"I place economy among the first and most important virtues and
public debt among the greatest of dangers; we must make our choice between
economy and liberty; or profusion and servitude. If we can prevent the
government from wasting the labors of the people
under the pretense of caring for them, they will be
happy." (Thomas Jefferson)
In his statement, Jefferson used the term 'economy' in two slightly
different senses. When he said economy was "among the first and most
important virtues", he meant careful and thrifty
management of public revenue. When he said we have to choose between economy
and liberty, he was addressing the question of where the focus of government
should be - whether government should expand its budget
and provide public services or focus on protecting
life, liberty, and property.
Jefferson understood better that any political leader in world history
that government 'profusion' could only be paid by "the labors of the people." He knew that a growing
government budget and an extension of the services government offers
"under the pretense of caring for [the
people]" can only come at the expense of
private property and individual liberty.
The so-called 'new economics' of John Maynard Keynes formalized and
gave quasi-scientific status to economic fallacies that are as old as
civilized man. He provided a rationalization for government intervention into
free market, for governmental control of the supply of money and credit, and
for policies of irresponsible deficit spending and inflationary expansionism.
With very few exceptions, politicians and members of academia have taken
his fallacies as axiomatic principles and expanded them into a hopelessly
complex system of terms, symbols, and mathematical equations. They foster the
view that only government, supported by countless task forces, high-paid
consultants, and innumerable subcommittees and bureaucratic agencies can find
the right set of 'compromises' to mange the mixed bag of interests in our
They allege that the government should manage the economy by inflating
the supply of money and credit to encourage production, while simultaneously
taxing the 'excess profits' of the most productive industries; by deficit
spending to provide the 'underprivileged' with 'equal opportunity', while
forcing the businesses that might have been able to employ them to provide
minimum wages, matching social security contributions, and unemployment
insurance; by imposing trade barriers to encourage domestic industry, while
simultaneously providing 'developing' third world countries with low cost
loans or outright grants so that they will be our 'friends'; and the list
goes on and on.
As appealing as this sounds we can't reverse
cause and effect. Prosperity cannot be created with the stroke of a pen on a
new bill in Congress. A money printing press cannot
produce real wealth. If it could, we'd have eliminated poverty shortly
after Gutenburg's 1440 invention.
Economics isn't a mystical realm, nor is it the province of geniuses
or specialists with some kind of special insight akin to religious
revelation. If you balance your checkbook each
month and understand that you can't operate with a negative balance
indefinitely, you already know more about economics than most government
- Methods of a Wall
Street Master by Victor Sperandeo.
- Mises.org a website devoted to the Austrian School
of Economics, a school of economic thought founded by Carl Menger (Feb 28, 1840 - Feb 26, 1921) with his work Principles of Economics published in 1871.