Wednesday, August 26, 2015

Freedom, Liberty and Prosperity

Liberty is to be free from restraint and violence from others.

'Freedom...[is] a Liberty to dispose, and order, as he lists, his Persons, Actions, Possessions, and his whole Property, within the Allowance of those Laws under which he is; and therin not to be subject to the arbitrary Will of another, but freely follow his own.'
'[T]he law is not to abolish or restrain, but to preserve and enlarge Freedom....For who could be free, when every other Man's Humor might domineer over him?'

John Locke Second Treatise on Government
Persons at Liberty have control of their own labor. 

A market is a place where buyers and sellers engage in voluntary exchange. 

Consumer sovereignty is the idea that consumers ultimately dictate what will be produced by choosing what to purchase.

In a free-market system, the distribution of output, who gets to consume what, is determined in an organic decentralized way. The amount that any one individual gets depends on ones income and wealth. Income is the amount that the individual earns each year. Typically by selling labor. Individuals sell labor for the value it creates for a producer. Wealth is the amount that households have accumulated out of past income through savings.

So, in a market economy, what is produced is driven by consumer sovereignty. How it is produced is decided by producers bidding market prices for resources. These resources include the labor of individuals. The price individuals can command for their labor determines what an individual consumes.

With participants maximizing their well being, resources are put to their highest and best use, directed by the various values - desires - of the various participants and subject to the availability of information. Just about everybody prefers more money to less, because money offers a general command over the resources that can be used to enhance ones interests, whatever they may be.

Prosperity is flourishing and thriving. We flourish when we have the resources to achieve our security, our needs and to the extent possible, our desires - enhancing ones interests.

Governments require resources. These resources are taken by taxation laws. Governments are established by the will of the people in the polity. People submit to the laws of their government voluntarily or are compelled by force. Arguably, in a government of the people, by the people and for the people, people do so in order to get goods which are better produced collectively such as security in the form of defense, the rule of law (protection from coercion) and a cooperative approach to the care of the least able - children, the sick and the old. In other forms of government they are coerced into submission. In all cases, what one person receives without working for, another person must work for without receiving.

Non market decisions organize resources less optimally, not to their highest and best use, as the decision makers, a person somewhere - typically a government official, are removed from the maximizing motivations of participants and guided by other incentives, typically, bureaucratic incentives. The blizzard of information contained in prices offered and voluntary paid is also often absent. This casts our nominal decision maker adrift into a land of arbitrariness. It also abets prerogative creation and solicitation - crony capitalism.

Every single thing we do through non-market decision making and action causes a frictional drain on our potential collective maximum prosperity.
Accurate Reality: We are by and large free here in the United States. The emotion involved in the restore limited government movement feeds on an increase in the arbitrariness of government actions and the corrupting acid of prerogative. More importantly, it steadily reduces our prosperity from our potential prosperity. It drains resources by leaving them uncreated. Every time you think 'the government should do something about that,' understand that you are condemning us all to less prosperity, less freedom and less liberty. 

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