Trading Post Capitalism – The Millennial Mind

The subject of economics has become one of the most easily misconstrued elements of government function. The concept of healthy economic practice is so profoundly self-evident, that children have been able to learn the idea since the first grade without opening a book. A trading post expresses the simplest picture of capitalism: give me what I want, and I will give you what you want. Other than supply and demand, the third element of economics is need. Being able to prudently evaluate that need, as well as its effect on the community’s economy, demands that a moral choice be made in order to alleviate or satisfy that need. Once a government has adopted a practice or policy that superficially addresses the problem, without taking into account any long term detrimental effects, an immoral practice has been enacted.

Ever since our first grade classmate wanted to trade our Snack Pack pudding for their Pringles potato chips, we’ve understood basic economics. The beauty of that interaction is the freedom to say “yes” or “no.” What one desires and another has to offer is the foundation for free market capitalism. The individual freedom to come to a mutually beneficial agreement is nothing short of phenomenal. The interaction is no different than when business owners trade labor for services. Capitalism allows for individual trade to occur without governmental interference, regulation, or taxation. Other forms of monetary governances, such as socialism and communism, directly oppose that liberty to choose. Within socialism, the government makes the choice for the individual, even when it is not wanted or needed.

Social engineers are enamored by government’s ability to intervene in human development; so much so, that they usually request intervention without proper calculation of the cost to a community. Let’s say a town wants to build a tunnel through a mountain side to increase transportation services for its citizens. That is commendable. However, if the government wants to build a tunnel, not to improve transportation but rather for the purpose of creating jobs, the net result will be a significant fiscal shortfall. The tunnel will take $12 million tax dollars to complete and will require the labor of 500 people. The town sees that the tunnel is built, and 500 people had temporary employment, but they do not perceive that they are out $12 million dollars. That same $12 million could have gone toward school development or police force improvements that would now be delayed or forgotten.

Let’s take this a step further. Government taxes are a third party element in an exchange of services. If there is a public project that the government wants to fund, but it does not have enough to complete it, the government will take out a loan. This introduces a fourth party to the transaction. On the surface, it looks like the government is paying off the loan. In actuality, the tax payers are paying off that loan. Quite literally, the government is spending future tax dollars which belong to the tax payers. Should the government continue to approve “projects” that it cannot pay for outright; the deeper it will dive into debt. The more debt the government accumulates, the less the government is able to perform its first purpose: to protect its citizens.

If a government is promoting its ability to keep its programs while continuing to increase its debt, it is lying. Furthermore, the increasing debt is literally stealing from its tax payers. The government’s promises become nothing more than valueless words.

The Judeo-Christian perspective states that, “In all labor there is profit, but idle chatter leads only to poverty.”

To express it even more simply, if the government proposes a program that will not directly produce a profit, the program should not be enacted. When a community, city, state, or country wants or needs a particular service, they should be able to look to the government solely as a means of stop-loss precaution. Once a government aims to act on behalf of its tax payers without considering the actual cost to the tax payers, the government has violated the individuals’ liberty to choose.

Famous French economist, Frédéric Bastiat stated, “Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.”

This is a lesson too easily forgotten.
By: Rosemary Dewar