The Law

I recently finished an amazing 75 page booklet entitled, "The Law" by Fredrick Bastiat. I remember reading this as a youth and I even had a few comments  underlined. This time however, I almost couldn't stop underlining. Everything in it seemed to be relevant to today's world--even though it had originally been written in 1850. I want to write some of the notes that I took in the hope that it will shed light on some of the fallacies regarding the proper role of government and legislation. I take no credit for these ideas. Most of what I write here comes directly or indirectly from this book. These are just my notes which I have gathered to help me formulate and understand the ideas contained in the book.

Our law has been perverted. It has been converted from an instrument of "justice for all" to an instrument of "legalized plunder."

Our lives, liberty and property (natural resources) are gifts from God. These gifts preceded laws. Consequently, they are not created by the laws. In fact, because these things already existed, we sought to establish laws in defense of these gifts. The common force (laws) should only do what an individual has a natural right to do: that is protect persons, liberties, and property, and maintain the right of each. If the law acts in any way which uses force to destroy the rights of others, the law is in direct opposition to its own purpose. Justice has been destroyed.

The law has been perverted by two causes: Greed and False Philanthropy. The common tendency of mankind is to live and prosper at the expense of others. Men will plunder whenever plunder is easier than work. It stops whenever plunder becomes more painful and more dangerous than labor. The purpose of law is to stop plunder. The law should protect property and punish plunder. If however, the law is used as a means of plunder itself, the law is used to destroy independence and is only a benefit of the person who makes the law. The rest of the people either wish to stop lawful plunder or they wish to share in it. (If you can't beat 'em, join 'em.) Bastiat says, in effect, "the conversion of law into an instrument of plunder is one of the greatest evils to a free society."

How do you know if a law is just or if it is simply legalized plunder?

Ask yourself, "Does the law take from some persons what belongs to them and give it to other person to whom it does not belong?"If law is used against liberty it is also used against justice, thereby acting against its purposes.

The second way the law has been perverted is by false philanthropy. The idea of providing general welfare by general plunder is ludicrous. The law cannot organize labor, education, or religion without destroying justice. The law should only be defensive--only stopping one from harming others--it never violates his personal liberty.

Nothing can enter the public treasury for the benefit of one citizen or class unless other citizens or classes have been forced to send it in. Forced organization is the problem, not natural organization. We are all able and even encouraged to organize and give of our surplus willingly. There is a fundamental difference between forced organization vs natural organizing, forced fraternity vs true fraternity and artificial unity vs the natural unity of mankind under providence. Many people, especially socialists, confuse the distinction between government and society thereby every time we object to a thing being done by government, the they conclude that we object to it being done at all. How did they ever get the idea that the law could be made to produce what it does not contain?

Liberty is the freedom of EVERY person to make full use of his faculties (granted to him by God), so long as he does not harm other persons while doing so. If the law were restricted to protecting ALL persons, liberty and all property then EVERONE'S interest in the law would be the same. If our nation were founded on that basis it would be the most just, economical, limited government imaginable. Everyone would know privileges, but also the responsibilities.

Whatever Happened to Penny Candy?

Are you baffled by economics and frustrated with attempting to understand the tax code and the ramifications of certain decisions which the United States Congress has recently undertaken? How is a "normal, every-day citizen" supposed to follow and understand everything that is going on? We are trying to grasp the concepts of the stock-market and figure out why the world's markets seem to be going completely berserk. We question the decisions of congress but don't understand how exactly they should be fixed. The chaos is getting so intense that we really just want to bury our head in the sand and pretend like it doesn't actually affect us and our families. We want to pretend that there is nothing that we can do and we want to busy ourselves with so many little busy-work projects that we say to ourselves, "I don't have time for that. Someone else will have to fight that fight."

Well, I'm a firm believer that "truth" is not complicated. A true principle will stand the test of time. A true principle will guide you to good things no matter how complicated the world becomes. 

There is a great, little book written by Richard Maybury called, "Whatever Happened to Penny Candy?" that has helped me get a firmer grip on some economic principles that have extreme relevance to our nations current financial decisions. Designed to be an introduction to economic principles for jr. high to high school students I have found it very easy to read and understand. Let me give you a few of the high points that I have been reminded of. 

Governments generate ZERO revenue. They do however spend revenue. Where do they get the money to pay for all of the programs that they generate? They only have three options. They tax, borrow or inflate. We are all pretty familiar with the tax and I'll save borrowing/debt for another time so let's move on to the third option. Candidates are elected to office by telling people that they will give you all of the things you want and he will make someone else pay for it. That is a big lie, however, for we all know deep down that, "there ain't no such thing as a free lunch." He tells people this in order to get elected, then when he gets elected and the bill comes due he doesn't want to tax them or else they'll get mad and won't re-elect him. So instead, he decides to "inflate" the money supply.

Inflation is simply a principle of supply and demand. (When the supply of something goes up, the price per unit of that thing goes down.) Vice versa, if there is very little money, the money is very valuable and it will buy a great deal. Inflation is an increase in the money supply-not the value--but the supply, the actual number of dollars printed by the government. Inflating (increasing) the supply of money causes the value of each dollar to go down. When the value goes down you need more of it to buy what you want--prices rise. As we speak, all over the world, government officials are creating so much money that the money is losing its value. Prices are rising almost everywhere. Extra money has been created so that the government officials can use it to pay for what they buy. Both democracies and dictators inflate. Dictators inflate because they fear revolutions while in republics or democracies they inflate to cover the constant promises of the politicians so that they don't have to increase taxes.

Whenever the government tries to "check" inflation by establishing wage/price controls the people stop working. Companies shut down. More jobs are lost. Why would someone continue making a product when the value they get for their work is less than the cost to make it? Shortages develop.

Inflation causes business people to make mistakes. The influx of new money causes them to get really excited. They spend too much, and grow too fast in order to meet the new demands of the spending spree. When the inflation stops, the business people see their mistakes and start making corrections. They must fire workers and unemployment goes up. Now if the inflation starts up again, the correction stops and the workers go back to work. A recession has happened. If the inflation does not start up again, the corrections are completed. Unemployment stays up for a longer time because the workers cannot go back to their old jobs; they must find new ones. That's a depression. Inflation causes recessions and depressions. Just to be clear--the government causes inflation by printing more dollars which decreases the value of the dollars that you already have thereby causing prices to go up.

Think about our relative recent history. There was massive post WWI inflation in the 1920's. With all of those wonderfully new dollars people spent and spent. Then when the inflation was halted in 1929 you had the Great 1929 Stock Market Crash and the Great Depression. Look at even more recent history to find that it does indeed repeat itself. The 1982 recession was the worst since the Great Depression. To end it, officials inflated the money supply heavily between 1983 and 1986. Some of this new money went into the stock market causing it to rise. This encouraged other investors causing a huge boom in the market. When the inflation was slowed again in 1987, the supply of new money dried up and we got one of the worst crashes in history and eventually a recession.

According to the author you should take a look at the history of money sometime. Whenever you find a good, reliable, non inflated money, you almost always find a strong, healthy civilization. Whenever you find unreliable, inflated money, you almost always find a civilization in decay.

There is so much more packed into this great little book. I highly recommend it to you and especially to help the younger generation start to understand the results of government manipulation of our money supply. What I've talked about here is just a drop in the bucket. I hope that it is at least a place to start. In the meantime, here are a few other things you can do to take action on this important topic:

Pay attention to the economic policies of the government and the federal reserve. Demand that your government stop inflating. Visit this link to research and urge your congressmen to support and co-sponser the Audit the Fed bill. Resist price controls and remember that the only way to stop inflation is to spread ethics---quit demanding more and more and more from a government whose only recourse is to take from someone else every single thing that it gives to you.