Money and Investing

Thursday, February 29, 2024

Ayn Rand: The Real Motive for the Socialist Mindset

The term "Capitalism" gets thrown around and has become a pejorative on the political left. So maybe we should define what we mean by "Capitalism".

A free market is one in which you get to make free choices. The opposite of this is tyranny, but no society is either completely free or completely tyrannical. Being free to make choices includes the freedom to make voluntary exchanges, to own property, and to do business for your own benefit.

The definition of Socialism is that the means of production is socially or collectively owned. By definition, the means of production can't be privately owned, which requires an authoritarian state to take away people's right to engage in commerce. This makes Socialism not only evil, but impractical because it prevents people from acting in their own benefit, and it prevents the innovation that would come from large numbers of people doing business. It also takes away incentive structures of success and failure that result in a more efficient free market.

One thing that the political right believes that maybe the political left doesn't is that people respond to incentives. Give people an incentive to not work and they won't work. Give people an incentive to be productive and innovative and they will be productive and innovative.

These claims are easily demonstrated by looking at how various economic systems have faired. Far-left economic systems have faired very poorly and have been a disaster for the people living under them. All you need for a prosperous society is to embrace a free market to at least some degree.

Wednesday, February 21, 2024

Why Democracies Always Fail

https://www.youtube.com/watch?v=lVw_Q5vf2Rg

Two centuries ago, a somewhat obscure Scotsman named Tytler made this profound observation: "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.

Wednesday, February 14, 2024

Richard Wolff: How You Are Being Exploited

https://www.youtube.com/watch?v=2mI_RMQEulw

Richard Wolff on Capitalism

This is a fundamental misunderstanding of economics. I have worked many different jobs with many different salaries. Not one of these I could have earned the same amount of money working on my own. I didn't have the resources. It was my employer that provided the facilities, the equipment, the customer base, and the know-how that allowed the business to make money. I voluntarily traded my labor for the resources that the employer provided. On my own, I wouldn't have been nearly as productive. I would have starved.

Voluntary exchange works.

Richard Wolff has never run a business. If he had, he would see the world differently.

Sunday, November 19, 2023

Why Socialism Always Fails

A pyramid scheme is ultimately unsustainable because it is based on faulty principles. Likewise, collectivism is unsustainable in the long run because it is a flawed theory. Socialism does not work because it is not consistent with fundamental principles of human behavior. The failure of socialism in countries around the world can be traced to one critical defect: it is a system that ignores incentives.

https://www.aei.org/carpe-diem/why-socialism-always-fails/