Okay. We’ve got the beginnings of a civilized society. We’ve got specialization of labor, law, police, military, and politicians. In spite of a great many false starts and wrong turns, the basic, innate decency of our species led us in a generally liberal course. People really did try to have decent government, and there were some genuinely decent people involved in government. From those instances, great progress was made, and marvelous principles were recorded. Yeah, I know. It took a long time, and there was a lot of blood and misery along the way, but we finally arrived at a sweltering room filled with grouchy old white guys in 1787. The document they crafted did, indeed, authorize the national government to hire employees and provide certain services. Obviously, all that government service requires wealth to pay the police, military, and judges. Ah. Back to money.
Where does a government get its wealth? From the people. What does government produce? Force. Nothing else. What was the first and only purpose of government? To be the trustee of force in the name of the people, according to the letter of their law. The people did the producing, and the government kept the boogers off ‘em. Does government fish? Make shoes? Run a blast furnace? Drive a truck? No. The government wields force. Remember that, because we’ll get into it in spades later. So if a government does not produce anything, where does it get its operating capital? From the people. The people have to want the government badly enough to voluntarily share their sustenance with it.
What is the maximum amount of wealth a government can have? 100% of the wealth of the people. Can a government have more wealth than that? No. It can print more money, but it can’t have more wealth. Like the ancient sheep deposits, the money printed by the government is a promise to redeem the notes for something of real value, generally specie. The money can’t have more value than the total, net wealth of the people.
Let’s say the entire wealth of the people is a hundred bucks. (Obviously, this is pre-Bush/Obama.) Now let’s say the government wishes to fund public art by buying, at outrageous prices, pieces of crap no working man in his right mind would even look at, much less buy. So the government seizes the entire wealth of the nation. Aesthetic enlightenment, however, comes high, and will require a lot more than a C-note, so the government just prints some more money – let’s say, a thousand bucks worth. Now the government has enough money to pay some bug-eating hippie for his abstract of sticks and turds.
But wait a minute. What is the wealth that stands behind that grand? There is still only a hundred bucks worth of real wealth. So instead of each dollar being worth 1/100th the wealth of the people, each dollar is now worth 1/1000th the wealth of the people. This is called inflation. There’s more money in circulation, but the value of each dollar is only a tenth what it was. That means the hippie got ripped off. Sure, he got paid, say, 800 bucks for his creation, but he can only buy 80 bucks worth of groceries.
Do you really think the grocer would have failed to notice the government’s theft of his money? What’s he going to do? He’s going to increase his prices in order to maintain his lifestyle because everything he buys is also ten times more expensive.
Seems simple, doesn’t it? Well, it is simple. In fact, it is so simple that many hundreds of hours of college education are required to obfuscate it. That, or a single election cycle.
Let’s digress for a minute. When you give someone a dollar for something, you are giving them one dollar’s worth of your life. You worked a certain period of time for that dollar, so, while the dollar is money, your time and skill are wealth. Next time someone says, “It’s only money,” run like the devil; he may be serious. Money stands for wealth, which stands for life. When a man pays you a wage, he is saying, “I value your time and skill enough to give you this portion of my life in exchange for it.”
When you go to a store to buy something, you tell the cashier, “I want to buy that.” The cashier asks, “Can you prove you’ve done something for someone else that they thought was worth a dollar’s worth of their life?”
You say, “By golly, I have, and here’s the dollar bill to prove it.” When you trade money for the goods that service your life, you are trading not only your own lifespan, but the lifespan of everyone involved in the chain of production and trade that led to your having that dollar bill. The moral person gets wealth – or money – only by providing services to other human beings.
Wow. How contemptible is that?
In a moral – ie, free – society, men and women trade freely of their time, skill, and the wealth they produce. If a free man sees a person in need, and wishes to help, he has the option of giving that person a bit of his life. This is called charity, and in my opinion, it is a very great virtue. Americans have always been the most charitable people on Earth, in no small part because they have had wealth enough to share. Ever try begging an apple from a starving guy? You’ll pull back a nub.
In a statist – ie, government controlled – society, men and women are taxed. The government takes money from them and redistributes it to those whom the government thinks deserve it. That is to say, some people (the government) take money from other people (the taxpayers) for the benefit of still other people (the supposedly poor.)
So, if the goal is to take care of the poor, and since the government cannot have more wealth than the combined wealth of its citizens, could not the poor be served as well by charity?
Of course, they could. Money given freely would serve them as well as money taken at gunpoint. It makes no difference to the poor. To the people in government, however, it makes an enormous difference. If men were left free to decide whom they would support, they might choose to support some who would not support government.
People in the government must enact force to take money from those who have it, keep a good bit for themselves, and give the rest to those who will vote for more government. There’s a cliché’ that says, “He who robs Peter to pay Paul can generally count on the support of Paul.” The statists will tell you that charity is inadequate – that only welfare, enforced at the point of a gun, can be adequate. That’s a stinking lie. The difference between charity and welfare is liberty.