.)

Shoot... bullets only, no shotguns please.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s