M. Prohibant (it was not I who gave him this name, but M. Charles Dupin) devoted his time and capital to converting the ore found on his land into iron. As nature had been more lavish towards the Belgians, they furnished the French with iron cheaper than M. Prohibant; which means, that all the French, or France, could obtain a given quantity of iron with less labour by buying it of the honest Flemings. Therefore, guided by their own interest, they did not fail to do so; and every day there might be seen a multitude of nail-smiths, blacksmiths, cartwrights, machinists, farriers, and labourers, going themselves, or sending intermediates, to supply themselves in Belgium. This displeased M. Prohibant exceedingly.
At first, it occurred to him to put an end to this abuse by his own efforts: it was the least he could do, for he was the only sufferer. “I will take my carbine,” said he; “I will put four pistols into my belt; I will fill my cartridge box; I will gird on my sword, and go thus equipped to the frontier. There, the first blacksmith, nail-smith, farrier, machinist, or locksmith, who presents himself to do his own business and not mine, I will kill, to teach him how to live.” At the moment of starting, M. Prohibant made a few reflections which calmed down his warlike ardour a little. He said to himself, “In the first place, it is not absolutely impossible that the purchasers of iron, my countrymen and enemies, should take the thing ill, and, instead of letting me kill them, should kill me instead; and then, even were I to call out all my servants, we should not be able to defend the passages. In short, this proceeding would cost me very dear, much more so than the result would be worth.”
M. Prohibant was on the point of resigning himself to his sad fate, that of being only as free as the rest of the world, when a ray of light darted across his brain. He recollected that at Paris there is a great manufactory of laws. “What is a law?” said he to himself. “It is a measure to which, when once it is decreed, be it good or bad, everybody is bound to conform. For the execution of the same a public force is organised, and to constitute the said public force, men and money are drawn from the whole nation. If, then, I could only get the great Parisian manufactory to pass a little law, ‘Belgian iron is prohibited,’ I should obtain the following results:–The Government would replace the few valets that I was going to send to the frontier by 20,000 of the sons of those refractory blacksmiths, farriers, artizans, machinists, locksmiths, nail-smiths, and labourers. Then to keep these 20,000 custom-house officers in health and good humour, it would distribute among them 25,000,000 of francs taken from these blacksmiths, nail-smiths, artizans, and labourers. They would guard the frontier much better; would cost me nothing; I should not be exposed to the brutality of the brokers; should sell the iron at my own price, and have the sweet satisfaction of seeing our great people shamefully mystified. That would teach them to proclaim themselves perpetually the harbingers and promoters of progress in Europe. Oh! it would be a capital joke, and deserves to be tried.”
So M. Prohibant went to the law manufactory. Another time, perhaps, I shall relate the story of his underhand dealings, but now I shall merely mention his visible proceedings. He brought the following consideration before the view of the legislating gentlemen.
“Belgian iron is sold in France at ten francs, which obliges me to sell mine at the same price. I should like to sell at fifteen, but cannot do so on account of this Belgian iron, which I wish was at the bottom of the Red Sea. I beg you will make a law that no more Belgian iron shall enter France. Immediately I raise my price five francs, and these are the consequences:–
“For every hundred-weight of iron that I shall deliver to the public, I shall receive fifteen francs instead of ten; I shall grow rich more rapidly, extend my traffic, and employ more workmen. My workmen and I shall spend much more freely, to the great advantage of our tradesmen for miles around. These latter, having more custom, will furnish more employment to trade, and activity on both sides will increase in the country. This fortunate piece of money, which you will drop into my strong-box, will, like a stone thrown into a lake, give birth to an infinite number of concentric circles.”
Charmed with his discourse, delighted to learn that it is so easy to promote, by legislating, the prosperity of a people, the law-makers voted the restriction. “Talk of labour and economy,” they said, “what is the use of these painful means of increasing the national wealth, when all that is wanted for this object is a decree?” (from here)
Was the law that M. Prohibant had passed to protect the profitability of his mines a bad law? Bastiat goes on to explain that it was. So if M. Prohibant’s idea strikes you as fine and excellent, please click on the link and read about the consequences of M. Prohibant’s law.
What is the lesson here? We like to blame others, but we have a republic. By themselves robber barons cannot gain the passage of restrictive trade legislation. By themselves they don’t have enough votes.
Consider. Was M. Prohibant the only gainer from the law he proposed? Like M. Prohibant we each tend to think the laws we benefit from are good. It is the law that other people use to restrict us that we dislike. It is that self-interest that our leaders use to pit us against each other. It is that self interest that allows robber barons to buy our leaders. Instead of electing honorable men and women who refuse to be bought, we elect people who give us what we want.
What we need to do is consider the laws we want from the point of view of others. If what we want is intended only to help “me”, then we are not being neighborly. We are just being selfish.
12 This is My commandment, that you love one another as I have loved you.13 Greater love has no one than this, than to lay down one’s life for his friends.14 You are My friends if you do whatever I command you.
How do we love one another as Jesus loved? We can debate that, but is it not safe to say we should not use the law to gain privileges from each other that we do not deserve?
OF A POST TO COME promised to compare the governing approaches of Donald Trump and Hillary Clinton with respect to two issues.
The growth of the power of government.
The protection of our rights.
The Growth Of The Power Of Government
Why is it a problem when government is powerful? Government exists to protect our rights. Yet the power we give our government makes government itself a threat to our rights. Therefore, we must choose between giving the government just enough power and giving it too much.
To give our government the resources it needs to defend our rights, we must give our leaders the authority to tax us and spend our money. Nevertheless, the more we allow our government to tax and spend, the more we work for government instead of ourselves. At some point, we risk slavery.
Some decisions which effect a people must be made jointly. Thus, government must sometimes make decisions we would otherwise make for ourselves. So it is that in a nation of free men and women, we have laws that restrict us from harming each other (traffic laws, for example). In a nation of slaves, however, the laws just list a few trivial decisions that the leaders permit the people to make for themselves.
Here is a table that summarizes where the candidates stand. Not certain the information is correct? Then check their web sites. I have only provided links where their positions are not available on their own websites.
Long ago Moses visited Pharaoh and told him God’s command: Let my people go! The Pharaoh disobeyed. So through Moses God brought ten plagues upon Egypt. Even though Pharaoh’s magicians, Jannes and Jambres, could not undo what God had done, they “duplicated” the first plagues God brought upon Egypt, and for some strange reason, Pharaoh took comfort in that.
What is magic, that thing magicians do? More often than not “magic” is just sleight of hand. The magician just fools us into believing he is doing something he is not actually doing. Sometimes, however, even the magician does not know what he doing.
That thing we call the economy is one of the most mysterious things in the world. That is, even though we depend upon it for our food, clothing, and shelter, none of us know exactly how it works. Therefore, when what is going on in the economy concerns us, we consult “experts,” economic magicians, to find out what we should do.
Economic magicians? Does that seem excessively derisive? Then consider these two stories.
Will negative interest rates come to the United States? Probably. Sadly, what economists recommend these days often does not make much sense. Our economy is becoming too contrived, like a house of cards. The problem? Well, let’s begin that discussion by considering a magic trick we call fiat money.
What is ‘Fiat Money’
Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “it shall be”. (from here (www.investopedia.com))
Because it is not backed by anything, fiat money has no intrinsic or innate value. That is not to say financial analysts do not have formulas to calculate the intrinsic value of fiat money. Nevertheless, fiat money has no utility of its own.
The value that we get from goods and services is innately apparent from the simple, most basic acts of living. We need food to survive, so food has value. The value for tradeable goods and services is predicated on utility and relative scarcity.
For financial assets, and money is the world’s first financial derivative, there is no direct utility. It does not satisfy any basic demand of survival or continued existence. Therefore, any value attached to financial products does not come from utility. It comes from faith. (from here)
Value itself is nothing more than the outward expression of individual faith. The traditional value of money is really just an outgrowth of its historical reputation, earned through so many actions and consequences. Money may seem to add a level of objectivity into the discussion of value, but that is only because of a more universal “faith” in the transactional price discovery process it allows. (from here)
So why do we believe our money has value? There is actually a little more to it than merely believing fiat money is “real” money. Remember that our government uses its power to define fiat money as legal tender, that is, the government says we can legally use fiat money to pay off our creditors. That includes the government itself. Don’t we pay our biggest bill, our taxes, with fiat money?
Thus, using its power, the government prints money and creates a demand for it. So it is that even though fiat money has no actual value of its own, the value of fiat money still follows the law of supply and demand.
Supply equates to scarcity. How much labor or how many goods and services are required to obtain a certain amount of money?
The demand for fiat money depends upon the bills we must pay. What is the amount of money we need to pay off our creditors?
Therefore, to make its fiat money serve as an appropriate means of exchange, our government must regulate both the supply of and the demand for its fiat money. That’s what we will talk about in the next post.
Note: that I don’t claim to have a huge amount of economic expertise. I am sharing my observations in the hope of promoting a discussion. Hence corrections and comments are welcome. If you want your comments to include what you think of the economic proposals of the presidential candidates, that is okay with me.
The most effective way to bring about change in society, therefore, may start at a grassroots level, from the bottom up. After all, politicians sometimes change their voting patterns, so the conservative senator or representative you voted for in 2012 may decide that the liberal party provides a better membership package or simply change their personal views on the issue. I’m not saying it’s pointless to vote; however, I’m arguing that participating in the political process is not the ultimate expression of the Christian faith. (from here)
I suggest clicking here and reading all of ‘s comment. What has to say is quite excellent and true. Nevertheless, I think overlooks the fact that as Christians we must participate in the political life of our country. We must do so because we love our neighbors.
16 Then the eleven disciples went away into Galilee, to the mountain which Jesus had appointed for them. 17 When they saw Him, they worshiped Him; but some doubted.
18 And Jesus came and spoke to them, saying, “All authority has been given to Me in heaven and on earth.19 Go therefore and make disciples of all the nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit,20 teaching them to observe all things that I have commanded you; and lo, I am with you always, even to the end of the age.” Amen
If we want to spread the Gospel to our family (especially our children), our friends, and our neighbors, then we must continually fight for the right to do so.
Imagine living in a Muslim nation. Did you know that at one time most of the people living in the Middle East were Christians? During the latter days of the Roman Empire, untold numbers of men and women had died to spread the Christian faith. Unfortunately, Muslim “warriors” rose out of Saudi Arabia’s dessert wastes. Preaching the “peace” of Islam, with brute force these “warriors”conquered formerly Christian lands. These “warriors” forced the inhabitants to adopt Islam. They murdered the idol worshipers who refused Islam, and they tormented Christians and Jews with special taxes and other forms of abuse. Thus, Muslim bullies did what the most powerful Roman Emperors had been unable to do. They hit upon a way of methodically extirpating the Christian faith from their conquests.
As Christians, because we believe the Bible is true, we must defend the right of our family, friends, and neighbors to choose what they believe. That is a political act, one that requires us to involve ourselves in politics. Our opponents? These are people who attempt to impose their own beliefs by force. Given the opportunity, they will deny their family, friends, and neighbors the right to choose Christ.
Rights and Due Process
What is the difference between a tyrannical government and a government that serves the People? A government that serves the People protect the rights of the citizenry. Before the government can deprive any citizen of their rights, a free People requires their government to follow specific procedures. Otherwise, there no use in saying that any citizen has any rights. Without the requirement to follow specific procedures, government officials can ignore the rights of the citizenry and arbitrarily do as they wish.
What are rights? This dictionary definition of rights is not very helpful. Either we get dragged into the definition of a right (which has many definitions), or we get dragged into an ambiguous definition of civil rights. The trouble, however, is not with the definition. The trouble is with our propensity to abuse language. Because we have a pronounced tendency to call anything we want a right and a large sense of entitlement, anything and everything has become a right.
So what are our rights? Here I think it is worthwhile to consider the etymology of the word right (see here and here). What the references suggest is that we derive our “rights” from the impropriety of denying someone the ability to exercise their own capacity to do what they should do. If someone wants to do what is in accordance with what is good, proper, or just; what sense does it make to stop them? The last thing morally upright people want is a government that prevents them from doing what they should do. Yet don’t tyrants have their own ideas? If a good man speaks out against villainy in high places, won’t those in power attempt to silence him? When ordinary people try to fulfill their obligations to feed, cloth, shelter, and educate their children, won’t the greedier of our elites connive to separate those parents from wealth that would otherwise be used more appropriately? Therefore, our rights originate from a desire of the People, the desire to do the right thing.
This is a point that mastersamwise has striven to make in many of his comments (see here, here, here, and here, for examples). Our primary interest in protecting each others rights lies in our desire to enable each other to do what is good, not what is evil. Unfortunately, government is not especially good at distinguishing between good and evil. Therefore, instead of just protecting the individual’s right to do good, we protect the individual’s rights to life, liberty, and the pursuit of happiness. That is, we each use the law to protect each of our family, friends, and neighbors from each of our other our family, friends, and neighbors.
“Due process” refers to the legal procedures we use to protect our rights to life, liberty, and the pursuit of happiness. That is, we require government officials to follow specific procedures and accord each citizen the due of process of law. Consider this excerpt from Legal Information Institute.
The Constitution states only one command twice. The Fifth Amendment says to the federal government that no one shall be “deprived of life, liberty or property without due process of law.” The Fourteenth Amendment, ratified in 1868, uses the same eleven words, called the Due Process Clause, to describe a legal obligation of all states. (from here)
What is in the Fifth Amendment?
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. (from here)
Who makes certain that government officials follow specific procedures and accord each citizen the due of process of law. You, me, and every other citizen. Protecting each other one of the ways we show our love for each other.
34 A new commandment I give to you, that you love one another; as I have loved you, that you also love one another.35 By this all will know that you are My disciples, if you have love for one another.”
The Free Market
Some people have a disdain for filthy lucre. They portray the desire for wealth as selfish. However, there is nothing selfish about voting to ensure the prosperity of our family, friends and neighbors. When governments abuse their powers or refuse to maintain proper order, people suffer. Sometimes they don’t get enough to eat.
In addition, what we buy and sell reflects our ethical beliefs. We may not wish to buy from or sell to companies who produce products made with slave labor, for example. Hence, we we want an economic system that gives us the freedom to choose.
Theoretically, our current economic system (which still contains vestiges of Capitalism) follows the law supply and demand. Generally, when our government does not interfere in the economy, the market sets the price for goods and services. When that happens shortages are generally brief. Because it pays well, people produce what is in high demand. On the other hand, if something is not selling well, people don’t waste time and resources trying to produce it.
When government interferes in the market by favoring some goods and services over others, unfortunate economic distortions can occur (For examples from the Great Recession, see the links at the following comments: here, here, and here.). Consider some examples of what is happening now.
Our government spends far too much money. Because we let our politicians buy our votes, our taxes are too high, and our government borrows money to pay for programs we could do without. Instead of deciding for ourselves how to spend the money we earn, we let our leaders take our money from us and spend it for us.
Our government artificially jacks up stock prices by increasing the money supply. That means stocks are overpriced. Eventually, that bubble will burst.
Because of government interference in the housing market, we periodically experience housing bubbles and risk the catastrophic failure of lending and other financial institutions.
Our leaders interfere in our college level educational institutions by giving schools money and “cheap” college loans to student. Thus, we waste billions encouraging our children to acquire degrees they can’t use and debt they have trouble paying off.
Federal, state and local governments finance a monopolistic public education system. That system, increasingly incompetent and expensive, responds poorly to parental desires. Instead, the educrats running it increasingly demand complete control over the education of children. Yet because we have multiple levels of government running the system, we have trouble determining who is responsible for the mess.
Our leaders have a Constitutional responsibility to control our borders and decide who is allowed to immigrate into our country. Instead, for the sake of cheap labor and voters they can buy off, they have reneged on their responsibility. Instead, they confer costly educational and welfare benefits upon people who don’t even have the right to be here.
Instead of responding user demand, politicians arbitrarily determine how, when, and where our transportation infrastructure should be financed and built. Their politically driven decisions force many of us to spend hours each day in stop and go traffic.
Foreign governments routinely practice a modern version of an economic model known as Mercantilism. These countries prey upon U.S. industries, using their economic clout to pressure U.S. companies to locate within their borders and give up trade secrets. Unfortunately, our politicians refuse to do anything to protect long range U.S. interests. Instead, they negotiate trade deals that are too complex for the public to understand.
One of the commenters to THE SIGNIFICANCE OF YOUR VOTE — PART 2, Necessary and Proper, provided an excerpt (here) from Free to Choose by Milton and Rose Friedman (1980). This excerpt argues against protectionism in international trade. Friedman makes the point that free enterprise both allows us to make our own choices and make the best use of the resources available. He argues that when foreign governments assist their companies and undercut U.S. manufacturers, they do so at a severe costs to their own citizens. Essentially, they give U.S. consumers a gift. Therefore, Friedman advocated for totally free markets.
We could say to the rest of the world: We believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all. Our market is open to you without tariffs or other restrictions. Sell here what you can and wish to. Buy whatever you can and wish to. In that way cooperation among individuals can be world-wide and free. (from here)
There may be a slight problem with Friedman’s reasoning. If U.S. investors know that the government of foreign competitors (China, for example) will drive U.S. companies out of a certain market sector, U.S. investors will not invest in that sector. Hence, foreign competitors will be able to sell their goods here at a premium prices. Moreover, if the goods over which a foreign government wants a monopoly has defense applications, that foreign government will have also succeeded in weakening U.S. defense preparedness. Therefore, in addition to keeping our own government from unnecessarily interfering with our economy, we must also defend our markets from the shenanigans of foreign governments.
Nevertheless, in a free market we each get to choose our vocation, where and how we live, what we buy and sell, and our charitable practices. In a free market we each have the fullest opportunity to follow the example of our Lord.