Chaos, order and the danger of delusion feasibility

Chaos, order and the danger of delusion feasibility

GERHARD SCHWARZ

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A free order never produced only positive results. The market economy is an ongoing search process with many twists and turns.

Of the dangers to which the liberal order is exposed to the pursuit of economic equality is probably the oldest. The socialist dream leads inevitably to totalitarianism. This has been shown thinkers like Karl Popper and Ralf Dahrendorf, but also the grand failed experiments in Eastern Europe, China or Cuba. Yet many liberals fail to recognize the threat to freedom posed by the quest for equality, because they confuse equality with fairness. Not less dangerous is the conservative commitment to safety. In a free society, there can be no absolute security, nor a complete social security, namely a completely safe society is necessarily a police state. Nevertheless, liberals accept crises, most recently after 9 / 11, because of "security" all possible interference with the freedom. But freedom is not only threatened by such obvious dangers, but also on ways of thinking, which at first glance less clearly recognizable as inimical to freedom. To them, faith is increasingly on the feasibility of all things.

On silent feet

Against this delusion must be careful not least because he attacked the liberal order on silent feet. The apostles of feasibility are namely not as anti-liberal, and they know just do not want diversity, non-centralism and a high degree of freedom of all - something like 'chaos' works - a prerequisite for this is that complex systems such as economies remain stable and that they can simultaneously develop sufficient flexibility to come up with the unpredictable nature of the world to the edge. How the market economy. You can expect them therefore neither accurate nor predict, and if you engage in it, under limits wage top and some with unrealistic conversion rates, or with, you never know exactly what you inflicts - except that it reduced degrees of freedom, decentralization degrades and adaptability at risk .

Feasibility is also the dangerous belief because it is widespread and on the civil side. While the liberal concept focuses on the design of processes and regulations and accepts that stagnate in the interplay of supply and demand, wages, rising fuel prices and shrinking industries - or otherwise - wants to achieve more concrete traditional policy goals. That it shakes the foundations of a free society is not aware of most politicians. They are supported by managers and entrepreneurs, the feasibility is downright program. That may be at the level of the company with a clear hierarchy and goal orientation have his permission.However, one could also just be there in recent years, less arrogant belief that you want to understand everything and could have a grip. And if the feasibility faith at the micro level, in the financial industry, has been refuted painful, this would certainly apply at the macro level.

Grotesque way he has but by the financial and economic crisis intensified rather. This can this crisis without intellectual bending largely understood as a consequence of increased feasibility faith: bankers, who felt as "Master of the Universe" and all - for business or private - for sale held; politicians who believed they could be in any economic reality the home ownership for all induced force, even for those who lack work, income and assets; monetary authorities that are in a position mentioned, recessions to prevent permanent or at least to even largely, regulators, who hoped, when compared with sufficient strict supervision competencies endows made to eliminate abuse and criminal misconduct, and economists, who emulated a scientific ideal and thought they could understand and explain their model-based knowledge and the world. All this has not materialized.

Courage to be humble

Instead of responding with "more of the same," it would need to recognize that in the complex system of "economy" little centrally feasible, manageable and controllable. Can cause such chaos according to the theory of the "butterfly effect" natural disasters, even the smallest action can the economy to lift off its hinges, the decision of an individual entrepreneur, as well as any state intervention deliberately set. This must not lead to agnosticism or fatalism. It warns, however, to the utmost restraint in the economic, social and environmental policy, and it provides besides the two arguments of securing freedom and of increasing the prosperity of an additional epistemological foundation for liberal policy: Because the system is so complex because it in its parts and even more so in its entirety is transparent so little, because its future development can best describe as coarse model predictions are, however well intentioned selective interventions in their effects and side effects too unpredictable, as that they could represent a clear conscience. The "chaos" bears hardly targeted interventions.

Other hand, are "chaos" and order do not conflict. The complexity of the economy fits in very well with a policy framework, as long as this leaves room for self-organization, for contingencies and unforeseen. If however we want to meet the "chaos" with individual measures, if we overcome it and instead use only dominate, we enter a vicious circle of interventionism and of the making. We harm the functioning of the market economy, without getting their inevitable volatility, the cyclical and structural dips and breaks, unemployment, price volatility, speculation and a lot more to even come close to the handle. When we stop, however, to overestimate our ability to design economic policy, we are indeed all these "chaotic developments' experience too, but they are less likely to be dammed and therefore less concentrated and discharged. If we develop more courage for economic policy humility, we will recognize that the "chaos" does - even in the economy - and that we are afraid of its open-endedness less need than before to what the conscious and unconscious interventionists this world in its constructivist hubris design.

This article was published in the Neue Zürcher Zeitung as a farewell article by the author. The Liberal Institute thanks you for allowing us to continue publishing.

Economics in One Lesson by Henry Hazlitt

Credit Diverts Production

We remarked at the beginning of this chapter that government “aid” to business is sometimes as much to be feared as government hostility. This applies as much to government subsidies as to government loans. The government never lends or gives anything to business that it does not take away from business. One often hears New Dealers and other statists boast about the way government “bailed business out” with the Reconstruction Finance Corporation, the Home Owners Loan Corporation and other government agencies in 1932 and later. But the government can give no financial help to business that it does not first or finally take from business. The government’s funds all come from taxes. Even the much vaunted “government credit” rests on the assumption that its loans will ultimately be repaid out of the proceeds of taxes. 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. Under certain emergency circumstances there may be a plausible argument for this, the merits of which we need not examine here. But in the long run it does not sound like a paying proposition from the standpoint of the country as a whole. And experience has shown that it isn’t.

Economics in One Lesson by Henry Hazlitt

Credit Diverts Production

The case becomes even clearer if we turn from farming to other forms of business. 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 taxpayers’ money that no one is willing to take with his own.

Such a policy would lead to evils of many different kinds. It would lead to favoritism: to the making of loans to friends, or in return for bribes. It would inevitably lead to scandals. It would lead to recriminations whenever the taxpayers’ money was thrown away on enterprises that failed. It would increase the demand for socialism: for, it would properly be asked, if the government is going to bear the risks, why should it not also get the profits? What justification could there possibly be, in fact, for asking the taxpayers to take the risks while permitting private capitalists to keep the profits? (This is precisely, however, as we shall later see, what we already do in the case of “nonrecourse” government loans to farmers.)

But we shall pass over all these evils for the moment, and concentrate on just one consequence of loans of this type. This is that they will waste capital and reduce production. They will throw the available capital into bad or at best dubious projects. They will throw it into the hands of persons who are less competent or less trustworthy than those who would otherwise have got it. For the amount of real capital at any moment (as distinguished from monetary tokens run off on a printing press) is limited. What is put into the hands of B cannot be put into the hands of A.

People want to invest their own capital. But they are cautious. They want to get it back. Most lenders, therefore, investigate any proposal carefully before they risk their own money in it. They weigh the prospect of profits against the chances of loss. They may sometimes make mistakes. But for several reasons they are likely to make fewer mistakes than government lenders. In the first place, the money is either their own or has been voluntarily entrusted to them. In the case of government-lending the money is that of other people, and it has been taken from them, regardless of their personal wish, in taxes. The private money will be invested only where repayment with interest or profit is definitely expected. This is a sign that the persons to whom the money has been lent will be expected to produce things for the market that people actually want. The government money, on the other hand, is likely to be lent for some vague general purpose like “creating employment”; and the more inefficient the work—that is, the greater the volume of employment it requires in relation to the value of the product— the more highly thought of the investment is likely to be.

The private lenders, moreover, are selected by a cruel market test. If they make bad mistakes they lose their money and have no more money to lend. It is only if they have been successful in the past that they have more money to lend in the future. Thus private lenders (except the relatively small proportion that have got their funds through inheritance) are rigidly selected by a process of survival of the fittest. The government lenders, on the other hand, are either those who have passed civil service examinations, and know how to answer hypothetical questions hypothetically, or they are those who can give the most plausible reasons for making loans and the most plausible explanations of why it wasn’t their fault that the loans failed. But the net result remains: private loans will utilize existing resources and capital far better than government loans. Government loans will waste far more capital and resources than private loans. Government loans, in short, as compared with private loans, will reduce production, not increase it.

The proposal for government loans to private individuals or projects, in brief sees B and forgets A. It sees the people into whose hands the capital is put; it forgets those who would otherwise have had it. It sees the project to which capital is granted; it forgets the projects from which capital is thereby withheld. It sees the immediate benefit to one group; it overlooks the losses to other groups, and the net loss to the community as a whole.

The case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages. The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified B at the expense of some unidentified A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief in the long run they do not increase overall national production but encourage malinvestment.

Economics in One Lesson

Economics in One Lesson by Henry Hazlitt

Credit Diverts Production

At first glance the case for this type of loan may seem a strong one. Here is a poor family, it will be said, with no means of livelihood. It is cruel and wasteful to put them on relief. Buy a farm for them; set them up in business; make productive and self-respecting citizens of them; let them add to the total national product and pay the loan off out of what they produce. Or here is a farmer struggling along with primitive methods of production because he has not the capital to buy himself a tractor. Lend him the money for one; let him increase productivity; he can repay the loan out of the proceeds of his increased crops. In that way you not only enrich him and put him on his feet; you enrich the whole community by that much added output. And the loan, concludes the argument, costs the government and the taxpayers less than nothing, because it is “self-liquidating.”
Now as a matter of fact that is what happens every day under the institution of private credit. If a man wishes to buy a farm, and has, let us say, only half or a third as much money as the farm costs, a neighbor or a savings bank will lend him the rest in the form of a mortgage on the farm. If he wishes to buy a tractor, the tractor company itself or a finance company, will allow him to buy it for one-third of the purchase price with the rest to be paid off in installments out of earnings that the tractor itself will help to provide.
But there is a decisive difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds. (A banker, it is true, risks the funds of others that have been entrusted to him; but if money is lost he must either make good out of his own funds or be forced out of business.) When people risk their own funds they are usually careful in their investigations to determine the adequacy of the assets pledged and the business acumen and honesty of the borrower.
If the government operated by the same strict standards, there would be no good argument for its entering the field at all. Why do precisely what private agencies already do? But the government almost invariably operates by different standards. The whole argument for its entering the lending business, in fact, is that it will make loans to people who could not get them from private lenders. This is only another way of saying that the government lenders will take risks with other people’s money (the taxpayers’) that private lenders will not take with their own money. Sometimes, in fact, apologists will freely acknowledge that the percentage of losses will be higher on these government loans than on private loans. But they contend that this will be more than offset by the added production brought into existence by the borrowers who pay back, and even by most of the borrowers who do not pay back.
This argument will seem plausible only as long as we concentrate our attention on the particular borrowers whom the government supplies with funds, and overlook the people whom its plan deprives of funds. For what is really being lent is not money, which is merely the medium of exchange, but capital. (I have already put the reader on notice that we shall postpone to a later point the complications introduced by an inflationary expansion of credit.) What is really being lent, say, is the farm or the tractor itself. Now the number of farms in existence is limited, and so is the production of tractors (assuming, especially, that an economic surplus of tractors is not produced simply at the expense of other things). The farm or tractor that is lent to A cannot be lent to B. The real question is, therefore, whether A or B shall get the farm.
This brings us to the respective merits ofA and B, and what each contributes, or is capable of contributing, to production. A, let us say, is the man who would get the farm if the government did not intervene. The local banker or his neighbors know him and know his record. They want to find employment for their funds. They know that he is a good farmer and an honest man who keeps his word. They consider him a good risk. He has already, perhaps, through industry, frugality and foresight, accumulated enough cash to pay a fourth of the price of the farm. They lend him the other three-fourths; and he gets the farm.
There is a strange idea abroad, 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 banker is not giving something for nothing. He feels assured of repayment. He is merely exchanging a more liquid form of asset or credit for a less liquid form. Sometimes he makes a mistake, and then it is not only the banker who suffers, but the whole community; for values which were supposed to be produced by the lender are not produced and resources are wasted.
Now it is to A, let us say, who has credit that the banker would make his loan. But the government goes into the lending business in a charitable frame of mind because, as we say, it is worried about
B. B cannot get a mortgage or other loans from private lenders because he does not have credit with them. He has no savings; he has no impressive record as a good farmer; he is perhaps at the moment on relief. Why not, say the advocates of government credit, make him a useful and productive member of society by lending him enough for a farm and a mule or tractor and setting him up in business?
Perhaps in an individual case it may work out all right. But it is obvious that in general the people selected by these government standards will be poorer risks than the people selected by private standards. More money will be lost by loans to them. There will be a much higher percentage of failures among them. They will be less efficient. More resources will be wasted by them. Yet the recipients of government credit will get their farms and tractors at the expense of those who otherwise would have been the recipients of private credit. Because B has a farm, A will be deprived of a farm. A may be squeezed out either because interest rates have gone up as a result of the government operations, or because farm prices have been forced up as a result of them, or because there is no other farm to be had in his neighborhood. In any case, the net result of government credit has not been to increase the amount of wealth produced by the community but to reduce it, because the available real capital (consisting of actual farms, tractors, etc.) has been placed in the hands of the less efficient borrowers rather than in the hands of the more efficient and trustworthy.

Economics in One Lesson

Family and education

Family and education

ROBERT NEF

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LI-PAPER. Diversity and creative dissent are important foundations of entrepreneurship, which meet regularly in state systems of units short.

Which company is successful, less likely a question of genius, the total risk-taking entrepreneurs and valor on his side as a matter of instinct and the constellation of gaps and niches of all kinds

In a service economy that empathy plays in the social needs of people - and economically - a crucial role. Diversity produces diversity and complexity creates immunity. One has the time and sometimes the other more successful. The greater the number of small experiments, the more creative and more resistant, the entire system. Who interprets freedom as a normal state and not as a creative intermediate phase between two tyrannies, should not be supported in a brilliant world leader types, but the real creativity in the normality of an existing order.

The question of which individuals are in what combinations in certain situations demand economically, politically and socially just should not be hastily answered. The key innovation is neither planned nor predictable, and they will once again invented by a genius, and of a very ordinary person, or discovered.

Download LI-paper (5 pages, PDF)

http://www.libinst.ch/?i=familienunternehmen-und-bildung 

Thomas Paine Common Sense. 1776.

Thoughts on the present state of American affairs.

IN the following pages I offer nothing more than simple facts, plain arguments, and common sense; and have no other preliminaries to settle with the reader, than that he will divest himself of prejudice and prepossession, and suffer his reason and his feelings to determine for themselves; that he will put on, or rather that he will not put off, the true character of a man, and generously enlarge his views beyond the present day.	1
Volumes have been written on the subject of the struggle between England and America. Men of all ranks have embarked in the controversy, from different motives, and with various designs; but all have been ineffectual, and the period of debate is closed. Arms, as the last resource, decide the contest; the appeal was the choice of the king, and the continent hath accepted the challenge.	2
It hath been reported of the late Mr Pelham (who tho' an able minister was not without his faults) that on his being attacked in the house of commons, on the score, that his measures were only of a temporary kind, replied, "they will last my time." Should a thought so fatal and unmanly possess the colonies in the present contest, the name of ancestors will be remembered by future generations with detestation.	3
The sun never shined on a cause of greater worth. 'Tis not the affair of a city, a country, a province, or a kingdom, but of a continent—of at least one eighth part of the habitable globe. 'Tis not the concern of a day, a year, or an age; posterity are virtually involved in the contest, and will be more or less affected, even to the end of time, by the proceedings now. Now is the seed time of continental union, faith and honor. The least fracture now will be like a name engraved with the point of a pin on the tender rind of a young oak; The wound will enlarge with the tree, and posterity read it in full grown characters.	4
By referring the matter from argument to arms, a new æra for politics is struck; a new method of thinking hath arisen. All plans, proposals, &c. prior to the nineteenth of April, i. e. to the commencement of hostilities, are like the almanacks of the last year; which, though proper then, are superceded and useless now. Whatever was advanced by the advocates on either side of the question then, terminated in one and the same point, viz. a union with Great-Britain; the only difference between the parties was the method of effecting it; the one proposing force, the other friendship; but it hath so far happened that the first hath failed, and the second hath withdrawn her influence.	5
As much hath been said of the advantages of reconciliation, which, like an agreeable dream, hath passed away and left us as we were, it is but right, that we should examine the contrary side of the argument, and inquire into some of the many material injuries which these colonies sustain, and always will sustain, by being connected with, and dependant on Great-Britain. To examine that connexion and dependance, on the principles of nature and common sense, to see what we have to trust to, if separated, and what we are to expect, if dependant.	6
I have heard it asserted by some, that as America hath flourished under her former connexion with Great-Britain, that the same connexion is necessary towards her future happiness, and will always have the same effect. Nothing can be more fallacious than this kind of argument. We may as well assert that because a child has thrived upon milk, that it is never to have meat, or that the first twenty years of our lives is to become a precedent for the next twenty. But even this is admitting more than is true, for I answer roundly, that America would have flourished as much, and probably much more, had no European power had any thing to do with her. The commerce, by which she hath enriched herself are the necessaries of life, and will always have a market while eating is the custom of Europe.	7
But she has protected us, say some. That she hath engrossed us is true, and defended the continent at our expence as well as her own is admitted, and she would have defended Turkey from the same motive, viz. the sake of trade and dominion.	8
Alas, we have been long led away by ancient prejudices, and made large sacrifices to superstition. We have boasted the protection of Great-Britain, without considering, that her motive was interest not attachment; that she did not protect us from our enemies on our account, but from her enemies on her own account, from those who had no quarrel with us on any other account, and who will always be our enemies on the same account. Let Britain wave her pretensions to the continent, or the continent throw off the dependance, and we should be at peace with France and Spain were they at war with Britain. The miseries of Hanover last war ought to warn us against connexions.	9
It hath lately been asserted in parliament, that the colonies have no relation to each other but through the parent country, i. e. that Pennsylvania and the Jerseys, and so on for the rest, are sister colonies by the way of England; this is certainly a very round-about way of proving relationship, but it is the nearest and only true way of proving enemyship, if I may so call it. France and Spain never were, nor perhaps ever will be our enemies as Americans, but as our being the subjects of Great-Britain.	10
But Britain is the parent country, say some. Then the more shame upon her conduct. Even brutes do not devour their young, nor savages make war upon their families; wherefore the assertion, if true, turns to her reproach; but it happens not to be true, or only partly so, and the phrase parent or mother country hath been jesuitically adopted by the king and his parasites, with a low papistical design of gaining an unfair bias on the credulous weakness of our minds. Europe, and not England, is the parent country of America. This new world hath been the asylum for the persecuted lovers of civil and religious liberty from every part of Europe. Hither have they fled, not from the tender embraces of the mother, but from the cruelty of the monster; and it is so far true of England, that the same tyranny which drove the first emigrants from home, pursues their descendants still.	11
In this extensive quarter of the globe, we forget the narrow limits of three hundred and sixty miles (the extent of England) and carry our friendship on a larger scale; we claim brotherhood with every European christian, and triumph in the generosity of the sentiment.	12
It is pleasant to observe by what regular gradations we surmount the force of local prejudice, as we enlarge our acquaintance with the world. A man born in any town in England divided into parishes, will naturally associate most with his fellow parishioners (because their interests in many cases will be common) and distinguish him by the name of neighbour; if he meet him but a few miles from home, he drops the narrow idea of a street, and salutes him by the name of townsman; if he travel out of the county, and meet him in any other, he forgets the minor divisions of street and town, and calls him countryman; i. e. county-man; but if in their foreign excursions they should associate in France or any other part of Europe, their local remembrance would be enlarged into that of Englishmen. And by a just parity of reasoning, all Europeans meeting in America, or any other quarter of the globe, are countrymen; for England, Holland, Germany, or Sweden, when compared with the whole, stand in the same places on the larger scale, which the divisions of street, town, and county do on the smaller ones; distinctions too limited for continental minds. Not one third of the inhabitants, even of this province, are of English descent. Wherefore I reprobate the phrase of parent or mother country applied to England only, as being false, selfish, narrow and ungenerous.	13
But admitting, that we were all of English descent, what does it amount to? Nothing. Britain, being now an open enemy, extinguishes every other name and title: And to say that reconciliation is our duty, is truly farcical. The first king of England, of the present line (William the Conqueror) was a Frenchman, and half the Peers of England are descendants from the same country; wherefore, by the same method of reasoning, England ought to be governed by France.	14
Much hath been said of the united strength of Britain and the colonies, that in conjunction they might bid defiance to the world. But this is mere presumption; the fate of war is uncertain, neither do the expressions mean any thing; for this continent would never suffer itself to be drained of inhabitants, to support the British arms in either Asia, Africa, or Europe.	15
Besides, what have we to do with setting the world at defiance? Our plan is commerce, and that, well attended to, will secure us the peace and friendship of all Europe; because, it is the interest of all Europe to have America a free port. Her trade will always be a protection, and her barrenness of gold and silver secure her from invaders.	16
I challenge the warmest advocate for reconciliation, to shew, a single advantage that this continent can reap, by being connected with Great Britain. I repeat the challenge, not a single advantage is derived. Our corn will fetch its price in any market in Europe, and our imported goods must be paid for buy them where we will.	17
But the injuries and disadvantages we sustain by that connection, are without number; and our duty to mankind at large, as well as to ourselves, instruct us to renounce the alliance: Because, any submission to, or dependance on Great-Britain, tends directly to involve this continent in European wars and quarrels; and sets us at variance with nations, who would otherwise seek our friendship, and against whom, we have neither anger nor complaint. As Europe is our market for trade, we ought to form no partial connection with any part of it. It is the true interest of America to steer clear of European contentions, which she never can do, while by her dependance on Britain, she is made the make-weight in the scale on British politics.	18
Europe is too thickly planted with kingdoms to be long at peace, and whenever a war breaks out between England and any foreign power, the trade of America goes to ruin, because of her connection with Britain. The next war may not turn out like the last, and should it not, the advocates for reconciliation now will be wishing for separation then, because, neutrality in that case, would be a safer convoy than a man of war. Every thing that is right or natural pleads for separation. The blood of the slain, the weeping voice of nature cries, 'TIS TIME TO PART. Even the distance at which the Almighty hath placed England and America, is a strong and natural proof, that the authority of the one, over the other, was never the design of Heaven. The time likewise at which the continent was discovered, adds weight to the argument, and the manner in which it was peopled encreases the force of it. The reformation was preceded by the discovery of America, as if the Almighty graciously meant to open a sanctuary to the persecuted in future years, when home should afford neither friendship nor safety.	19
The authority of Great-Britain over this continent, is a form of government, which sooner or later must have an end: And a serious mind can draw no true pleasure by looking forward, under the painful and positive conviction, that what he calls "the present constitution" is merely temporary. As parents, we can have no joy, knowing that this government is not sufficiently lasting to ensure any thing which we may bequeath to posterity: And by a plain method of argument, as we are running the next generation into debt, we ought to do the work of it, otherwise we use them meanly and pitifully. In order to discover the line of our duty rightly, we should take our children in our hand, and fix our station a few years farther into life; that eminence will present a prospect, which a few present fears and prejudices conceal from our sight.	20
Though I would carefully avoid giving unnecessary offence, yet I am inclined to believe, that all those who espouse the doctrine of reconciliation, may be included within the following descriptions. Interested men, who are not to be trusted; weak men, who cannot see; prejudiced men, who will not see; and a certain set of moderate men, who think better of the European world than it deserves; and this last class, by an ill-judged deliberation, will be the cause of more calamities to this continent, than all the other three.	21
It is the good fortune of many to live distant from the scene of sorrow; the evil is not sufficiently brought to their doors to make them feel the precariousness with which all American property is possessed. But let our imaginations transport us for a few moments to Boston, that seat of wretchedness will teach us wisdom, and instruct us for ever to renounce a power in whom we can have no trust. The inhabitants of that unfortunate city, who but a few months ago were in ease and affluence, have now, no other alternative than to stay and starve, or turn out to beg. Endangered by the fire of their friends if they continue within the city, and plundered by the soldiery if they leave it. In their present condition they are prisoners without the hope of redemption, and in a general attack for their relief, they would be exposed to the fury of both armies.	22
Men of passive tempers look somewhat lightly over the offences of Britain, and, still hoping for the best, are apt to call out, "Come, come, we shall be friends again, for all this." But examine the passions and feelings of mankind, Bring the doctrine of reconciliation to the touchstone of nature, and then tell me, whether you can hereafter love, honour, and faithfully serve the power that hath carried fire and sword into your land? If you cannot do all these, then are you only deceiving yourselves, and by your delay bringing ruin upon posterity. Your future connection with Britain, whom you can neither love nor honour, will be forced and unnatural, and being formed only on the plan of present convenience, will in a little time fall into a relapse more wretched than the first. But if you say, you can still pass the violations over, then I ask, Hath your house been burnt? Hath your property been destroyed before your face? Are your wife and children destitute of a bed to lie on, or bread to live on? Have you lost a parent or a child by their hands, and yourself the ruined and wretched survivor? If you have not, then are you not a judge of those who have. But if you have, and still can shake hands with the murderers, then you are unworthy of the name of husband, father, friend, or lover, and whatever may be your rank or title in life, you have the heart of a coward, and the spirit of a sycophant.	23
This is not inflaming or exaggerating matters, but trying them by those feelings and affections which nature justifies, and without which, we should be incapable of discharging the social duties of life, or enjoying the felicities of it. I mean not to exhibit horror for the purpose of provoking revenge, but to awaken us from fatal and unmanly slumbers, that we may pursue determinately some fixed object. It is not in the power of Britain or of Europe to conquer America, if she do not conquer herself by delay and timidity. The present winter is worth an age if rightly employed, but if lost or neglected, the whole continent will partake of the misfortune; and there is no punishment which that man will not deserve, be he who, or what, or where he will, that may be the means of sacrificing a season so precious and useful.	24
It is repugnant to reason, to the universal order of things to all examples from former ages, to suppose, that this continent can longer remain subject to any external power. The most sanguine in Britain does not think so. The utmost stretch of human wisdom cannot, at this time, compass a plan short of separation, which can promise the continent even a year's security. Reconciliation is now a falacious dream. Nature hath deserted the connexion, and Art cannot supply her place. For, as Milton wisely expresses, "never can true reconcilement grow where wounds of deadly hate have pierced so deep."	25
Every quiet method for peace hath been ineffectual. Our prayers have been rejected with disdain; and only tended to convince us, that nothing flatters vanity, or confirms obstinacy in Kings more than repeated petitioning—and noting hath contributed more than that very measure to make the Kings of Europe absolute: Witness Denmark and Sweden. Wherefore, since nothing but blows will do, for God's sake, let us come to a final separation, and not leave the next generation to be cutting throats, under the violated unmeaning names of parent and child.	26
To say, they will never attempt it again is idle and visionary, we thought so at the repeal of the stamp act, yet a year or two undeceived us; as well may we suppose that nations, which have been once defeated, will never renew the quarrel.	27
As to government matters, it is not in the power of Britain to do this continent justice: The business of it will soon be too weighty, and intricate, to be managed with any tolerable degree of convenience, by a power, so distant from us, and so very ignorant of us; for if they cannot conquer us, they cannot govern us. To be always running three or four thousand miles with a tale or a petition, waiting four or five months for an answer, which when obtained requires five or six more to explain it in, will in a few years be looked upon as folly and childishness—There was a time when it was proper, and there is a proper time for it to cease.	28
Small islands not capable of protecting themselves, are the proper objects for kingdoms to take under their care; but there is something very absurd, in supposing a continent to be perpetually governed by an island. In no instance hath nature made the satellite larger than its primary planet, and as England and America, with respect to each other, reverses the common order of nature, it is evident they belong to different systems: England to Europe, America to itself.	29
I am not induced by motives of pride, party, or resentment to espouse the doctrine of separation and independance; I am clearly, positively, and conscientiously persuaded that it is the true interest of this continent to be so; that every thing short of that is mere patchwork, that it can afford no lasting felicity,—that it is leaving the sword to our children, and shrinking back at a time, when, a little more, a little farther, would have rendered this continent the glory of the earth.	30
As Britain hath not manifested the least inclination towards a compromise, we may be assured that no terms can be obtained worthy the acceptance of the continent, or any ways equal to the expense of blood and treasure we have been already put to.	31
The object, contended for, ought always to bear some just proportion to the expense. The removal of North, or the whole detestable junto, is a matter unworthy the millions we have expended. A temporary stoppage of trade, was an inconvenience, which would have sufficiently ballanced the repeal of all the acts complained of, had such repeals been obtained; but if the whole continent must take up arms, if every man must be a soldier, it is scarcely worth our while to fight against a contemptible ministry only. Dearly, dearly, do we pay for the repeal of the acts, if that is all we fight for; for in a just estimation, it is as great a folly to pay a Bunker-hill price for law, as for land. As I have always considered the independancy of this continent, as an event, which sooner or later must arrive, so from the late rapid progress of the continent to maturity, the event could not be far off. Wherefore, on the breaking out of hostilities, it was not worth the while to have disputed a matter, which time would have finally redressed, unless we meant to be in earnest; otherwise, it is like wasting an estate on a suit at law, to regulate the trespasses of a tenant, whose lease is just expiring. No man was a warmer wisher for reconciliation than myself, before the fatal nineteenth of April 1775, 1 but the moment the event of that day was made known, I rejected the hardened, sullen tempered Pharaoh of England for ever; and disdain the wretch, that with the pretended title of FATHER OF HIS PEOPLE, can unfeelingly hear of their slaughter, and composedly sleep with their blood upon his soul.	32
But admitting that matters were now made up, what would be the event? I answer, the ruin of the continent. And that for several reasons.	33
First. The powers of governing still remaining in the hands of the king, he will have a negative over the whole legislation of this continent. And as he hath shewn himself such an inveterate enemy to liberty, and discovered such a thirst for arbitrary power; is he, or is he not, a proper man to say to these colonies, "You shall make no laws but what I please." And is there any inhabitant in America so ignorant, as not to know, that according to what is called the present constitution, that this continent can make no laws but what the king gives it leave to; and is there any man so unwise, as not to see, that (considering what has happened) he will suffer no law to be made here, but such as suit his purpose. We may be as effectually enslaved by the want of laws in America, as by submitting to laws made for us in England. After matters are made up (as it is called) can there be any doubt, but the whole power of the crown will be exerted, to keep this continent as low and humble as possible? Instead of going forward we shall go backward, or be perpetually quarrelling or ridiculously petitioning.—We are already greater than the king wishes us to be, and will he not hereafter endeavour to make us less? To bring the matter to one point. Is the power who is jealous of our prosperity, a proper power to govern us? Whoever says No to this question is an independant, for independancy means no more, than, whether we shall make our own laws, or, whether the king, the greatest enemy this continent hath, or can have, shall tell us, "there shall be no laws but such as I like."	34
But the king you will say has a negative in England; the people there can make no laws without his consent. In point of right and good order, there is something very ridiculous, that a youth of twenty-one (which hath often happened) shall say to several millions of people, older and wiser than himself, I forbid this or that act of yours to be law. But in this place I decline this sort of reply, though I will never cease to expose the absurdity of it, and only answer, that England being the King's residence, and America not so, make quite another case. The king's negative here is ten times more dangerous and fatal than it can be in England, for there he will scarcely refuse his consent to a bill for putting England into as strong a state of defence as possible, and in America he would never suffer such a bill to be passed.	35
America is only a secondary object in the system of British politics, England consults the good of this country, no farther than it answers her own purpose. Wherefore, her own interest leads her to suppress the growth of ours in every case which doth not promote her advantage, or in the least interferes with it. A pretty state we should soon be in under such a second-hand government, considering what has happened! Men do not change from enemies to friends by the alteration of a name: And in order to shew that reconciliation now is a dangerous doctrine, I affirm, that it would be policy in the king at this time, to repeal the acts for the sake of reinstating himself in the government of the provinces; in order that HE MAY ACCOMPLISH BY CRAFT AND SUBTILITY, IN THE LONG RUN, WHAT HE CANNOT DO BY FORCE AND VIOLENCE IN THE SHORT ONE. Reconciliation and ruin are nearly related.	36
Secondly. That as even the best terms, which we can expect to obtain, can amount to no more than a temporary expedient, or a kind of government by guardianship, which can last no longer than till the colonies come of age, so the general face and state of things, in the interim, will be unsettled and unpromising. Emigrants of property will not choose to come to a country whose form of government hangs but by a thread, and who is every day tottering on the brink of commotion and disturbance; and numbers of the present inhabitants would lay hold of the interval, to dispose of their effects, and quit the continent.	37
But the most powerful of all arguments, is, that nothing but independance, i. e. a continental form of government, can keep the peace of the continent and preserve it inviolate from civil wars. I dread the event of a reconciliation with Britain now, as it is more than probable, that it will followed by a revolt somewhere or other, the consequences of which may be far more fatal than all the malice of Britain.	38
Thousands are already ruined by British barbarity; (thousands more will probably suffer the same fate.) Those men have other feelings than us who have nothing suffered. All they now possess is liberty, what they before enjoyed is sacrificed to its service, and having nothing more to lose, they disdain submission. Besides, the general temper of the colonies, towards a British government, will be like that of a youth, who is nearly out of his time; they will care very little about her. And a government which cannot preserve the peace, is no government at all, and in that case we pay our money for nothing; and pray what is it that Britain can do, whose power will be wholly on paper, should a civil tumult break out the very day after reconciliation? I have heard some men say, many of whom I believe spoke without thinking, that they dreaded an independance, fearing that it would produce civil wars. It is but seldom that our first thoughts are truly correct, and that is the case here; for there are ten times more to dread from a patched up connexion than from independance. I make the sufferers case my own, and I protest, that were I driven from house and home, my property destroyed, and my circumstances ruined, that as a man, sensible of injuries, I could never relish the doctrine of reconciliation, or consider myself bound thereby.	39
The colonies have manifested such a spirit of good order and obedience to continental government, as is sufficient to make every reasonable person easy and happy on that head. No man can assign the least pretence for his fears, on any other grounds, that such as are truly childish and ridiculous, viz. that one colony will be striving for superiority over another.	40
Where there are no distinctions there can be no superiority, perfect equality affords no temptation. The republics of Europe are all (and we may say always) in peace. Holland and Swisserland are without wars, foreign or domestic: Monarchical governments, it is true, are never long at rest; the crown itself is a temptation to enterprizing ruffians at home; and that degree of pride and insolence ever attendant on regal authority, swells into a rupture with foreign powers, in instances, where a republican government, by being formed on more natural principles, would negotiate the mistake.	41
If there is any true cause of fear respecting independance, it is because no plan is yet laid down. Men do not see their way out—Wherefore, as an opening into that business, I offer the following hints; at the same time modestly affirming, that I have no other opinion of them myself, than that they may be the means of giving rise to something better. Could the straggling thoughts of individuals be collected, they would frequently form materials for wise and able men to improve into useful matter.	42
Let the assemblies be annual, with a President only. The representation more equal. Their business wholly domestic, and subject to the authority of a Continental Congress.	43
Let each colony be divided into six, eight, or ten, convenient districts, each district to send a proper number of delegates to Congress, so that each colony send at least thirty. The whole number in Congress will be least 390. Each Congress to sit    and to choose a president by the following method. When the delegates are met, let a colony be taken from the whole thirteen colonies by lot, after which, let the whole Congress choose (by ballot) a president from out of the delegates of that province. In the next Congress, let a colony be taken by lot from twelve only, omitting that colony from which the president was taken in the former Congress, and so proceeding on till the whole thirteen shall have had their proper rotation. And in order that nothing may pass into a law but what is satisfactorily just, not less than three fifths of the Congress to be called a majority.—He that will promote discord, under a government so equally formed as this, would have joined Lucifer in his revolt.	44
But as there is a peculiar delicacy, from whom, or in what manner, this business must first arise, and as it seems most agreeable and consistent that it should come from some intermediate body between the governed and the governors, that is, between the Congress and the people, let a CONTINENTAL CONFERENCE be held, in the following manner, and for the following purpose.	45
A committee of twenty-six members of Congress, viz. two for each colony. Two members for each House of Assembly, or Provincial Convention; and five representatives of the people at large, to be chosen in the capital city or town of each province, for, and in behalf of the whole province, by as many qualified voters as shall think proper to attend from all parts of the province for that purpose; or, if more convenient, the representatives may be chosen in two or three of the most populous parts thereof. In this conference, thus assembled, will be united, the two grand principles of business, knowledge and power. The members of Congress, Assemblies, or Conventions, by having had experience in national concerns, will be able and useful counsellors, and the whole, being impowered by the people, will have a truly legal authority.	46
The conferring members being met, let their business be to frame a CONTINENTAL CHARTER, or Charter of the United Colonies; (answering to what is called the Magna Charta of England) fixing the number and manner of choosing members of Congress, members of Assembly, with their date of sitting, and drawing the line of business and jurisdiction between them: (Always remembering, that our strength is continental, not provincial:) Securing freedom and property to all men, and above all things, the free exercise of religion, according to the dictates of conscience; with such other matter as is necessary for a charter to contain. Immediately after which, the said Conference to dissolve, and the bodies which shall be chosen comformable to the said charter, to be the legislators and governors of this continent for the time being: Whose peace and happiness, may God preserve, Amen.	47
Should any body of men be hereafter delegated for this or some similar purpose, I offer them the following extracts from that wise observer on governments Dragonetti. "The science" says he "of the politician consists in fixing the true point of happiness and freedom. Those men would deserve the gratitude of ages, who should discover a mode of government that contained the greatest sum of individual happiness, with the least national expense." "Dragonetti on virtue and rewards."	48
But where says some is the King of America? I'll tell you Friend, he reigns above, and doth not make havoc of mankind like the Royal Brute of Britain. Yet that we may not appear to be defective even in earthly honors, let a day be solemnly set apart for proclaiming the charter; let it be brought forth placed on the divine law, the word of God; let a crown be placed thereon, by which the world may know, that so far as we approve as monarchy, that in America THE LAW IS KING. For as in absolute governments the King is law, so in free countries the law ought to be King; and there ought to be no other. But lest any ill use should afterwards arise, let the crown at the conclusion of the ceremony be demolished, and scattered among the people whose right it is.	49
A government of our own is our natural right: And when a man seriously reflects on the precariousness of human affairs, he will become convinced, that it is infinitely wiser and safer, to form a constitution of our own in a cool deliberate manner, while we have it in our power, than to trust such an interesting event to time and chance. If we omit it now, some, 2 Massanello may hereafter arise, who laying hold of popular disquietudes, may collect together the desperate and discontented, and by assuming to themselves the powers of government, may sweep away the liberties of the continent like a deluge. Should the government of America return again into the hands of Britain, the tottering situation of things, will be a temptation for some desperate adventurer to try his fortune; and in such a case, what relief can Britain give? Ere she could hear the news, the fatal business might be done; and ourselves suffering like the wretched Britons under the oppression of the Conqueror. Ye that oppose independance now, ye know not what ye do; ye are opening a door to eternal tyranny, by keeping vacant the seat of government. There are thousands, and tens of thousands, who would think it glorious to expel from the continent, that barbarous and hellish power, which hath stirred up the Indians and Negroes to destroy us, the cruelty hath a double guilt, it is dealing brutally by us, and treacherously by them.	50
To talk of friendship with those in whom our reason forbids us to have faith, and our affections wounded through a thousand pores instruct us to detest, is madness and folly. Every day wears out the little remains of kindred between us and them, and can there be any reason to hope, that as the relationship expires, the affection will increase, or that we shall agree better, when we have ten times more and greater concerns to quarrel over than ever?	51
Ye that tell us of harmony and reconciliation, can ye restore to us the time that is past? Can ye give to prostitution its former innocence? Neither can ye reconcile Britain and America. The last cord now is broken, the people of England are presenting addresses against us. There are injuries which nature cannot forgive; she would cease to be nature if she did. As well can the lover forgive the ravisher of his mistress, as the continent forgive the murders of Britain. The Almighty hath implanted in us these unextinguishable feelings for good and wise purposes. They are the guardians of his image in our hearts. They distinguish us from the herd of common animals. The social compact would dissolve, and justice be extirpated from the earth, or have only a casual existence were we callous to the touches of affection. The robber, and the murderer, would often escape unpunished, did not the injuries which our tempers sustain, provoke us into justice.	52
O ye that love mankind! Ye that dare oppose, not only the tyranny, but the tyrant, stand forth! Every spot of the old world is overrun with oppression. Freedom hath been hunted round the globe. Asia, and Africa, have long expelled her.—Europe regards her like a stranger, and England hath given her warning to depart. O! receive the fugitive, and prepare in time an asylum for mankind.

Education in Economic Freedom Awards

Honors for Education in Economic Freedom 

The Top Ten Sites

10

Libertarianism.org

Economic freedom can not be separated from other freedoms. It all starts with property rights. This group does a good job at laying the foundations to morally justify liberty.


9

Praxgirl - Human Action

Making Ludwig von Mises opus, Human Action, accesible is a tremendous task. To do it on a bitcoin shoestring budget is Herculean. Praxgirl beats out not just Free to Choose Network, but also Cato and Mercatus to make it to #9


8

Center for Freedom and Prosperity

Relatively new, but off to a good start. A mix of short policy and economic videos are good, but need more appeal to a younger audience.

7

Economic Freedom

New but off to a great start. More, more, more. 

6

Institute For Humane Studies / LearnLiberty

Good videos. It could use a more comprehensive approach to match others rated higher. It has a good core group, but needs to expand.

5

Reason

Accessibility is good in this mix of economics and policy perspective, wrapped in a black leather jacket.

4

Hoover Institution

This bastion of traditional conservatives is not just for foreign policy, The presence of Thomas Sowell alone is enough to make the top ten. Add Russ Roberts, Richard Epstein, Victor Davis  Hanson, and Peter Robinson justify the #4 position. Peter Robinson, who wrote the Brandenburg Gate speech for Reagan, is partly responsible for increasing the economic freedom of hundreds of millions of people.

3

Liberty Fund

The prototype for others, Liberty Fund includes he Library of Economics and Liberty, The Online Library of Liberty, and The Library of Law and Liberty . Econtalk with Russ Roberts, and Econlog with Arnold Kling, Brian Caplan, David Henderson, add depth and texture to a otherwise stayed resource format.


2

Foundation for Economic Education

A good collection of print, video and audio is encumbered by a clunky site. The addition of the Freeman puts them ahead of other entrants.


1

Ludwig von Mises Institute

There was no debate. The Mises institute is on a roll. They do the best job of providing many levels of education, as well as a tremendous depth of material in all formats. Although the interface is the best of the bunch, the site is so large, navigation is difficult. It will be interesting to watch their inovation to overcome these challenges in the future.

What is notable about this list are those who did not make it, Cato, Mercatus, Econstories, ect. Our criteria, like value, is subjective. We favored accessibility over scholarship, and comprehensiveness over  cleverness. Lets see how things stack up next year.
Your comments would be enlightening.

Economics in One Lesson by Henry Hazlitt

Credit Diverts Production

Government “encouragement” to business is sometimes as much to be feared as government hostility. This supposed encouragement often takes the form of a direct grant of government credit or a guarantee of private loans.

The question of government credit can often be complicated, because it involves the possibility of inflation. We shall defer analysis of the effects of inflation of various kinds until a later chapter. Here, for the sake of simplicity, we shall assume that the credit we are discussing is noninflationary. Inflation, as we shall later see, while it complicates the analysis, does not at bottom change the consequences of the policies discussed.

A frequent proposal of this sort in Congress is for more credit to farmers. In the eyes of most congressmen the farmers simply cannot get enough credit. The credit supplied by private mortgage companies, insurance companies or country banks is never “adequate.” Congress is always finding new gaps that are not filled by the existing lending institutions, no matter how many of these it has itself already brought into existence. The farmers may have enough long-term credit or enough short-term credit but, it turns out, they have not enough “intermediate” credit; or the interest rate is too high; or the complaint is that private loans are made only to rich and well-established farmers. So new lending institutions and new types of farm loans are piled on top of each other by the legislature.

The faith in all these policies, it will be found, springs from two acts of shortsightedness. One is to look at the matter only from the standpoint of the farmers that borrow. The other is to think only of the first half of the transaction.

Now 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.

We need not discuss here the normal loans that are made to farmers through private sources. They consist of mortgages, of installment credits for the purchase of automobiles, refrigerators, TV sets, tractors and other farm machinery, and of bank loans made to carry the farmer along until he is able to harvest and market his crop and get paid for it. Here we need concern ourselves only with loans to farmers either made directly by some government bureau or guaranteed by it.

These loans are of two main types. One is a loan to enable the farmer to hold his crop off the market. This is an especially harmful type, but it will be more convenient to consider it later when we come to the question of government commodity controls. The other is a loan to provide capital—often to set the farmer up in business by enabling him to buy the farm itself or a mule or tractor, or all three.

Economics in One Lesson

Economics in One Lesson by Henry Hazlitt

Taxes Discourage Production

There is a still further factor which makes it improbable that the wealth created by government spending will fully compensate for the wealth destroyed by the taxes imposed to pay for that spending. It is not a simple question, as so often supposed, of taking something out of the nation’s right-hand pocket to put into its left-hand pocket. The government spenders tell us, for example, that if the national income is $1,500 billion then federal taxes of $360 billion a year would mean that only 24 percent of the national income is being transferred from private purposes to public purposes. This is to talk as if the country were the same sort of unit of pooled resources as a huge corporation, and as if all that were involved were a mere bookkeeping transaction. The government spenders forget that they are taking the money from A in order to pay it to B. Or rather, they know this very well but while they dilate upon all the benefits of the process to B, and all the wonderful things he will have which he would not have had if the money had not been transferred to him, they forget the effects of the transaction on A. B is seen; A is forgotten.

In our modern world there is never the same percentage of income tax levied on everybody. The great burden of income taxes is imposed on a minor percentage of the nation’s income; and these income taxes have to be supplemented by taxes of other kinds. These taxes inevitably affect the actions and incentives of those from whom they are taken. When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only fifty-two cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected. It does not expand its operations, or it expands only those attended with a minimum of risk. People who recognize this situation are deterred from starting new enterprises. Thus old employers do not give more employment, or not as much more as they might have; and others decide not to become employers at all. Improved machinery and better-equipped factories come into existence much more slowly than they otherwise would. The result in the long run is that consumers are prevented from getting better and cheaper products to the extent that they otherwise would, and that real wages are held down, compared with what they might have been.

There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.

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 kind of government services then supplied in return, which among other things safeguard production itself, more than compensate for this. But 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.


Economics in One Lesson

Economics in One Lesson by Henry Hazlitt

Public Works Mean Taxes

A bridge is built. I fit is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money had it had not been taxed away from them, there can be no objection. But a bridge built primarily “to provide employment” is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only of where bridges must be built the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries.

Two arguments are put forward for the bridge, one of which is mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.

This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been adiversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

But then we come to the second argument. The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.

Economics in One Lesson