“Those who would sacrifice liberty for security deserve neither liberty nor security.”
A famous quote used against Alberto Gonzales during a recent speech about the importance of warrant free wiretapping. While sitting in traffic today thinking about those words another phrase, often used by the left to justify non-free markets, popped into my head. Financial security. So I moved some variables around in my head and came up with:
“Those who would sacrifice economic freedom for financial security deserve neither economic freedom nor financial security.”
It is the logic of freedom as most people see it applied to economics. It is contradictory to believe that government should be able to regulate, tax, and inflate at will but not wire tap because they are two sides of the same coin. We lose freedom when governments interfere with free markets or tax and we lose freedom when governments listen to our phone calls without a warrant. The left aren’t alone in their inconsistent beliefs. Many conservatives dispute Darwinian evolution and believe democracy can be imposed from above (through war) when the Austrian School of Economics (the foundation of the Reagan/Thatcher revolution) praises the logic of evolution as applied to markets and argues that social order can only emerge without excessive government interference.
I remember in high school we had a financial counsellor explain to us the power of compounding applied to wealth. He went on and on about how we were all going to be millionaires when we got older. After the speech he asked if anybody had any questions. I was the only one to raise my hand and said something like “Cars used to cost $1000 right?” He agreed. Then I asked “So isn’t it possible that cars in fifty years will cost a million dollars and our life savings will buy a Hyundai?” To which he replied “It’s possible”. Needless to say I wasn’t a big saver until recently.
IRAs and home equity are not included in the calculation of the US savings rate. So as the government prints more money it decreases the value of our savings. The fact that Bush has cut taxes while increasing spending is a testament to the utility of inflation from the government’s perspective.
On an entirely different note, Rothbard has some interesting thoughts about the inability of older minds to accept new ideas because their ideas tend to rely on some fundamental assumptions that they then use as the foundation for their life’s work. I was thinking about this same topic recently, that people build these frameworks early on which are flawed yet build complex and often logically sound arguments on top of the flawed base. Here’s a condensed example using math.
-2 x -3 = +6 is true
2 x 3 = +6 is true
Flawed conclusion: Any numbers, when multiplied, give a positive result.
New theory: (6+6)/2 = 6
The theory is logically sound and lauded by the academic world as brilliant and it is mathematically correct. But one day the scientist, a social scientist in our case, proposes a new theory.
2nd theory: Government Surplus = (-2 x 6) -6 = 6
3rd theory: The government should spend 6.
These theories are also praised by critics as even more impressive than the first so newspaper Op-Ed sections begin to cover them, the so called second hand dealers in ideas jump on board and argue the merits of the logic behind subtraction and order of operations.But the math is wrong, the answer to the second equation is Government Surplus = -18. This is exactly what happens in the first few pages of Das Kapital with Marx’s flawed concepts of Equality of Value and Equal Quantity of Labor. Flawed ideas in the first three pages followed by four volumes of flawed conclusions.