Economics

For all species, except our own, economics really boils down to day-to-day survival. Given the competition for scarce food, the harshness of the elements, the danger of predators, the vulnerability to disease, and the relative rarity of innovation, bare-bones survival (with some time left over for reproduction) is about all animals can attain. We would be in the same boat (as we were in the not-too-distant past) if not for two things: our big brains and our dexterous hands. Using the two together, we have been able to build tools and machines that magnify our ability to get more out of our environment.

— Peter Schiff; How an Economy Grows and Why It Crashes

Economist Thomas Woods likes to challenge his students with a simple thought experiment: What kind of economy would we have if all machines and tools disappeared? Cars, tractors, iron smelters, shovels, wheelbarrows, saws, hammers, spears, everything. What if they all went <em>poof</em> and all that we consumed had to be hunted, gathered, grown, and made, WITH OUR BARE HANDS?

Without question, life would be rough. Imagine how hard it would be to eat if we had to bring down game with our teeth, fists, and fingernails. Large game would be out of the question. Rabbits would be within our power to subdue... but you would have to catch them first. What if vegetables had to be planted and picked by hand, and what if we didn't even have sacks in which to carry the harvest? Imagine if we had to make clothes and furniture without factories... without even scissors or nails?

Despite our intelligence, we would be no better off, economically at least, than chimps and orangutans.

Tools change everything and create the possibility of an economy. Spears help us bring down game, shovels help us plant crops, and nets help us catch fist. These devices magnify the efficacy of our labor. The more we can make, the more we can consume, and the more prosperous our lives become.

— Peter Schiff; How an Economy Grows and Why It Crashes

The simplest definition of <em>economics</em> is the effort to maximize the availability of limited resources (and just about every resource is limited) to meet as many human demands as possible. Tools, capital, and innovation are the keys to this equation.

Keeping this in mind, it is easy to see what makes economies grow: finding better ways of producing more stuff that humans want. This doesn't change... no matter how big an economy eventually gets.

— Peter Schiff; How an Economy Grows and Why It Crashes

Just as the principles of mathematics don't change with the size of the problem, basic economic principles do not change with the size of the economy. They're just harder to see because of the many layers that exist between savers and borrowers. Buy the direct relationship among self-sacrifice, savings, credit, investment, economic incentive, and social and economic progress are always the same.

— Peter Schiff; How an Economy Grows and Why It Crashes

When a government project experiences cost overruns or poor service, free market discipline does not come to the rescue. The government simply raises taxes to fill the gap. In so doing, it wastes societal resources, and living standards drop.

— Peter Schiff; How an Economy Grows and Why It Crashes

As production expanded, businesses profited, prices steadily fell, and purchasing power rose.

— Peter Schiff; How an Economy Grows and Why It Crashes

Economics was long ago called "the dismal science," and for a very good reason. It poured cold water on all sorts of wonderful-sounding ideas.

— Thomas Sowell; Dismantling America

Economics and politics deal with the same fundamental problem: What everyone wants always adds up to more than there is. Economics can give no solution to that problem, and can at best offer various ways that trade-offs may be made, in order to try to optimize the inherently limited possibilities. But politics offers solutions every day - however illusory, counterproductive or even disastrous those solutions may turn out to be. In the short run, which is when elections are held, politicians are a lot more popular than economists.

— Thomas Sowell; Dismantling America

Most of the graduates of even our most prestigious universities leave these illustrious campuses utterly ignorant of economics. Even distinguished professors in other fields are often not only ignorant, but misinformed, about the most basic principles of economics. Harvard's eminent historian, Professor Arthur M. Schlesinger, Jr., admitted that he had no real interest in economics, though that did not stop him from concluding that President Franklin D. Roosevelt's administration saved the American economy during the Great Depression of the 1930s.

— Thomas Sowell; Dismantling America

Coca-Cola, for example, uses considerably less aluminum in its cans than it did several decades ago. Coca-Cola did this not because it became more environmentally sensitive but because it wanted to increase its profits.

— Thomas DiLorenzo; How Capitalism Saved America

Taxation, price controls, regulation in general, and government control of production with government-run enterprises all shrink the private sector as well. When the government causes inflation it makes it difficult for capitalists to make economic calculations. After all, the entrepreneur must assess whether his investment in resources is producing a product or service that consumers value more than the resources themselves—that is, whether his revenues exceed his costs. And inflation complicates this critical calculation, which harms capitalism.

— Thomas DiLorenzo; How Capitalism Saved America

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

— Murray Rothbard

All human action, so far as it is rational, appears as the exchange of one condition for another. Men apply economic goods and personal time and labour in the direction which, under the given circumstances, promises the highest degree of satisfaction, and they forgo the satisfaction of lesser needs so as to satisfy the more urgent needs. This is the essence of economic activity—the carrying out of acts of exchange.

— Ludwig von Mises