To determine whether we shortchange ourselves by choosing taxation and other forms of aggression as a means to our ends, we must understand what wealth is and where it comes from. We usually equate money with wealth, but they are really very different things. Imagine a person stranded on a desert island without food, water, shelter, or medicine, but with a billion dollars in gold coin. Is this person wealthy? Hardly! Food, water, shelter, and medicine prerequisites for physical survival are true wealth. Money is valuable only if it can be exchanged for something of value, such as goods or services. Money is only a measure of how much of the available wealth a person has access to. If no wealth is available, money is worthless. Just how much wealth is available? Imagine the total wealth in the world 2000 years ago. Did even the richest of the ancients have access to antibiotics, anesthetics, or surgery when their children had appendicitis? Could their entertainers give them the same quality, selection, and special effects that are now available on television? Could they find out about events on the other side of the globe a few minutes after they occurred? Could they "reach out and touch" family members who had migrated to faraway lands? Could they visit their distant relatives after a few hours in the "friendly skies"? Even the wealthiest of the ancients did not have many things we take for granted. A greater number of people than ever before now enjoy a lifestyle that our ancestors could not even imagine. Our wealth has increased greatly. Where did we get all this wealth? The earth certainly did not get an additional endowment of natural resources between ancient times and the present. Instead, we discovered new ways to use existing resources. Coal, oil, and natural gas give us an unprecedented amount of power. We transmit this power over electrical wires and send communications via satellite. The antibiotics produced by fungi have been harnessed to fight infectious bacteria that invade our bodies. We stimulate our immune system with vaccines so that the ancient plagues have all but vanished. Artificial wings fly us all over the globe. Mass production, assembly lines, and robotics help to replicate the wealth-creating ideas. The new wealth allows creation of still greater wealth. For example, the energy trapped in fossil fuels lets us create new metal alloys that require higher smelting temperatures than wood can provide. One idea leads to the next. We see that specific ideas on better uses for existing resources and the replication of these ideas are the real source of wealth. Natural resources are like seeds that grow into wealth when they are nurtured and developed by individuals acting alone or in concert. For example, oil was once considered a nuisance that contaminated good farmland. Not until enterprising individuals discovered how to pump, refine, and use it did oil turn into "black gold." Even water must be "developed" (drawn from a stream, well, or reservoir) before it can quench our thirst. The amount of wealth a country produces does not depend primarily on its endowment of natural resource "seeds." Japan has almost no mineral wealth, while Mexico is well endowed, yet the Japanese are certainly more affluent than the Mexicans.1 Similarly, North Korea is poorer than South Korea. (2) East Germany created much less wealth than West Germany before reunification in 1990.2,3 Obviously, resource endowment is not the primary factor that determines a country's wealth. Population density cannot be the dominating factor either: both Japan and West Germany have a greater population density than their poorer neighbors Mexico and East Germany. (3) When we consider that resources will one day be mined from planets other than the earth, that matter and energy are totally interchangeable, and that basic chemical elements can be transmuted, we realize that resource seeds are so abundant that they do not impose practical limitations on the creation of wealth at all. Even if our fossil fuels should be foolishly exhausted, for example, energy is abundantly available in each and every atom if only we knew as we one day will how to tap it safely. Even if we foolishly devastated our home world by unsound environmental management, a universe of other planets are available to us when we learn as we one day will how to reach them. Human resources, our "how to" ideas, and the replication of these ideas, determine how much available wealth there is at any one time. Since human creativity appears unbounded, the amount of wealth possible is virtually infinite! Truly we live in a "no limit" world! The realization that resources do not limit the creation of wealth is a liberating one. Our country's wealth does not depend on the happenstance of its geographical boundaries, but on the self-determined thoughts and creativity of its populace. We create our world. What secrets do the countries that enjoy great wealth possess? How are their popula-tions different? As this book will demonstrate, cultures with a strong belief in the practice of non-aggression, individually and collectively, enjoy the highest level of peace and prosperity.
We've seen how wealth is created by individuals, working alone or as part of a team. New ideas are implemented or reproduced. Our imaginary neighbor, George, for example, may work in a factory where he makes chairs. The factory owner gets the lumber from a tree farmer who planted and harvested the trees. These three individuals create new wealth in the form of chairs. They share the resulting wealth by exchanging it for money. They then trade their money for the wealth (food, clothing, etc.) that others have created. Wealth belongs to its creators. All three individuals helped to create the chairs. Without their effort, the new wealth would not exist. When dealing with other individuals, we instinctively recognize this fact and act on it. We would never dream of going to George's house with a gun to steal the wealth he has created. He'd retaliate and we would take turns being victims and aggressors. With continual "warfare," a jungle-like atmosphere would pervade our neighborhood, and property values would plummet as wealth was consumed in the struggle. Effort would be directed at making war instead of wealth. Enlightened self-interest gives us strong incentives to practice non-aggression individually. If we personally steal from George, we create havoc in
our neighborhood. Nevertheless, we believe we can avoid this outcome if
the government enforcement agents, acting on our behalf, perform the identical
action. We believe the act of stealing is ennobled if the authority of the
majority deems it to be for "the common good." As we'll see in
the next few chapters, the laws of cause and effect still apply. The consequences
of aggression are the same, whether perpetrated by an individual or a group.
When groups of neighbors ask their government to steal from other
groups of neighbors, we take turns being majorities and minorities,
victims and aggressors. A jungle-like atmosphere prevails as effort is directed
toward making war instead of wealth. Enlightened self-interest directs us
toward the practice of non-aggression collectively if we would only realize
it! The "free market" is the name given to describe the marketplace ecosystem when it is free from aggression. In the 1800s, our country came closest to this ideal. As a consequence, penniless immigrants flocked to our nation to make a better life for themselves and their loved ones. America became known as the "land of opportunity" and the richest nation on earth. Wealth was the natural by-product of a marketplace ecosystem free from aggression. As detailed in Chapter 19 (The Communist Threat is All in Our Minds), democracies tend to have less aggression than the Communist ones. This is why North Korea and East Germany, before unification, created much less wealth than their "free world" counterparts. (2,3) Even in the early days of the United States, the marketplace ecosystem was not entirely free from aggression, however. If a drug company sold untested products or if doctors misrepresented their training, the distraught consumers or their survivors had minimal recourse. Some forms of aggression, notably fraud, were widely practiced by individuals. Our ancestors knew how to practice non-aggression themselves. What they did not know was the most effective way to deal with those who aggressed against them. Consequently, this aggression persisted. Eventually, people began to believe that freedom from aggression was an unattainable ideal because selfish others were always ready, willing, and able to take advantage of their neighbors. They adopted the belief that the aggressors enjoyed "too much freedom." People instructed their government to strike first and use aggression to prevent aggression. Their motto became "do unto others before they do unto you." To fight the "evil" of aggression, they became aggressors themselves, with consequences more terrible than those they sought to prevent. Let's see exactly how this happened in our own land of opportunity. |
...most real wealth originates in individual minds in unpredictable and uncontrollable ways. - George Gilder, WEALTH AND POVERTY
...Amnesty International's listing of human rights abuses shows a definite pattern where those nations with the least respect for human rights are also the poorest. By contrast, those with the greatest respect for human rights tend to be the richest. - Walter Williams, ALL IT TAKES IS GUTS
...the free market is a society in which all exchange voluntarily. It may most easily be conceived as a situation in which no one aggresses against person or property. - Murray Rothbard, POWER AND THE MARKET
The trouble with people isn't their ignorance-it's the number of things they know that just ain't so. - Mark Twain, American humorist and novelist |