The Ten Pillars of Economic Wisdom
I used to spend a few weeks every summer when I was a teenager with my grandparents in Missouri. My grandmother and I were always close, and though she graduated high school the same year as my mother (she dropped out the first time around), she and I shared a love for books and learning.
We often listened to Rush Limbaugh and discussed politics, economics and other topics that most find boring. One year she found a photocopy of a small pamphlet she’d gotten from a credit union decades before. It took years for me to discover its origins (thanks Google!), but now I know and I’m sharing it with you.
Read it. Chew on it. Digest it. It may just change the way you see your job, your money, your work, your Social Security payments…
from The American Economic Foundation,
as displayed during the 1964 World’s Fair in New York City
1) Nothing in our material world can come from nowhere or go nowhere, nor can it be free; everything in our economic life has a source, a destination and a cost that must be paid.
2) Government is never a source of goods. Everything produced is produced by the people, and everything that government gives to the people, it must first take from the people.
3) The only valuable money that government has to spend is the money taxed or borrowed out of the people’s earnings. When government decides to spend more than it has thus received, that extra unearned money is created out of thin air, through the banks, and, when spent, takes on value only by reducing the value of all money, savings and insurance.
4) In our modern exchange economy, all payroll and employment come from customers, and the only worth-while job security is customer security; if there are no customers, there can be no payroll and no jobs.
5) Customer security can be achieved by the worker only when he cooperates with management in doing the things that win and hold customers. Job security, therefore, is a partnership problem that can be solved only in a spirit of understanding and cooperation.
6) Because wages are the principal cost of everything, widespread wage increases, without corresponding increases in production, simply increase the cost of every-body’s living.
7) The greatest good for the greatest number means, in its material sense, the greatest goods for the greatest number which, in turn, means the greatest productivity per worker.
8) All productivity is based on three factors: 1) natural resources, whose form, place and condition are changed by the expenditure of 2) human energy (both muscular and mental), with the aid of 3) tools.
9) Tools are the only one of these three factors that man can increase without limit, and tools come into being in a free society only when there is a reward for the temporary self-denial that people must practice in order to channel part of their earnings away from purchases that produce immediate comfort and pleasure, and into new tools of production. Proper payment for the use of tools is essential to their creation.
10) The productivity of the tools–that is, the efficiency of the human energy applied in connection with their use–has always been highest in a competitive society in which the economic decisions are made by millions of progress-seeking individuals, rather than a state-planned society in which those decisions are made by a handful of all-powerful people, regardless of how well-meaning, unselfish, sincere and intelligent those people may be.
Note: Click here for a related ad placed in MIT’s newspaper, The Tech in 1970.
I also passed a copy of it to Dave Ramsey when I first met him at a live event in Atlanta in Nov 2005, but if he read it and had an opinion on it, I’ll never know. (He didn’t mention it on the air.)