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  Quotations - General  
[Quote No.28596] Need Area: Money > General
"It is the sign of a weak mind to be unable to bear wealth. [humbly] " - Seneca

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[Quote No.28615] Need Area: Money > General
"Wealth is the slave of a wise man. The master of a fool." - Seneca

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[Quote No.28630] Need Area: Money > General
"[Poem:]

Satan is wiser now than before,
And tempts by making rich instead of poor.
[Because when money is no barrier,
The moral will-power must be more]

" - Alexander Pope
English poet
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[Quote No.28723] Need Area: Money > General
"I care for riches, to make gifts To friends, or lead a sick man back to health With ease and plenty. Else small aid is wealth For daily gladness; once a man be done With hunger, rich and poor are all as one." - Euripides
(c. 484 B.C. - 407 B.C.), Greek writer of tragedy. Quoted from his play, 'Electra'.
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[Quote No.28764] Need Area: Money > General
"Wealth is [falsely believed to be] so much the greatest good that Fortune has to bestow that in the Latin and English languages it has usurped her name." - Lord Melbourne
(1779 - 1848), British statesman who was twice Prime Minister of England in the 1830's.
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[Quote No.28807] Need Area: Money > General
"[Meritocracy - personal reward for contribution to others:] That's how free enterprise really works; it rewards virtue - hard work, saving, investing, learning, taking risks, etc. As for those who spend too much and save too little - it kicks them in the derriere. [And in a compassionate capitalist society taxes from the capable provide a welfare safety net to support those who really can't support themselves]" - Bill Bonner
Founder of Agora Publishing and founder and editor of the financial newsletter, 'The Daily Reckoning'.
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[Quote No.28881] Need Area: Money > General
"There is only one class in the community that thinks more about money than the rich, and that is the poor. The poor can think of [almost] nothing else." - Oscar Wilde

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[Quote No.28885] Need Area: Money > General
"Accursed thirst [greed] for gold! What dost thou not compel [weak] mortals to do? [Latin translation of 'Quid non mortalia pectora cogis, Auri sacra fames?] " - Virgil
(70 BCE – 19 BCE), classical Roman poet. Quote from his epic poem, 'The Aeneid'.
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[Quote No.28887] Need Area: Money > General
"Your best asset is your own self, because you can become the person you want to be." - Warren Buffett
Highly successful value investor, Chairman of Berkshire Hathaway Inc and one of the richest men in the world.
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[Quote No.28891] Need Area: Money > General
"Empty pockets never held anyone back. Only empty heads and empty hearts can do that." - Norman Vincent Peale

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[Quote No.28966] Need Area: Money > General
"Net-worth should never be equated with self-worth." - Seymour@imagi-natives.com

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[Quote No.29083] Need Area: Money > General
"Money isn't the most important thing in life, but it's reasonably close to oxygen on the 'gotta have it' scale." - Zig Ziglar
American sales and business trainer and speaker.
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[Quote No.29213] Need Area: Money > General
"[Capitalism and capital:] Property is the fruit of labor; property is desirable; it is a positive good in the world." - Abraham Lincoln

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[Quote No.29233] Need Area: Money > General
"The charity [philanthropy] that hastens to proclaim its good deeds, ceases to be charity, and is only pride and ostentation." - William Hutton

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[Quote No.29235] Need Area: Money > General
"Money does not make you happy but it quiets the nerves." - Sean O'Casey

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[Quote No.29415] Need Area: Money > General
"Those who really desire to attain independence, have only to set their minds upon it, and adopt the proper means, as they do in regard to any other object which they wish to accomplish, and the thing is easily done." - P.T. Barnum
(1810 - 1891), American showman, entertainer and circus builder
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[Quote No.29616] Need Area: Money > General
"Few things are necessary to make the wise man [or woman] happy while no amount of material wealth would satisfy a fool." - Og Mandino
(1923 - 1996), American motivational author and speaker
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[Quote No.29752] Need Area: Money > General
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes
(1883 - 1946), famous economist
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[Quote No.29923] Need Area: Money > General
"A penny is a lot of money, if you have not got a penny." - Yiddish Proverb

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[Quote No.29932] Need Area: Money > General
"If you want to know the value of money, try to borrow some." - Proverb (Portuguese)

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[Quote No.30161] Need Area: Money > General
"Money demands of you the highest virtues. [Contrary to popular misconception, it demands that you become, regardless of good or bad times - independent, knowledgeable, rational, imaginative, creative, compassionate (committed to taking the time, effort, money, risk and sacrifice to find new and better ways to serve the needs of your fellow human beings), moral (just see if you will get repeat business or referrals if you aren't), organised, energetic, persistent, patient, cooperative, humble, happy, grateful and stoic.]" - Ayn Rand
Libertarian philosopher and author
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[Quote No.30173] Need Area: Money > General
"[A lack of adequate capital, credit and profit can hinder even the best projects and people:] This mournful truth is everywhere confess'd, Slow rises worth by poverty depress'd." - Samuel Johnson

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[Quote No.30196] Need Area: Money > General
"The only man who makes money following the races is one who does it with a broom and shovel. [- not the gamblers!]" - Elbert Hubbard

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[Quote No.30209] Need Area: Money > General
"Underlying most arguments against the free market [and free enterprise] is a lack of belief in freedom itself." - Milton Friedman
(1912 – 2006), American Nobel Laureate economist and author, who strongly advocated the political, personal and economic benefits of free markets.
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[Quote No.30211] Need Area: Money > General
"Inflation is the one form of taxation that can be imposed without legislation. [Inflation is taxation without legislation.] " - Milton Friedman
(1912 – 2006), American Nobel Laureate economist and author, who strongly advocated the political, personal and economic benefits of free markets.
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[Quote No.30212] Need Area: Money > General
"Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government." - Milton Friedman
(1912 – 2006), American Nobel Laureate economist and author, who strongly advocated the political, personal and economic benefits of free markets.
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[Quote No.30215] Need Area: Money > General
"The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy." - Milton Friedman
(1912 – 2006), American Nobel Laureate economist and author, who strongly advocated the political, personal and economic benefits of free markets.
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[Quote No.30216] Need Area: Money > General
"The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system." - Milton Friedman
(1912 – 2006), American Nobel Laureate economist and author, who strongly advocated the political, personal and economic benefits of free markets.
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[Quote No.30227] Need Area: Money > General
"I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments." - Friedrich August von Hayek
(1899 - 1992), Austrian economist
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[Quote No.30229] Need Area: Money > General
"[Individual free market capitalism is superior to a state planned economy, because it better meets economic's 'raison d'etre' - 'reason for being'] ...of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know." - Friedrich August von Hayek
(1899 - 1992), Austrian economist
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[Quote No.30243] Need Area: Money > General
"The noble thing about private capitalism is that it forces those who may only be motivated by personal gain to raise the standard of living of others!" - Irwin A. Schiff
Licensed securities salesman and financial author, with a free market perspective. Quote from his book, 'How An Economy Grows and Why It Doesn't'.
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[Quote No.30244] Need Area: Money > General
"The influence of politicians [governments] on loan institutions [i.e. banks] operates...to... 1- Waste savings [which are accumulated through sacrificing immediate gratification] by encouraging the uneconomic use of credit [which includes borrowing to purchase too many depreciating assets, self-indulgent/immediate consumption by others and imprudent speculation] and 2- Discourage savings by reducing if not completely eliminating the rewards of thrift [through too low interest rates resulting eventually in high inflation and increased tax rates]." - Irwin A. Schiff
Licensed securities salesman and financial author, with a free market perspective. Quote from his book, 'How An Economy Grows and Why It Doesn't'.
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[Quote No.30245] Need Area: Money > General
"Basic economic principles do not change with the size of an economy...They're just harder to see because of more complicated agencies and terminology. The direct relationship between self-sacrifice [leading to], savings[leading to], credit [leading to], investment [leading to], economic incentive [leading to], social and economic progress is always the same." - Irwin A. Schiff
Licensed securities salesman and financial author, with a free market perspective. Quote from his book, 'How An Economy Grows and Why It Doesn't'.
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[Quote No.30259] Need Area: Money > General
"[Philanthropy:] Imagine for a minute that someone stuck a lottery ticket in your Christmas stocking and you won. You won big: $30 million-after taxes. And you decide to give it all away. 'I must be nuts,' you think. 'No one in their right mind would do that.' Actually, there are perfectly sane people who've done the equivalent. One of my favorites is a guy named Percy Ross. The son of an immigrant junk dealer, Ross grew up to be an entrepreneur who, after a couple of business failures, sold one of his successful ventures for $8 million. After dividing that money up four ways - a share for him, one for his wife, and one each for his two sons - Ross invested his. And his share grew into a vast fortune that he decided he would give away to people who really, truly needed it. Ross is in his 80s now, and he's given away that entire fortune. He started in 1977 by giving $50,000 to help 50 Vietnamese refugees make a new home in America. Then he threw a huge party for 1,050 poor children of Minneapolis, Minnesota. He gave each a bicycle - something he wanted as a child but his family could not afford. After the thrill of that Christmas party, he started a newspaper column called 'Thanks a Million'. Readers would write in and ask for money. If they asked the right way, Ross would send it. Ross doesn't reveal how much he actually gave away over the years, but many estimate it to be in the $30-million range. 'I never tell anybody,' he says. 'It's not a question of how much one gives. Am I a better person if I gave away $2 million than if I gave $1 million?' And that's not all. 'If I had twice as much,' he says, 'I still would have given it all away. For every person I helped, there were 400 to 500 I couldn't help.' Percy Ross is the kind of person a lot of us would like to be. I've got something interesting to tell you: No matter how bad the world seems at times, the human race has done a pretty good job of creating a Percy Ross-style system of values. It's what Connecticut College president Claire Gaudiani calls 'the wisdom tradition.' By that, she means that human beings have long recognized the value and importance of generosity - even generosity toward those who are from different backgrounds than we are. 'I suspect that we, as a species, are hardwired to be generous - that this is a survival mechanism of our species,' she says. Gaudiani is writing a book on the topic. In her research, she has found countless stories from over the ages that reveal the role compassion and charity play in the human tradition. What she has learned is that compassion and charity bind us together; they create a family out of strangers, a bond that sustains the race. One of the most famous is the story of the Good Samaritan. The Samaritan comes across a man who has been robbed and beaten, and even though the man's religion and ethnicity are different than his - major barriers, even today - the Good Samaritan reaches out to help that man because he recognizes what they have in common is their humanity. There are even older instances than this 2,000-year-old story, though. Jewish philosopher and physician Maimonides describes eight stages of tzedakah, or generosity. (The word tzedakah comes from the Hebrew word for 'righteousness,' 'justice,' or 'fairness': That's how important charity is to the Jewish tradition.) The first and lowest form of tzedakah is giving as little as possible, as infrequently as possible, and with as little respect toward the recipient as possible, Gaudiani says. Given that, you might expect the highest form of charity would be giving as much money as frequently as possible. But this isn't what Maimonides had in mind. Rather, he meant for us to imagine that some day, the person in need will be the only person able to save your family. And unless you give to that person today, your family will later perish. In this way, Gaudiani says, the giver and the recipient are partners. (If you've ever read Charlotte's Web by E. B. White, this is the kind of giving relationship that exists between the spider and the pig.) Islam also holds charity in high regard. In the sacred text of Islam, the Qur'an, there are five pillar concepts, Gaudiani says. Charity is the second pillar - second only to praising God. The prophet Muhammad makes an intriguing promise to believers: 'You will sustain and grow your wealth at the rate at which you give it away.' But we don't have to think of philanthropy as merely the act of giving away money. The word comes from philos and anthropos, the Greek words for 'love' and 'man.' The broader meaning of philanthropy, then, is love for our fellow human beings. In many cultures this broader idea is communicated as a call for individuals to take responsibility for the welfare of their community. The ancient Chinese philosopher Confucius, for example, believed people were only whole if they built four key types of bonds: those to family, the community, the nation, and the universe. Confucius advised that when you make a decision or take an action, you should consider its impact on each of those four levels, Gaudiani says. The theme of community carries over into the Yoruba faith of Nigeria, in which the god Ogun calls all people to care for one another. Interestingly enough, Gaudiani points out, Ogun called for the people in need to be part of the solution for others in even deeper need. The point is that everyone has something to give. Even if you never have a million dollars to give away, there are a million ways you can help other people. It takes a hard goal, a commitment, and a little of the Percy Ross spirit. If his story is any example, it's a great way to live a life with no regrets. When he finished giving away all of his money, Ross wrote a little thank you to his supporters: 'I'll continue to seek financial opportunities in our capitalistic society. In other words, I need to get a job. And, if by chance I can make another pile of money, I'll be back giving it away.' [Many of history's wealthiest individuals have set up foundations to help distribute their wealth. Examples include the Carnegie Corporation of New York, founded by steel magnate Andrew Carnegie; the Ford Foundation, set up by automobile titan Henry Ford and son; the Wellcome Trust, created according to the will of the British pharmaceuticals giant Sir Henry Wellcome; and the Bill and Melinda Gates Foundation, founded by software billionaires Bill and Melinda Gates. If you are interested in finding out more 'The Chronicle of Philanthropy', the 'newspaper of the nonprofit world,' keeps tabs on all things charitable.] " - Martha Brockenbrough
Quoted from a MSN Encarta article entitled, 'Giving Away Millions: It's Only Human'.
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[Quote No.30263] Need Area: Money > General
"Who is rich? He who rejoices in his portion!" - Talmud
The Hebrew sacred text that records rabbinic discussions pertaining to Jewish law, ethics, customs, and history. From their 'Sayings of the Fathers'
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[Quote No.30266] Need Area: Money > General
"Money is the most envied, but the least enjoyed. Health is the most enjoyed, but the least envied." - Charles Caleb Colton
(1780-1832) British clergyman, sportsman and author.
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[Quote No.30355] Need Area: Money > General
"Regarding the enormity of capitalism's success, both morally and practically, in different centuries, on far-flung continents, involving a hundred issues, the explanatory principle that will emerge is: capitalism is par excellence the system of liberated human brain power... [and that statism, in all its forms including] socialism, fails because its abrogation of liberty restricts, curtails and, in its most consistent form, strangles the freethinking mind upon which economic progress unqualifiedly depends." - Dr. Andrew Bernstein
Adjunct professor of philosophy at Pace University and at the State University of New York at Purchase. Quoted from his book, 'The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire'.
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[Quote No.30356] Need Area: Money > General
"It is important that each citizen takes their right to vote seriously. This means that they have a responsibility to make informed choices. This is only possible if they have at least a basic understanding of how their economy works. In this way individuals can then critique political parties and their economic policies not only on their goals but also the effects on all stakeholders of the methods, costs especially who bears them, incentives, potentially unintended consequences, unexpected complications and the adequacy of contingency plans. In this way initially good sounding policies that eventually wind up hurting society more than helping, can be avoided." - Seymour@imagi-natives.com

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[Quote No.30359] Need Area: Money > General
"[Philanthropy:] We should give as we would receive, cheerfully, quickly, and without hesitation; for there is no grace in a benefit that sticks to the fingers." - Seneca

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[Quote No.30378] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter – Introduction: The purpose of this work [and the chapters being quoted on www.imagi-natives.com] is to allow the reader who is interested in some difficult economic topics to grasp them and the free market viewpoint with very little effort. Having experienced the frustration of attempting to counter some of the statist [pro big government] viewpoints common in economic texts, news stories and other works and in discussions without such a reference guide, I decided to produce just such a work. The reader will find the topics to be some of the most common ones about which anti-free market writers find fault along with analysis of some technical items normally addressed in a modern economics course with which this author finds fault. It is hoped that in the space of one or two pages the reader will see the plausibility of the free market perspective and the fallacy of the opposite view. Here, in a short space the essence of the views will be presented with a reference listing for material which the reader can consult if interested in further pursuing the topic. This reference book provides an easy alternative source of information for those unfamiliar with all of the works and arguments advanced in regard to economic theory and the virtues of the free market." - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30379] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 1. Overview of the Schools of Economic Thought: There are four major schools of economic thought today. An understanding of these four schools of thought is necessary for an understanding of economics. The four schools [from the most pro big government to the least] are Marxist, Keynesian, Monetarist, and Austrian. Marxist economic thought is based on the writings of Karl Marx and Friedrich Engels, who wrote in the mid to late 1800's. Essentially, Marxist thought is based on economic determinism wherein societies go through the developmental stages of primitive communism, slave systems, feudalism, capitalism, socialism and finally communism. In each of these stages the economic system determines the views of those living during that system. Each includes a class struggle which leads inevitably to the next stage of societal development. Thus feudalism has a class struggle between landlord and serf which produces the next stage, capitalism. In capitalism the two classes are capitalist and worker. The conflict between capitalist and worker results in the overthrow of capitalism by the working class thus ushering in socialism and ending class conflicts. Socialism leads to the ultimate fate of humanity--communism. Keynesian views are named for the writings of John Maynard Keynes, particularly his 1936 book ‘The General Theory’. In this incredibly difficult book Keynes set forth an aggregated view of economic variables--total supply, total demand--working directly upon one another with no necessary tie to the actions of the individual decision-maker. Thus a ‘macro’ economics was established. Keynesians call for government to manage total demand--too little demand leads to unemployment while too much demand leads to inflation. Thus a dichotomy was established in theory: either the problem of inflation would attend or the problem of unemployment, but never both simultaneously. Keynes viewed the free market as generating either too much or too little demand, inherently. Thus the need (ever so conveniently for the job prospects of Keynesian economists!) for demand management by government informed by the wisdom of the Keynesians. Monetarist views are best represented by Milton Friedman and his followers who retained the Keynesian ‘macro’ approach. However, while viewing the economy in this manner Monetarists lay the emphasis not on spending so much as on the total supply of money--thus the name Monetarist. In other than the macro economic issues--inflation, unemployment and the ups and downs of the business cycle--Monetarists tend to take the individual actor as the basis of their economic reasoning in areas such as regulation, function of prices, advertising, international trade, etc. The Austrian school was begun by Carl Menger in the late 1800's and was ultimately developed to its fullest by Ludwig von Mises--both of Austria. The Austrian school developed a body of thought with a conscious emphasis on the acting individual as the ultimate basis for making sense of all economic issues. Along with this individualist emphasis is a subjectivist view of value and an orientation that all action is inherently future-oriented. This book is written in the Austrian tradition. [References: Friedman, Milton - 'Capitalism and Freedom', (Chicago: University of Chicago Press, 1962); Keynes, John Maynard - 'The General Theory of Employment, Interest and Money', (New York: Harcourt, Brace & Co., 1936); Marx, Karl and Friedrich Engels - 'The Communist Manifesto', (New York: Pocket Books, 1964); Mises, Ludwig von - 'Historical Setting of the Austrian School', (Auburn, Alabama: Ludwig von Mises Institute, 1984); Rothbard, Murray N. - 'The Essential Ludwig von Mises', (Auburn, Alabama: The Ludwig von Mises Institute, 1983); Schumpeter, Joseph - 'History of Economic Analysis', ( New York: Oxford University Press, 1978)]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30380] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 2. Entrepreneurship: Entrepreneurship can be defined as acting on perceived opportunities in the market in an attempt to gain profits. This acting involves being alert to profit possibilities, arranging financing, managing resources and seeing a project through to completion. Entrepreneurs can be regarded as heroic characters in the economy as they bear the risk from bringing new goods and services to the consumer. To quote from Ludwig von Mises in ‘Human Action’: ‘They are the leaders on the way to material progress. They are the first to understand that there is a discrepancy between what is done and what could be done. They guess what the consumers would like to have and are intent on providing them with these things.’ p. 336 Entrepreneurship is an art, every bit as much as creating a painting or sculpture. In each case--running a business and producing a work of art--the same elements abound: Conceiving the undertaking, taking resources and combining them into something new and different, risking those valuable resources in producing something which may ultimately prove to be of less value. It is very common in economics textbooks to ignore the entrepreneur when the texts discuss markets and competition. Their treatment implies that this alertness to profit possibilities, arrangement of financing, management of resources and seeing a project through to completion are all automatic within the market economy. They are not. Real flesh and blood people must act (and not once, but continuously), and be motivated to take these risks in order for commerce to proceed. The theory of perfect competition entirely eliminates any role for such a person. One of the reasons the role of entrepreneurs has been deemphasized is the methodology of positivism. This approach reduces economic phenomena to mathematics and graphs. Since the traits of alertness, energy, and enthusiasm so necessary for entrepreneurship do not lend themselves readily to mathematics and graphing they are neglected by many economists. Here we have a method displacing real-world events. Which is it we should do?: Throw out parts of reality (such as the above named traits) which do not fit with a method, or find a method that acknowledges and deals with such significant parts of reality? [References: Dolan, Edwin G. and David E. Lindsay - 'Economics', 6th edition, (Hinsdale, Illinois: Dryden Press, 1991) pp. 788 - 811; Folsom, Burt - 'Entrepreneurs vs. the State', (Reston, Virginia: Young America's Foundation, 1987); Gilder, George - 'The Spirit of Enterprise', (New York: Simon & Schuster, 1984) pp. 15 - 19; Kirzner, Israel - 'Competition and Entrepreneurship', (Chicago: University of Chicago Press, 1973); Mises, Ludwig von - 'Human Action', (Chicago: Henry Regnery Company, 1966) pp. 335 - 338; Rothbard, Murray N. - 'Man, Economy, and State', (Los Angeles: Nash Publishing, 1970) pp. 528 - 550]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30382] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 3. Profit/Loss System: The free market economy is a profit and loss system. Typically, profits are emphasized but it should be understood that losses are equally necessary for an efficient economy. The nature of profits are sometimes misconstrued by the general public. Profits are not an excess charge or an act of meanness by firms. Profits are a reward to the capitalist-entrepreneur for creating value. To understand this we must first understand the nature of exchange. When two parties trade they do so because they expect to receive something of greater value than that which they surrender; otherwise they would not waste their time engaging in exchanges. Now what is the nature of a profit? A businessman takes input resources--land, labor, materials, etc.--and recombines them to produce something different. For example: A car manufacturer takes $4,000 worth of materials, $6,000 worth of labor, $1,000 worth of overhead for a total cost of $11,000, and produces a car which sells for $15,000. The only way the car will sell for this $15,000 is if a consumer willingly parts with the money for the car, and based on the nature of exchange he will do so only if he prefers the car to the money. So the entrepreneur has taken $11,000 worth of resources and refashioned them into a car worth $15,000, thereby making a profit of $4,000. Where did the $4,000 profit come from? The answer is it was created by the manufacturer. He caused it to come into existence. This is a creative act just as producing an art work is a creative act. The worth or value of the materials, labor and overhead is what those items will sell for to willing buyers. By refashioning them into the car, the manufacturer has produced more value than he found in the world. Profits are a sign of value creation; making profits deserves to be hailed and honored for benefitting mankind. Now, take the example of losses. Are losses an act of kindness and not charging too much? In essence: No. Taking the same example, with input costs of $11,000, what if the manufacturer had produced a car that no one would buy for more than $11,000? If the manufacturer could not sell the car until the price was say, $8,000, then what does this mean? It means he has taken perfectly good resources--materials, labor and overhead--and recombined them in such a manner that they are now worth only $8,000 to buyers. He has destroyed value in the world. Such an act deserves condemnation for impoverishing humanity. Had the businessman not come on the scene the world would have been richer by $3,000 in value. Fortunately, in the free market we do not have to rely on social honor or condemnation to motivate producers to produce those goods which consumers prefer. This occurs naturally as profits allow successful producers continued production and wider control of resources while losses deprive others of control of resources and the ability to continue in production. Also, note the beauty of the market: Any failure in serving consumers, irrational pricing or choice of production is to that same degree an opportunity for profits. Thus, the market, while not perfect, is self-correcting. Reformers will better rectify any inadequacies they detect in the market by reaping the profits available from that inadequacy than by denouncing the very system which makes meaningful reform possible. Profits are a signal to use resources to produce items highly valued by consumers and losses are a signal to discontinue production of low-valued items. Losses are necessary to free up resources for use by those producing valued goods. Therefore we find that the interests of producers and consumers are harmonious, rather than at odds. [References: Dolan, Edwin G. and David E. Lindsay - 'Economics', 6th edition, (Hinsdale, Illinois: Dryden Press, 1991) pp. 788 - 811; Burris, Alan - 'A Liberty Primer', (Rochester, New York: Society for Individual Liberty, 1983) pp. 60 - 61; Gwartney, James D. and Richard L. Stroup - 'What Everyone Should Know About Economics and Prosperity', (Tallahasee, Florida: James Madison Institute, 1993) pp. 21 - 23; Friedman, Milton and Rose - 'Free to Choose', (New York: Harcourt, Brace, Jovanovich, 1980) pp. 9 - 38; Hazlitt, Henry - 'Economics in One Lesson', (New Rochelle, New York: Arlington House, 1979) pp. 103 - 109; Mises, Ludwig von - 'Planning for Freedom', (South Holland, Illinois: Libertarian Press, 1974) pp. 108 - 149; Rand, Ayn - 'Atlas Shrugged', (New York: Random House, 1957) pp. 478 - 481; Rothbard, Murray N. - 'Man, Economy, and State', (Los Angeles: Nash Publishing, 1970) pp. 463 - 469]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30383] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 4. The Capitalist Function: Socialist theory (predicated on the labor theory of value) concludes that profits are necessarily value stolen from workers by capitalists. This conclusion is mistaken. The function of the capitalist is as useful as is the function of the worker; profits are as warranted as wages. The two functions the capitalist performs in the economy are the waiting function and the risk-bearing function. The waiting function occurs because all productive processes require time to complete. It is the capitalist who forgoes consumption by investing in the productive enterprise. While the worker is paid his wages as he works, the capitalist bears the burden of receiving payment only once the completed product has been sold. The risk-bearing function is the entrepreneurial function of bearing the burden that a productive process may turn out to be counterproductive--that is, the value of the good produced may be less than the value of resources used to produce it. While the worker is paid his wages for his work, the capitalist bears the burden of receiving payment only if the completed product is a success. Can either the waiting or the risk bearing function be abolished? No. Even in a socialist economy these two functions must take place. They are inherent in the nature of the productive process. The closest a socialist economy could come to abolishing the capitalist function would be to force upon the workers themselves the waiting and the risking. Notice that most workers are not too terribly interested in this option. They freely choose to enjoy current consumption rather than holding out for the prospect of greater payment in the future and prefer to be paid for their work, specifically, rather than being paid only if the product succeeds. In stark contrast to the mistaken socialist theory, the relation between workers and capitalists is harmonious. A division of labor occurs wherein each party specializes in a self-chosen manner, each reaping the benefits of the efforts of the other. [References: Block, Walter - 'Defending the Undefendable', (New York: Fleet Press Corporation, 1976) pp. 186 - 202; Lefevre, Robert - 'Lift Her Up, Tenderly', (Orange, California: Pinetree Press, n.d.) pp. 97 - 104; Mises, Ludwig von - 'The Economic Role of Saving and Capital Goods' in 'Free Market Economics: A Basic Reader' edited by Bettina Bien Greaves, (Irvington-on-Hudson, New York: Foundation for Economic Education, Inc., 1975) pp. 74 - 76; Mises, Ludwig von - 'Human Action', (Chicago: Henry Regnery Press, 1966) pp. 300 - 301; Rothbard, Murray N. - 'The Essential Ludwig von Mises, (Auburn, Alabama: The Ludwig von Mises Institute, 1983) pp. 12 -13; 'The Morality of Capitalism', (Irvington-on-Hudson, New York: Foundation for Economic Education, Inc., 1992)]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30384] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 5. The Minimum Wage: Minimum wage legislation is one of the great civil wrongs perpetrated against the low-skilled who need the opportunities which middle-class workers, future professionals and the self-employed can legally take for granted. What the minimum wage law does to the poor is to deny to them the same freely chosen opportunities others follow for their own well-being. A middle-class 20-year old college student, for example, can work part-time at $5.00 per hour for half the hours in a work week and attend classes to better his future employment prospects the other half. In effect, such a student is earning not $5.00 per hour for his efforts but a sub-minimum wage of only $2.50 for the full work week of 40 hours (20 hours on the job at $5.00 and 20 hours in class and study time at $0). And if the costs of tuition, books, and gas are included the student is possibly earning an effective wage which is negative! This is done by the student voluntarily--a subminimum wage effort is freely chosen as a civil right not denied by government. An up and coming 30-year old doctor chooses a similar route of economic well-being. The hours spent not only in undergraduate school as in the case of the 20-year old, but, in medical school as well, pay no wage. In fact, both are paying to learn now in order to earn a much higher income later. Again, the future doctor exercises this option as a civil right--there are no laws preventing him from doing so. An enterprising individual starting his own business will often lose money for months, even years, prior to earning a profit on a new venture. Again, he is earning a wage much less than that mandated by minimum wage legislation. But, he is perfectly free, as an entrepreneur, to engage in such behavior--it is not illegal. But what of the low-skilled citizen with no prospects of college training or a medical career or of starting his own business? Here the heavy hand of government literally outlaws an option freely chosen by others. A worker worth only $3.00 an hour to an employer is denied the opportunity to accept this low wage for the opportunity to learn not in the formal setting of a college classroom or a training hospital or as an actual business owner but in the workplace itself. It's a safe bet that most readers of this page made wage gains once on the job, not by way of formal training but by way of learning and proving themselves on their jobs. Anyone doubtful that the minimum wage law is a civil rights issue need only look at the unemployment statistics to see the truth of this question. The unemployment figures below make it clear that identifiable segments of society are being legally discriminated against--discriminated against because their low productive value places them in a position where they cannot legally choose the combination of wages and job training they may prefer. UNEMPLOYMENT RATE in August 1996 was: Overall - 5.1%, 16 - 19 years of age - 17.2%, Blacks 16 - 19 years of age - 37.6%, 25 - 54 years of age - 4.1% Source: Monthly Labor Review, October 1995 Given this analysis it must be asked why are what I'll call 'effective-wage rights' denied to some segments of society? The answer is that denying such a right to the low-skilled has no negative political consequences. Unlike other groups, these populations generally don't vote, don't contribute to campaigns, don't write letters-to-the-editor, and don't in general make themselves heard politically--these people can be denied a civil right the rest enjoy, because they do not count politically. The minimum wage law is a cruelty inflicted by government on a group of people who can afford it the least, while politicians reap the benefits of appearing to be kinder and gentler. It is a clear violation of the equal protection clause of the Fourteenth Amendment. In the name of the poor themselves, it is time to abolish this shameful civil wrong. [References: Brown, Susan, et. al. - 'The Incredible Bread Machine', (San Diego, California: World Research Inc, 1974) pp. 80 - 83; Friedman, Milton - 'Bright Promises, Dismal Performance', (New York: Harcourt, Brace and Jovanovich, 1983) pp. 16 - 19; Hazlitt, Henry - 'Economics in One Lesson', (New Rochelle, New York: Arlington House, 1979) pp. 134 - 139; Schiff, Irwin - 'The Biggest Con: How the Government is Fleecing You', (Hamden, Connecticut: Freedom Books, 1976) pp. 164 - 178; Sowell, Thomas - 'Preferential Policies', (New York: William Morrow and Company, Inc., 1990) pp. 27 - 28; Williams, Walter - 'The State Against Blacks', (New York: McGraw-Hill, 1982) pp. 33 - 51.]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30385] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 6. Price Gouging: Price gouging--charging higher prices under emergency conditions--evokes strong emotional responses that are understandable but terribly wrong-headed. In the words of economist Walter Williams, 'passionate issues require dispassionate analysis.' The passion generated by price increases for necessities in an emergency is just such a case. Three lines of analysis demonstrate that 'price gouging' is not only not offensive, but that preventing it would increase misery, and that it is even a desirable practice! Let's take for example, the case of some hot item during an emergency, say plywood as in the aftermath of a hurricane. Before the hurricane, plywood was selling for the nationwide price of $8.00. After the hurricane prices of $50.00 or more may not be uncommon. The first line of analysis should be the most meaningful for red, white and blue, freedom-loving Americans [or any other freedom loving people]. If one person (the seller) has plywood and is willing to part with it for $50.00, it is because he would prefer having the money to having the plywood. If another person (the buyer) has $50.00 and is willing to part with the money for the plywood, it is because he would prefer the plywood to the $50.00. No one is forced to engage in this transaction, individual freedom is preserved in this voluntary exchange, and it results in a mutual benefit. Can anything be less objectionable than a free exchange of goods which results in a mutual benefit? Secondly, a successful effort to prevent price gouging would harm the very intended beneficiaries in our example. With thousands of needs, there is a vastly increased demand for plywood. At the same time the storm has destroyed existing plywood (trapped under rubble, damaged, or lost) and made it exceptionally difficult to transport additional supplies into the area. Preventing increased prices as a way of allocating the reduced supply with the increased demand would result in a more severe shortage, and plywood going to uses that are less than the most urgently needed ones. An example: If one could sell a sheet of plywood for a legal or socially-stigmated maximum of $8.00, he may well decide to keep it for some relatively trivial use rather than part with it for a use considered by the potential buyer to be of the most urgent importance. At $50.00 the choice is likely to be otherwise. Misery is thereby increased by the implementation of measures to prevent price gouging. The point should also be made that the price of a good is determined by the actual conditions of supply and demand. The willingness and ability of buyers and sellers to trade is what establishes any particular price--before and after an emergency situation. In an emergency, the facts have obviously been changed. It is reactionary and a revolt against reality to demand a never-changing price forevermore in the ever-changing world we inhabit. And last, the desirable effect of successful 'price gouging' would be in the higher $50.00 price motivating sellers to increase the supply of plywood reaching the citizens in need. The fact is, the cost of sending goods into a disaster area is dramatically increased because of the damage. Trucks now take longer to reach their destination--time is money after all--the likelihood of driver and rig being trapped within the affected area is another increased cost, and the prospect of looters seizing merchants' goods has also increased. All of these and other factors have the effect of discouraging shipments at the old $8.00 price; the supplier could do just as well in any other area. The increased price resulting from the misnamed price gouging should be harnessed to encourage the needed supply--it is one bit of salvation disaster victims can scarcely afford to do without. None of this analysis is intended to disparage the heroic efforts of charitable relief agencies, only to pause to consider that in addition to the relief efforts, higher prices are themselves a necessity to assure an increased flow of goods in time of need. These higher prices are not a matter of what is fair or unfair, regardless of anyone's initial gut reaction, but a matter of what is, given the actual facts of the situation. [References: Block, Walter - 'Defending the Undefendable', (New York: Fleet Press Corporation, 1976) pp. 192 - 202; Brown, Susan, et. al. - 'The Incredible Bread Machine', (San Diego, California: World Research Inc, 1974) pp. 29 - 43; Hazlitt, Henry - 'Economics in One Lesson', (New Rochelle, New York: Arlington House, 1979) pp. 103 - 109; Rothbard, Murray N. - 'Government and Hurricane Hugo: A Deadly Combination' in 'The Economics of Liberty' edited by Llewellyn Rockwell, (Auburn, Alabama: The Ludwig von Mises Institute, 1990) pp. 136 - 140; Rothbard, Murray N. - 'Power and Market: Government and the Economy', (Auburn, Alabama: The Ludwig von Mises Institute, 1991) pp. 19 - 26; Sowell, Thomas - 'Pink and Brown People', (Stanford, California: Hoover Institution Press, 1981) pp. 72 - 74]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30386] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 7. Price Controls: Price controls are the political solution enacted to stop price inflation. [See Chapter 21 for an explanation of the cause of inflation.] The controls do not work. Prices are determined by supply (willingness and ability to sell) and demand (willingness and ability to buy). The price resulting from supply and demand which clears the market is not changed by a price control (a legal limit on price). The legal price is merely a misstatement of the actual conditions and is comparable to plugging a thermometer so that it never can read greater than 72 degrees even though the actual temperature may be higher. The law of supply and demand cannot be repealed. People will call for price controls as a way to make goods available cheaper than they otherwise would be. The price controls do not make the goods cheaper and in fact cause a shortage of those goods as the demand quantity will be greater than the supply quantity. Not only do price controls cause shortages but they in fact make goods MORE expensive! How can this be? The shortage resulting from the price controls causes consumers to pay for the good in question in ways other than a price payment to the seller. To take an example from the experience in the U.S.: the price of gasoline was legally limited between August 1971 and February 1981. At a time when gasoline could not be legally sold for more than 40 cents a gallon, the estimated free market -- supply and demand -- clearing price was 80 cents a gallon. Using a ten-gallon fill-up it would appear that the consumer is saving $4.00 per tank full (10 gallons x 80 cents versus 40 cents). While consumers are not paying as much to the seller for the gasoline directly, they are in fact paying dearly for the gasoline in other ways. Probably the greatest expense is in the form of the consumer's time. The shortage results in extensive time spent waiting in line for the purchase. Time is money; a consumer's time has value. Using a minimum figure of the consumer's time being worth $2.00 per hour, a two-hour wait in line per fill-up wipes out any alleged saving from the price controls. But the consumer is not through paying. The idled gasoline used waiting in line is another form of consumer payment, say 10 cents per fill-up. Now we have the price controls actually costing the consumer an extra 10 cents per tank full. And there are yet more costs to the consumer. There is a difficulty in buying gasoline when there is a shortage in that it takes extra mental energy and planning which is an aggravation (that is, a cost) for the consumer he would much rather avoid. (Doubt this last point? Check your own behavior: Do you call around to the gas stations in your area before stopping for a fill-up, or do you avoid that aggravation although you know that not checking will often result in paying a higher price than necessary?) These extra expenses continue in the form of the violence and the fear of such violence that can result from tensions mounting while waiting in long lines for gasoline (shootings did occur in this situation during the 1970's price controls). Other expenses might include the purchase of a siphon hose for legitimate or even illegitimate gasoline transfers from one vehicle to another. Also, siphoning gasoline carries its own severe health and safety costs when poorly executed! The fact that there is more demand than supply of gasoline generates a further consumer cost in reversing the normal buyer-seller relationship. The normal buyer-seller relationship is one of the seller courting the consumer, attempting to please the consumer as a means to the seller's financial success. But with the price control-induced shortage it is the buyer who must please the seller to be among the favored whom the seller blesses with his limited stock of goods! In the 1970's this reversal was played out as sellers dropped services from their routine -- no more tire pressure checks, oil checks, windshield cleaning, etc. All of these further consumer costs only make the expense of gasoline that much greater than the free market price. Consumers have the choice of paying the free market price for gasoline in dollars directly to the seller or paying an even higher controlled price in a combination of dollars and other costs. But there is a difference in these two forms of payment for gasoline. The difference is that the direct dollar payment to the seller is an inducement to supply gasoline. The payment by the consumer in other costs encourages no such supply. [References: Block, Walter, editor - 'Rent Control, Myths & Realities', (Vancouver, British Columbia: The Fraser Institute, 1981); Katz, Howard - 'The Paper Aristocracy', (New York: Books in Focus, Inc., 1976) pp. 113 - 115, 117; Reisman, George - 'The Government Against the Economy', (Ottawa, Illinois: Caroline House Publishers, Inc., 1979) pp. 63 - 148; Rothbard, Murray N. - 'Man, Economy, and State', (Los Angeles: Nash Publishing, 1970) pp. 528 - 550; Schuettinger, Robert and Eamonn F. Butler - 'Forty Centuries of Wage and Price Control: How Not to Fight Inflation', (Washington, D.C.: The Heritage Foundation, 1979); Skousen, Mark - 'Playing the Price Controls Game', (New Rochelle, New York: Arlington House Publishers, 1977) pp. 67 0 86, 109 - 126]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30387] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 8. Regulation: The conventional, but mistaken, understanding of regulation is that consumers or workers need protection from unscrupulous big businesses and that Congress wisely and compassionately responds to those needs to rein in nefarious businesses. Actually, business regulations were and are instigated at the behest of and for the benefit of the businesses so regulated. In effect, regulation is a teaming of business and government to the detriment of potential competitors--which the established businesses prefer not to face--and to the detriment of the consuming public. On a purely theoretical basis this has to be the anticipated fundamental status of regulation. This is because any business regulated by a government agency has a focused interest in the activities of that agency and will therefore spend a great deal of time and money making sure the regulations are enacted in such a way as to benefit the business. Consumers, on the other hand, have a myriad of interests and only a minor or passing concern about any particular industry and the regulations affecting it. Businesses in other words will naturally out-compete the consumer in the political realm where regulation originates. A few examples: The grandfather of regulatory bodies in the U. S. is the Interstate Commerce Commission established in 1887 to regulate railroads. The railroads had for years attempted to fix prices among themselves, only to find that each individual company found it to its individual benefit to cheat on such an agreement--each individual railroad firm hoping the others would stand by the agreed-upon higher price while it cut its own prices to increase business. Finally, the railroads themselves arranged for Congress to establish the I.C.C. so that the power of law would guarantee that the prices were not cut. When the new technology of trucks was available to compete--to the benefit of the consumers--with the railroads, the I.C.C. began regulating trucks in such a manner as to benefit the railroads. These truck regulations consisted of mandated routes (making trucks behave as if they were operating on tracks!), minimum prices and limits on what the trucks could carry and where they could carry it. Airlines were regulated beginning in 1938, and in the 40-year period from then until 1978 no new trunk airlines were granted a charter. These four decades saw a huge change in the airline business as airplane technology advanced from propellers to jets, from 20 seaters to 400 seaters, from speeds of 120 mph to speeds of 600 mph. Yet, the Civil Aeronautics Board found no need to allow new competitors into the growing industry. This fact alone makes it quite clear that the purpose of the regulation was not to protect the consumer but to protect the market of the established airlines. The word regulation, properly understood, should evoke thoughts such as protection of businesses from competitors, special privileges for established firms, and government efforts to exploit consumers. [References: Fellmeth, Robert - 'The Interstate Commerce Comission', (New York: Grossman Publishers, 1970); Friedman, Milton - 'Bright Promises, Dismal Performance', (New York: Harcourt, Brace and Jovanovich 1983) pp. 127 - 137; Kolko, Gabriel - 'Railroads and Regulation 1877 - 1916', (New York: W. W. Norton & Company, 1965); Kolko, Gabriel - 'The Triumph of Conservatism', (New York: The Free Press 1963); Stigler, George J. - 'The Citizen and the State', (Chicago: The University of Chicago Press, 1975) pp. 114 - 141; Twight, Charlotte - 'America's Emerging Fascist Economy', (New Rochelle, New York: Arlington House Publishers, 1975) pp. 70 - 112]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30388] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 9. Licensing: Licensing is a sub-category of regulation and so all of the same basic points regarding regulation apply to licensing. Licensing is sold to the public on the basis that it protects consumers from low quality. What licensing in fact does is protect the licensed from lower prices for their services! Licensing is a means by which a special interest group--those licensed--restrict the supply of a service in order to generate higher prices for themselves. Licensing overrides the preferences of consumers by setting the government as the decision maker in quality standards for various services. In effect, a particular level of quality is established by law thereby forbidding any lower quality services and depriving the consumer of his sovereignty. Many would claim that it is necessary to have such quality standards, but often the quality standards actually have very little to do with the service being rendered. The requirement of passing a 'History of Barbering' course in order to get a license to barber is one such example. But further, consumers often prefer and need--due to income limitations--cheaper, lower quality services. High licensing standards often require the equivalent of a Cadillac when many are better served by a Volkswagen. Also, the resulting higher prices which consumers face result in more do-it-yourself efforts and deferred work, often endangering the consumer more than licensing protects him. Besides, there are alternatives to coercive licensing. Quality standards voluntarily certified allow the consumer to shop for his preferred level of service (Underwriters Laboratories, Good Housekeeping seals, and insurance requirements are examples). Government licensing has preempted a vast array of certifications which would otherwise exist. These certifications would be driven by consumer demand rather than political pull--undeniably a more satisfactory arrangement for the consumer. [References: Burris, Alan - 'A Liberty Primer', (Rochester, New York: Society for Individual Liberty, 1983) pp. 227 - 228; Friedman, Milton - 'Capitalism and Freedom', (Chicago: The University of Chicago Press, 1975) pp. 137 - 161; Novak, Michael - 'The Spirit of Democratic Capitalism', (New York: Simon and Schuster, 1982); Rottenberg, Simon - 'Occupational Licensure and Regulation', (Washington, D. C.: American Enterprise Institute, 1980); Williams, Walter - 'The State Against Blacks', (New York: McGraw-Hill, 1982) pp. 67 - 107; Young, David - 'The Rule of Experts', (Washington, D. C.: The Cato Institute, 1987)]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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[Quote No.30389] Need Area: Money > General
"'The Concise Guide To Economics' [from a libertarian-Austrian perspective] by Jim Cox: Chapter 10.Monopoly: In the conventional positivist-based methodology found in today's textbooks, the term 'monopoly' has been warped into any firm facing a falling demand curve. Since all firms face a falling demand curve, the word 'monopoly' has been rendered meaningless. The original concept of monopoly meant an exclusive privilege granted by the state, or literally one seller. Even the textbooks acknowledge these as types or sources of monopoly. Some pertinent examples of monopoly, correctly understood, would include the postal monopoly (it is illegal for anyone else to deliver first class mail for under $3.00 per letter), most power companies and cable television companies (it is illegal for anyone else to sell these services in their territory--much like the Mafia turf concept!), taxis in many cities (it is illegal to run without an expensive medallion which the state limits in quantity), and public schools (which force property owners to pay for them regardless of patronage). The irony of so many reformers who agonize over alleged monopolies generated in the free market is that they never complain of the hordes of government-created monopolies. See for example Ralph Nader's 'The Monopoly Makers' for a confirmation of this point. One can only conclude that what so upsets these people is not monopolies but private property, businesses, and the free market. For surely the monopoly power the post office exercises on a daily basis and for decades now is far, far greater than any monopoly power a business may enjoy from voluntary consumer patronage. No market-earned business monopoly (in the sense of one seller) can forcibly eliminate its competitors or forcibly require revenues from its customers the way the Post Office and other government-granted monopolies do as a matter of routine. [References: Armentano, D. T. - 'Antitrust and Monopoly: Anatomy of a Policy Failure', (New York: John Wiley & Sons, 1982); Branden, Nathaniel - 'Common Fallacies about Capitalism' in 'Capitalism the Unknown Ideal' edited by Ayn Rand, (New York: New American Library, 1967) pp. 72 -77; Brown, Susan, et. al. - 'The Incredible Bread Machine', (San Diego, California: World Research Inc., 1974) pp. 66 - 79; Brozen, Yale - 'Is Government the Source of Monopoly?', (San Francisco: Cato Institute, 1979); Burris, Alan - 'A Liberty Primer', (Rochester, New York: Society for Individual Liberty, 1983) pp. 226 - 237; Rothbard, Murray N. - 'Man, Economy, and State', (Los Angeles: Nash Publishing, 1970) pp. 587 - 620.]" - Jim Cox
Associate Professor of Economics and Political Science at the Gwinnett Campus of Georgia Perimeter College in Lawrenceville, Georgia. He has taught the Principles of Economics courses for nearly 30 years, since 1979. From his excellent book, 'The Concise Guide To Economics'. [Please note this book and the above quote has a libertarian-Austrian economics perspective, which means that it stresses individual freedom and minimal government.] Reprinted here with the kind permission of the author.
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