“It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.”
Adam Smith said that in his groundbreaking writings on economics, The Wealth of Nations. First published in 1776, it’s more accurate and complete title is An Inquiry into the Nature and Causes of The Wealth of Nations. This monumental work laid the foundation for the demise of feudalism and the creation of capitalism as economies progressed from agricultural to industrial.
Smith’s writings bore great influence on our founding fathers, whose American Revolution was fought to separate these “colonies” from the aristocracy of mother England. A new society was to evolve, and with it a new economic system.
And it worked, with great aplomb. These United States have become the wealthiest and most powerful social studies experiment in the history of the planet.
Unfortunately, with that wealth and power has evolved a new aristocracy; a new group of overlords and underlings. The elite sect that has taken the roles of leadership in this country perceives itself to be the anointed caretakers of society, and far too many are happy to accept their handouts. With all due respect to Mr. Smith, it might be argued that the creed and underlying foundation of our society and economy today is more correctly that “it is from the benevolence of our government that we expect our dinner. Our dinner, our healthcare, our education, our homes… now and forevermore.”
Exactly how have we gotten to this place?
The industrial revolution grew the economy tremendously, and along with it the wealth of numerous capitalists. Then along came the “Great Depression” (the first one, not the current one), and with it came a dearth of employed folk.
During that same time period, a new theory of capitalist economics was emerging, promoted for the most part by John Maynard Keynes. Keynes’ theory was based on what he called the “circular flow of money;” essentially that one must spend in order for another to earn. For the economy to perform and grow, spending must occur, and it didn’t matter if that spending was accomplished by the private sector or by the government. The Depression offered the government an opportunity to put this theory into practice by spending great sums of money to provide for the needs of society. Coincidentally, those in power, spending that money and gaining the dependence of the electorate, sensed their power over the electorate growing as that dependence increased.
Politicians love power. Most of our current elected officials are independently wealthy, and they don’t need the relatively small stipend they receive for their public service. They’re in it for the power trip, and the more power they can obtain over the commoners, the greater the high. Today we have numerous government funded entitlement programs, created not out of the benevolence of the government, but out of a thirst for power.
But where does the government receive the resources with which to fund these programs? The government has no money, other than what they receive by taxing individuals and businesses, or what they print.
The value of our economy is represented by what that economy produces. Printing additional dollars without an offsetting increase in production means that each individual dollar is worth less, can purchase less, or conversely the cost of individual goods increases. This is commonly referred to as “inflation.” Similarly, increased taxation reduces the motivation for the businesses and workers in the economy to produce, and they produce less. Personal income is reduced while costs are increasing, all so the government can increase the funding it receives and in turn gives to those who don’t produce, and who today feel entitled not to produce. Keynes might call this the “circle of demotivation.”
And when it reaches equilibrium, we have a society totally dependent on a very powerful government that has no income, no production against which to impose taxation, and is only printing worthless money, i.e. Eastern Europe twenty years ago. Current government actions to “stimulate” the economy are a further example of Keynesian economic theory. Current government actions to take over healthcare, representing about one-sixth of our economy, is another example of elected officials trying to satiate their thirst for power.
This is where the current administration is trying to take us. The majority of polled Americans have said it is not where they want to go. The present opposition party is apparently powerless to stop it, and doesn’t have the spine to try. The current leadership of the Republican Party doesn’t have a clue as to what to do, (visit our home page for numerous analyses) or perhaps their own lust for power and fear of losing it disables them from representing the majority of Americans.
How do we stop it? Many have suggested a third political party, a “Tea Party” party, but history would indicate that this would only dilute the opposition vote and allow the current practices to continue. We need, rather, for the conservative movement to embrace the Republican Party, and for that party to embrace the conservative movement. We must work together to prevent Keynesian Economics from leading us to Socialism, for the “socialist utopia” envisioned by many is anything but utopian. Ask anyone who lived on the east side of the Berlin Wall who is old enough to remember. Ask anyone who lives in inner-city Detroit today.
The silent majority, which has recently found its voice, must work within the existing structure in order to prevail. The “big tent” leadership of the GOP must step aside, or otherwise be removed. Voices of reason must overwhelm voices of moderation. Voices of passion must rise over voices of ambivalence.
It is a commonly held belief that the Republican Party will prevail in the next election cycle, and perhaps the cycle after it. But unless the leadership of that party is replaced, they won’t have an inkling what to do with their newly restored powers. While we must escape Barack Obama and the leftist governance of the Democratic majority, returning power to the party of George W. Bush and John McCain won’t gain us a thing.
Remember, “it is not from the benevolence of” the government “that we expect our dinner, but from their regard to their own interest.” It’s time for believers in the Constitution, a small federal government, individual rights and responsibilities, and benevolence driven by a love for fellow man rather than a thirst for power, to impose our interests on our economy and our society through our government.
It’s time for the butcher, the brewer and the baker to take this country back from the Ivy League aristocracy and the Hollywood establishment.