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The Consequences Of Inflation Are Malinvestment, Waste, A Wanton Redistribution Of Wealth And Income, The Growth Of Speculation And Gambling, Immorality And Corruption, Disillusionment, Social Resentment, Discontent, Upheaval And Riots, Bankruptcy, Increased Government Controls, And Eventual Collapse.

-Henry Hazlitt

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The Consequences Of Inflation

Henry Hazlitt

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The Consequences Of Inflation Are Malinvestment, Waste, A Wanton Redistribution Of Wealth And Income, The Growth Of Speculation And Gambling, Immorality And Corruption, Disillusionment, Social Resentment, Discontent, Upheaval And Riots, Bankruptcy, Increased Government Controls, And Eventual Collapse.

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Libertarians Are Learning To Their Sorrow That Big Businessmen Cannot Necessarily Be Relied Upon To Be Their Allies In The Battle Against Extension Of Governmental Encroachments.

When Any Welfare Scheme Is Being Proposed, Its Political Sponsors Always Dwell On What A Generous And Compassionate Government Should Pay To Paul; They Neglect To Mention That This Additional Money Must Be Seized From Peter.

The Crying Need Today Is Not For More Laws, But For Fewer. The World Must Be Saved From Its Saviors. If The Friends Of Liberty And Law Could Have Only One Slogan It Should Be: Stop The Remedies!

To Try To Cure Unemployment By Inflation Rather Than By Adjustment Of Specific Wage-rates Is Like Trying To Adjust The Piano To The Stool Rather Than The Stool To The Piano.

Yet It Ought To Be Clear That A Minimum Wage Law Is, At Best, A Limited Weapon For Combatting The Evil Of Low Wages, And That The Possible Good To Be Achieved By Such A Law Can Exceed The Possible Harm Only In Proportion As Its Aims Are Mode.

Government Welfarism, With Its Ever-increasing Army Of Pensioners And Other Beneficiaries, Is Fatally Easy To Launch And Fatally Easy To Extend, But Almost Impossible To Bring To A Halt - And Quite Impossible Politically To Reverse, No Matter How Obvious And Catastrophic Its Consequences Become.

The Government Has Nothing To Give To Anybody That It Doesn't First Take From Someone Else.

Practically All Government Attempts To Redistribute Wealth And Income Tend To Smother Productive Incentives And Lead Toward General Impoverishment.

The Surest Way For A Poor Nation To Stay Poor Is To Harass, Hobble, And Straitjacket Private Enterprise Or To Discourage Or Destroy It By Subsidized Government Competition, Oppressive Taxation, Or Outright Expropriation.

The Only Real Cure For Poverty Is Production.

Government Planning Always Involves Compulsion.

Economics Is Haunted By More Fallacies Than Any Other Study Known To Man. This Is No Accident. The Inherent Difficulties Of The Subject Would Be Great Enough In Any Case, But They Are Multiplied A Thousandfold By A Factor That Is Insignificant In, Say, Physics, Mathematics Or Medicine - The Special Pleading Of Selfish Interests.

A Vital Function Of The Free Market Is To Penalize Inefficiency And Misjudgment And To Reward Efficiency And Good Judgment. By Distorting Economic Calculations And Creating Illusory Profits, Inflation Will Destroy This Function.

The Proposal Is Frequently Made That The Government Ought To Assume The Risks That Are "too Great For Private Industry." This Means That Bureaucrats Should Be Permitted To Take Risks With The Tax Payer's Money That No One Is Willing To Take With His Own.

When The Government Makes Loans Or Subsidies To Business, What It Does Is To Tax Successful Private Business In Order To Support Unsuccessful Private Business.

Arbitrary Government Power Is Being Multiplied Daily By The Now Practically Unchallenged Assumption That Wherever There Is Any Problem Of Any Kind To Be Solved, Government Is The Agency To Step In And Solve It.

Prolonged Inflation Never 'stimulates' The Economy. On The Contrary, It Unbalances, Disrupts, And Misdirects Production And Employment.

Short-sighted And Impatient Efforts To Wipe Out Poverty By Severing The Connection Between Effort And Reward Can Only Lead To The Growth Of A Totalitarian State, And Destroy The Economic Progress That This Country Has So Dearly Bought.

The Sad Fact Is That Today Most Of The Heads Of Big Businesses In America Have Become So Confused Or Intimidated That, So Far From Carrying The Free Market To Argument To The Enemy, They Fail To Defend Themselves Adequately Even When Attacked.

In A Thousand Fields The Welfarists, Statists, Socialists, And Interventionists Are Daily Driving For More Restrictions On Individual Liberty.

What Is Put Into The Hands Of B Cannot Be Put Into The Hands Of A.

The Great Merit Of Gold Is Precisely That It Is Scarce; That Its Quantity Is Limited By Nature; That It Is Costly To Discover, To Mine, And To Process; And That It Cannot Be Created By Political Fiat Or Caprice.

The Mounting Burden Of Taxation Not Only Undermines Individual Incentives To Increased Work And Earnings, But In A Score Of Ways Discourages Capital Accumulation And Distorts, Unbalances, And Shrinks Production.

Capitalism Will Continue To Eliminate Mass Poverty In More And More Places And To An Increasingly Marked Extent If It Is Merely Permitted To Do So.

Once The Premise Is Accepted That Poverty Is Never The Fault Of The Poor But The Fault Of 'society,' Or Of 'the Capitalist System, Then There Is No Definable Limit To Be Set On Relief, And The Politicians Who Want To Be Elected Or Reelected Will Compete With Each Other In Proposing New 'welfare' Programs To Fill Some Hitherto 'unmet Need.'

Welfare Programs

Give Me The Clear Blue Sky Above My Head, And The Green Turf Beneath My Feet, A Winding Road Before Me, And A Three Hours' March To Dinner - And Then To Thinking!

You Cannot Make A Man Worth A Given Amount By Making It Illegal For Anyone To Offer Him Anything Less. You Merely Deprive Him Of The Right To Earn The Amount That His Abilities And Situation Would Permit Him To Earn, While You Deprive The Community Even Of The Moderate Services That He Is Capable Of Rendering. In Brief, For A Low Wage You Substitute Unemployment. You Do Harm All Around, With No Comparable Compensation.

A Man With A Scant Vocabulary Will Almost Certainly Be A Weak Thinker. The Richer And More Copious One's Vocabulary And The Greater One's Awareness Of Fine Distinctions And Subtle Nuances Of Meaning, The More Fertile And Precise Is Likely To Be One's Thinking. Knowledge Of Things And Knowledge Of The Words For Them Grow Together. If You Do Not Know The Words, You Can Hardly Know The Thing.

There Is A Profound Contrast Between The Effects Of Foreign Aid And Of Voluntary Private Investment: Foreign Aid Goes From Government To Government. It Is Therefore Almost Inevitably Statist And Socialistic.

The Army Of Relief And Other Subsidy Recipients Will Continue To Grow, And The Solvency Of The Government Will Become Increasingly Un Tenable, As Long As Part Of The Population Can Vote To Force The Other Part To Support It.

Inflation Is Not Only Unnecessary For Economic Growth. As Long As It Exists It Is The Enemy Of Economic Growth.

Economic Progress And Justice Do Not Consist In Superbly Equalized Destitution, But In The Constant Creation Of More And More Goods And Services, Of More And More Wealth And Income To Be Shared.

The Quickest And Surest Way To Production, Prosperity, And Economic Growth Is Through Private Enterprise. The Best Way For Governments To Encourage Private Enterprise Is To Establish Justice, To Enforce Contracts, To Insure Domestic Peace And Tranquility, To Protect Private Property, And To Secure The Blessings Of Liberty Including Economic Liberty - Which Means To Stop Putting Obstacles In The Way Of Private Enterprise.

Relief, Or Redistribution Of Income, Voluntary Or Coerced, Is Never The True Solution Of Poverty, But At Best A Makeshift, Which May Mask The Disease And Mitigate The Pain, But Provides No Basic Cure.

If A Government Resorts To Inflation, That Is, Creates Money In Order To Cover Its Budget Deficits Or Expands Credit In Order To Stimulate Business, Then No Power On Earth, No Gimmick, Device, Trick Or Even Indexation Can Prevent Its Economic Consequences.

In A Free Enterprise System, With An Honest And Stable Money, There Is Dominantly A Close Link Between Effort And Productivity, On The One Hand, And Economic Reward On The Other. Inflation Severs This Link. Reward Comes To Depend Less And Less On Effort And Production, And More And More On Successful Gambling And Luck.

Would-be Income Guarantors Ignore Or Despise The Capitalistic System That Makes Their Dreams Dreamable And Gives Their Redistribute-the-income Proposals Whatever Plausibility They Have.

The 'private Sector' Of The Economy Is, In Fact, The Voluntary Sector; And The 'public Sector' Is, In Fact, The Coercive Sector.

Everywhere The Means Is Erected Into The End, And The End Itself Is Forgotten.

Competition Always Tends To Bring About The Most Economical And Efficient Method Of Production. Those Who Are Most Successful In This Competition Will Acquire More Capital To Increase Their Production Still Further; Those Who Are Least Successful Will Be Forced Out Of The Field. So Capitalist Production Tends Constantly To Be Drawn Into The Hands Of The Most Efficient.

The Tendency Of Welfare Spending In The United States Has Been To Increase At An Exponential Rate.

..either Immediately Or Ultimately Every Dollar Of Government Spending Must Be Raised Through A Dollar Of Taxation. Once We Look At The Matter. In This Way, The Supposed Miracles Of Government Spending Will Appear In Another Light.

In Order That One Industry Might Grow Or Come Into Existence, A Hundred Other Industries Would Have To Shrink.

Liberty Is The Essential Basis, The Sine Qua Non, Of Morality.

When Each Of Us Is Free To Work Out His Own Economic Destiny, Within The Framework Of The Market Economy, The Institution Of Private Property, And The General Rule Of Law, We Will All Improve Our Economic Condition Much Faster Than When We Are Ordered Around By Bureaucrats.

The Times Call For Courage. The Times Call For Hard Work. But If The Demands Are High, It Is Because The Stakes Are Even Higher. They Are Nothing Less Than The Future Of Human Liberty, Which Means The Future Of Civilization.

Socialists Will Often Talk As If Some Form Of Superbly Equalized Destitution Were Preferable To "maldistributed" Plenty. A National Income That Is Rapidly Growing In Absolute Terms For Practically Everyone Will Be Deplored Because It Is Making The Rich Richer.

The Question Is Not Whether We Wish To See Everybody As Well Off As Possible. Among Men Of Good Will Such An Aim Can Be Taken For Granted. The Real Question Concerns The Proper Means Of Achieving It. And In Trying To Answer This We Must Never Lose Sight Of A Few Elementary Truisms. We Cannot Distribute More Wealth Than Is Created. We Cannot In The Long Run Pay Labor As A Whole More Than It Produces.

There Is No More Certain Way To Deter Employment Than To Harass And Penalize Employers.

Economics Is Haunted By More Fallacies Than Any Other Study Known To Man

The Most Obvious And Yet The Oldest And Most Stubborn Error On Which The Appeal Of Inflation Rests Is That Of Confusing ‘money’ With ‘wealth’…real Wealth, Of Course, Consists In What Is Produced And Consumed: The Food We Eat, The Clothes We Wear, The Houses We Live In. It Is Railways And Roads And Motor Cars; Ships And Planes And Factories; Schools And Churches And Theaters; Pianos, Paintings And Books. Yet So Powerful Is The Verbal Ambiguity That Confuses Money With Wealth, That Even Those Who At Times Recognize The Confusion Will Slide Back Into It In The Course Of Their Reasoning.

If There Is To Be No Loss Whatever Of Dignity Or Self-respect In Getting And Staying On Relief, Then There Can Be No Gain In Dignity Or Self-respect In Makings Some Sacrifices To Keep Off.

When Alexander The Great Visited The Philosopher Diogenes And Asked Whether He Could Do Anything For Him, Diogenes Is Said To Have Replied: ‘yes, Stand A Little Less Between Me And The Sun.’ It Is What Every Citizen Is Entitled To Ask Of His Government.

The More Things A Government Undertakes To Do, The Fewer Things It Can Do Completely. When The Government Tries To Do Everything It Must Do Everything Badly.

Multiculturalism Means Your Kid Has To Learn Some Wretched Tribal Dirge For The School Holiday Concert Instead Of Getting To Sing 'rudolph The Red-nosed Reindeer.'

Mere Inflation-that Is, The Mere Issuance Of More Money, With The Consequence Of Higher Wages And Prices-may Look Like The Creation Of More Demand. But In Terms Of The Actual Production And Exchange Of Real Things It Is Not.

The Ideas Which Now Pass For Brilliant Innovations And Advances Are In Fact Mere Revivals Of Ancient Errors, And A Further Proof Of The Dictum That Those Who Are Ignorant Of The Past Are Condemned To Repeat It.

New Taxes Are So Unpopular That Most 'social' Handout Schemes Are Originally Enacted Without Enough Increased Taxation To Pay For Them. The Result Is Chronic Government Deficits, Paid For By The Issuance Of Additional Paper Money.

The System Of Capitalism, Of The Market Economy, Is A System Of Freedom, Of Justice, Of Productivity. But These Three Virtues Cannot Be Separated. Each Flows Out Of The Other.

More And More People Are Becoming Aware That Government Has Nothing To Give Them Without First Taking It Away From Somebody Else-or From Themselves. Increased Handouts To Selected Groups Mean Merely Increased Taxes, Or Increased Deficits And Increased Inflation.

The State, Of Course, Is Absolutely Indispensable To The Preservation Of Law And Order, And The Promotion Of Peace And Social Cooperation. What Is Unnecessary And Evil, What Abridges The Liberty And Threatens The True Welfare Of The Individual, Is The State That Has Usurped Excessive Powers And Grown Beyond Its Legitimate Function - The Super-state, The Socialist State, The Redistributive State, In Brief, The Ironically Misnamed 'welfare State.'

It Is Possible To Increase Paper-money Income To Any Amount By Debasing The Currency. But Real Income Can Only Be Increased By Working Harder Or More Efficiently, Saving More, Investing More, And Producing More.

A Hundred Welfare Programs, Spending More And More Billions, Lead To Chronic Budget Deficits, Which Lead To Increased Paper-money Issues, Which Lead To Higher Prices.

Welfare Programs

We Cannot Distribute More Wealth Than Is Created. We Cannot In The Long Run Pay Labor As A Whole More Than It Produces.

The First Requisite Of A Sound Monetary System Is That It Put The Least Possible Power Over The Quantity Or Quality Of Money In The Hands Of The Politicians.

For Every Alleged Benefit That The Politicians Confer Upon Us, They Must Necessarily Deprive Us Of Something Else.

There Is A Strange Idea Aboard, Held By All Monetary Cranks, That Credit Is Something A Banker Gives To A Man. Credit, On The Contrary, Is Something A Man Already Has. He Has It, Perhaps, Because He Already Has Marketable Assets Of A Greater Cash Value Than The Loan For Which He Is Asking. Or He Has It Because His Character And Past Record Have Earned It. He Brings It Into The Bank With Him. That Is Why The Banker Makes Him The Loan.

The Larger The Percentage Of The National Income Taken By Taxes The Greater The Deterrent To Private Production And Employment. When The Total Tax Burden Grows Beyond A Bearable Size, The Problem Of Devising Taxes That Will Not Discourage And Disrupt Production Becomes Insoluble.

There Can Be Little Doubt That Many Egalitarians Are Motivated At Least Partly By Envy.

The Consequences Of Inflation Are Malinvestment, Waste, A Wanton Redistribution Of Wealth And Income, The Growth Of Speculation And Gambling, Immorality And Corruption, Disillusionment, Social Resentment, Discontent, Upheaval And Riots, Bankruptcy, Increased Government Controls, And Eventual Collapse.

Inflation Is A Form Of Tax, A Tax That We All Collectively Must Pay.

Government Provided Free Tuition Tends More And More To Produce A Uniform Conformist Education, With College Faculties Ultimately Dependent For Their Jobs On The Government, And So Developing An Economic Interest In Profession And Teaching A Statist, Pro-government, And Socialist Ideology.

The Capitalist System Has Lifted Mankind Out Of Mass Poverty. It Is This System That In The Last Century, In The Last Generation, Even In The Last Decade, Has Acceleratively Been Changing The Face Of The World, And Has Provided The Masses Of Mankind With Amenities That Even Kings Did Not Possess Or Imagine A Few Generations Ago.

From A Strictly Economic Point Of View, Buying Gold In A Major Inflation And Holding It Probably Presents The Least Risk Of Capital Loss Of Any Investment Or Speculation.

Government-to-government Aid Rests On Socialistic Assumptions And Promotes Socialism And Stagnation, Whereas Private Foreign Investment Rest On Capitalist Assumptions And Promotes Private Enterprise And Maximum Economic Growth.

Need Is Not Demand. Effective Economic Demand Requires Not Merely Need But Corresponding Purchasing Power.

The Solution To Our Problems Is Not More Paternalism, Laws, Decrees, And Controls, But The Restoration Of Liberty And Free Enterprise, The Restoration Of Incentives, To Let Loose The Tremendous Constructive Energies Of 300 Million Americans.

We Are So Accustomed To The Miracle Of Private Enterprise That We Habitually Take It For Granted. But How Does Private Industry Solve The Incredibly Complex Problem Of Turning Out Tens Of Thousands Of Different Goods And Services In The Proportions In Which They Are Wanted By The Public? ... It Solves These Problems Through The Institutions Of Private Property, Competition, The Free Market, And The Existence Of Money - Through The Interrelations Of Supply And Demand, Costs And Prices, Profits And Losses.

Some Champions Of Ever-greater Governmental Power And Spending Invent The Theory That The Taxpayers, Left To Themselves, Spend The Money They Have Earned Very Foolishly, On All Sorts Of Trivialities And Rubbish, And That Only The Bureaucrats, By First Seizing It From Them, Will Know How To Spend It Wisely.

The Envious Are More Likely To Be Mollified By Seeing Others Deprived Of Some Advantage Than By Gaining It For Themselves. It Is Not What They Lack That Chiefly Troubles Them, But What Others Have.

Bureaucrats Denounce Private Enterprise For The Consequences Of Their Own Reckless Policies And Demand Still More Governmental Controls.

A Certain Amount Of Taxes Is Of Course Indispensable To Carry On Essential Government Functions. Reasonable Taxes For This Purpose Need Not Hurt Production Much.

The Long-run Historical Tendency Of Capitalism Has Not Only Been To Increase Real Incomes More Or Less Proportionately Nearly All Along The Line, But To Benefit The Masses Even More Than The Rich.

No Matter Whether It Is Their Intention Or Not, Almost Anything That The Rich Can Legally Do Tends To Help The Poor. The Spending Of The Rich Gives Employment To The Poor. But The Saving Of The Rich, And Their Investment Of These Savings In The Means Of Production, Gives Just As Much Employment, And In Addition Makes That Employment Constantly More Productive And More Highly Paid, While It Also Constantly Increases And Cheapens The Production Of Necessities And Amenities For The Masses.

Inflation Makes The Extension Of Socialism Possible By Providing The Financial Chaos In Which It Flourishes. The Fact Is That Socialism And Inflation Are Cause And Effect, They Feed On Each Other!

Contrary To Age-old Prejudices, The Wealth Of The Rich Is Not The Cause Of The Poverty Of The Poor, But Helps To Alleviate That Poverty.

There May Have Been Somewhere, As A Few Eighteenth-century Philosophers Dreamed, A Group Of Peaceful Men Who Got Together One Evening After Work And Drew Up A Social Contract To Form The State. But Nobody Has Been Able To Find An Actual Record Of It. Practically All The Governments Whose Origins Are Historically Established Were The Result Of Conquest-of One Tribe By Another, One City By Another, One People By Another. Of Course There Have Been Constitutional Conventions, But They Merely Changed The Working Rules Of Governments Already In Being.

Precisely Because The State Has The Monopoly Of Coercion It Can Be Allowed The Monopoly Only Of Coercion. Only If The Modern State Can Be Held Within A Strictly Limited Agency Of Duties And Powers Can It Be Prevented From Regimenting, Conquering, And Ultimately Devouring The Society Which Gave It Birth.

In Practice [monetary Management] Is Merely A High-sounding Euphemism For Continuous Currency Debasement. It Consists Of Constant Lying In Order To Support Constant Swindling. Instead Of Automatic Currencies Based On Gold, People Are Forced To Take Managed Currencies Based On Guile. Instead Of Precious Metals They Hold Paper Promises Whose Value Falls With Every Bureaucratic Whim. And They Are Suavely Assured That Only Hopelessly Antiquated Minds Dream Of Returning To Truth And Honesty And Solvency And Gold.

It Is Often Sadly Remarked That The Bad Economists Present Their Errors To The Public Better Than The Good Economists Present Their Truths. It Is Often Complained That Demagogues Can Be More Plausible In Putting Forward Economic Nonsense From The Platform Than The Honest Men Who Try To Show What Is Wrong With It.

When People Who Earn More Than The Average Have Their 'surplus', Or The Greater Part Of It, Seized From Them In Taxes, And When People Who Earn Less Than Average Have The Deficiency , Or The Greater Part Of It, Turned Over To Them In Hand-outs And Doles, The Production Of All Must Sharply Decline; For The Energetic And Able Who Lose Their Incentive To Produce More Than The Average, And The Slothful And Unskilled Lose Their Incentive To Improve Their Condition.

There Are Men Regarded Today As Brilliant Economists, Who Deprecate Saving And Recommend Squandering On A National Scale As The Way Of Economic Salvation; And When Anyone Points To What The Consequences Of These Policies Will Be In The Long Run, They Reply Flippantly, As Might The Prodigal Son Of A Warning Father: 'in The Long Run We Are All Dead.' And Such Shallow Wisecracks Pass As Devastating Epigrams And The Ripest Wisdom.

The Vital Consideration Of Incentives Is Almost Systematically Overlooked In The Proposals Of Agitators For More And Bigger Government Welfare Schemes. We Should All Be Concerned About The Plight Of The Poor And Unfortunate. But The Hard Two-part Question That Any Plan For Relieving Poverty Must Answer Is: How Can We Mitigate The Penalties Of Failure And Misfortune Without Undermining The Incentives To Effort And Success.

Government Welfare

The Bad Economist Sees Only What Immediately Strikes The Eye; The Good Economist Also Looks Beyond. The Bad Economist Sees Only The Direct Consequences Of A Proposed Course; The Good Economist Looks Also At The Longer And Indirect Consequences. The Bad Economists Sees Only What The Effect Of A Given Policy Has Been Or Will Be On One Particular Group; The Good Economist Inquires Also What The Effect Of The Policy Will Be On All Groups

The Superior Freedom Of The Capitalist System, Its Superior Justice, And Its Superior Productivity Are Not Three Superiorities, But One. The Justice Follows From The Freedom And The Productivity Follows From The Freedom And The Justice.

There Are Millions Receiving Government Payments Who Have Come To Consider Them As An Earned Right, Who Of Course Find Them Inadequate, And Who Are Outraged At The Slightest Suggestion Of A Critical Re-examination Of The Subject. The Political Pressure For Constant Extension And Increase Of These Benefits Is Almost Irresistible.

Diluting The Money Supply With Paper Is The Moral Equivalent Of Diluting The Milk Supply With Water.

Government Relief Tends Constantly To Get Out Of Hand. And Even When It Is Kept Within Reasonable Bounds It Tends To Reduce The Incentives To Work And To Save Both Of Those Who Receive It And Of Those Who Are Forced To Pay It. It May Be Said, In Fact, That Practically Every Measure That Governments Take With The Ostensible Object Of 'helping The Poor' Has The Long-run Effect Of Doing The Opposite.

The Monetary Managers Are Fond Of Telling Us That They Have Substituted 'responsible Money Management' For The Gold Standard. But There Is No Historic Record Of Responsible Paper Money Management ... The Record Taken, As A Whole Is One Of Hyperinflation, Devaluation And Monetary Chaos.

The Essential Function Of The State Is To Maintain Peace, Justice, Law, And Order, And To Protect The Individual Citizen Against Aggression, Violence, Theft, And Fraud.

A Man Who Is Good From Docility, And Not From Stern Self-control, Has No Character.

Once The Idea Is Accepted That Money Is Something Whose Supply Is Determined Simply By The Printing Press, It Becomes Impossible For The Politicians In Power To Resist The Constant Demands For Further Inflation.

Today Is Already The Tomorrow Which The Bad Economist Yesterday Urged Us To Ignore.

The Only Way Government Bureaucrats Know Of Keeping Prosperity Going Is To Inflate Some More - To Increase The Deficit Or To Pump More Money Into The System.

Government Can't Give Us Anything Without Depriving Us Of Something Else.

The Way To Get A Maximum Rate Of 'economic Growth' Assuming This To Be Our Aim - Is To Give Maximum Encouragement To Production, Employment, Saving, And Investment. And The Way To Do This Is To Maintain A Free Market And A Sound Currency.

All Subsidy Measures, All Schemes To Redistribute Income Or To Force Peter To Support Paul, Are One-eyed As Well As Shortsighted. They Get Their Immediate Appeal By Focusing Attention On The Alleged Needs Of Some Particular Group Of Intended Beneficiaries. But The Inevitable Victims - Those Who Are Going To Be Asked To Pay For The New Handout In Increased Taxes (which Directly Or Indirectly Means Almost Everybody Else) - Are Left Out Of Account. Only One-half Of The Problem Has Been Seen. The Cost Of The Proposed Solution Has Been Overlooked.

Government-to-government Foreign Aid Promotes Statism, Centralized Planning, Socialism, Dependence, Pauperization, Inefficiency, And Waste. It Prolongs The Poverty It Is Designed To Cure. Voluntary Private Investment In Private Enterprise, On The Other Hand, Promotes Capitalism, Production, Independence, And Self-reliance.

Modern Capitalism Benefited The Masses In A Double Way - Both By Greatly Increasing The Wages Of The Masses Of Workers And Greatly Reducing The Real Prices They Had To Pay For What Was Produced.

The Real Solution To The Problem Of Poverty Consists In Finding How To Increase The Employment And Earning Power Of The Poor.

A Day Never Passes Without Some Ardent Reformer Or Group Of Reformers Suggesting Some New Government Intervention, Some New Statist Scheme To Fill Some Alleged 'need' Or Relieve Some Alleged Distress.

The Only Way We Could Remember Would Be By Constant Re-reading, For Knowledge Unused Tends To Drop Out Of Mind. Knowledge Used Does Not Need To Be Remembered; Practice Forms Habits And Habits Make Memory Unnecessary. The Rule Is Nothing; The Application Is Everything.

The More 'adequate' We Make Relief, The More People We Are Going To Find Willing To Get On It And Stay On It Indefinitely. The More We Try To Make Sure That Everybody Really In Need Of Relief Gets It, The More Certain We Can Be That We Are Also Giving It To People Who Neither Need Nor Deserve It.

The Whole Gospel Of Karl Marx Can Be Summed Up In A Single Sentence: Hate The Man Who Is Better Off Than You Are. Never Under Any Circumstances Admit That His Success May Be Due To His Own Efforts, To The Productive Contribution He Has Made To The Whole Community. Always Attribute His Success To The Exploitation, The Cheating, The More Or Less Open Robbery Of Others. Never Under Any Circumstances Admit That Your Own Failure May Be Owing To Your Own Weakness, Or That The Failure Of Anyone Else May Be Due To His Own Defects - His Laziness, Incompetence, Improvidence, Or Stupidity.

The First (lesson) Which We Meet Again And Again In History, Is That Once The Dole Or Similar Relief Programs Are Introduced, They Seem Almost Inevitably - Unless Surrounded By The Most Rigid Restrictions - To Get Out Of Hand. The Second Lesson Is That Once This Happens The Poor Become More Numerous And Worse Off Than They Were Before, Not Only Because They Have Lost Self-reliance, But Because The Sources Of Wealth And Production On Which They Depend For Either Doles Or Jobs Are Diminished Or Destroyed.

The Art Of Economics Consists In Looking Not Merely At The Immediate But At The Longer Effects Of Any Act Or Policy; It Consists In Tracing The Consequences Of That Policy Not Merely For One Group But For All Groups.

The Way To Maximize Production Is To Maximize The Incentives To Production. And The Way To Do That, As The Modern World Has Discovered, Is Through The System Known As Capitalism - The System Of Private Property, Free Markets, And Free Enterprise.

The Envious Are Not Satisfied With Equality; They Secretly Yearn For Superiority And Revenge. In The French Revolution Of 1848, A Woman Coal-heaver Is Said To Have Remarked To A Richly Dressed Lady: 'yes, Madam, Everything's Going To Be Equal Now; I Shall Go In Silks And You'll Carry Coal.'

When Your Money Is Taken By A Thief, You Get Nothing In Return. When Your Money Is Taken Through Taxes To Support Needless Bureaucrats, Precisely The Same Situation Exists. We Are Lucky, Indeed, If The Needless Bureaucrats Are Mere Easy-going Loafers. They Are More Likely Today To Be Energetic Reformers Busily Discouraging And Disrupting Production.

If Precious Metals Had Been Abundant, They Would Not Have Been Precious.

One Of The Worst Features Of All The Plans For Sharing Wealth And Equalizing Or Guaranteeing Incomes Is That They Lose Sight Of The Conditions And Institution S That Are Necessary To Create Wealth And Income In The First Place.

Everything We Get, Outside Of The Free Gifts Of Nature, Must In Some Way Be Paid For. The World Is Full Of So- Called Economists Who In Turn Are Full Of Schemes For Getting Something For Nothing. They Tell Us That The Government Can Spend And Spend Without Taxing At All; That It Can Continue To Pile Up Debt Without Ever Paying It Off, Because "we Owe It To Ourselves."

All Loans, In The Eyes Of Honest Borrowers, Must Eventually Be Repaid. All Credit Is Debt. Proposals For An Increased Volume Of Credit, Therefore, Are Merely Another Name For Proposals For An Increased Burden Of Debt. They Would Seem Considerably Less Inviting If They Were Habitually Referred To By The Second Name Instead Of By The First.

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