Opus 2021-092: It Is Just a Cup of Coffee

One of the frequent trains of thought I have in my morning worship involves the amazement I feel at all the people that have gone into me enjoying a simple cup of coffee in the morning.  I think about the Juan Valdez’s picking the beans and my trail moves all the way to electrician who installed the wires for my coffee maker.  It is amazing how many people around the world are involved in the simple pleasures of life.

As I was looking through my notes on Adam Smith’s Wealth of Nations I came across him expressing this same idea.

“The woollen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country? How much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world? What a variety of labour, too, is necessary in order to produce the tools of the meanest of those workmen!”  Wealth of Nations, Project Gutenberg, Kindle location 222-28

The thought of a government committee trying to arrange everything that goes on in my life fills me with panic.  The free market works because millions of people making decisions can not be duplicated in a government think tank.

Long live free enterprise.  Down with government controls.

homo unius libri

Opus 2019-017: Progressive Barbarians vs Us Common Folk

Modern technology and free enterprise economics have changed the way we look at wealth.  It is no longer a zero sum game although a lot of progressives act like it. 

Before the industrial age wealth was concentrated in the hands of a few.  The masses lived hand to mouth and day to day.  All but a few were farmers and a bad storm could wipe out a years work.  Land belonged to the nobility and the church.  The only way to accumulate wealth was to deprive someone else through coercion, theft, or looting in war.  We get a picture of this in Joshua 22:8

(Jos 22:8 KJV) And he spake unto them, saying, Return with much riches unto your tents, and with very much cattle, with silver, and with gold, and with brass, and with iron, and with very much raiment: divide the spoil of your enemies with your brethren.

This was to soldiers coming back from attacking and looting a city.

Riches was not defined by what they have created but by what they have taken from others.  The only way to get wealth seems to have been looting and pillaging. 

Then came the industrial revolution.  Now, with machines and sources of power, one person could make large numbers of items.  Production soared along with productivity.  Adam Smith in Wealth of Nations gives and example in making pins.  He said that it would be considered a major accomplishment for a lone worker without all the machines to make one pin in a day.  With machines and the division of labor a crew of 10 could make 48,000 in a day.  Imagine how that reduced the cost of such a simple thing as a pin and improved the life of everyone. (page 2)

Wealth today is not just a case of moving gold coins around from bank to bank.  New wealth and value can be generated by reducing the cost of making the same item and because of the reduced cost, selling many more to the public.  Of course this assumes that the public has jobs that pay enough to buy the items.  There is no end to the level of prosperity the world can know.

Another reason that prosperity is more wide spread is the innovation of the entrepreneur.  Automobiles were at one point only for the rich.  Competition drove Henry Ford to come up with the assembly line and the car became available to almost everyone.  We have seen the same thing in computers and telephones.  Wood was replaced by coal.  Coal was replaced by oil products.  Electricity became a common resource.  Nuclear energy is now available.  Perhaps we will see engines run by hydrogen and solar power may become economically feasible.  Every step generates more wealth and the cycle will keep going on.

So don’t get too upset by the economists who are living in the days of barbarian looting.  Most of the well-known ones are socialists at heart and live off the productivity of others.  If they had their way we would be back to feudalism, with them as the nobility, of course.  In reality, there is enough to go around and more coming.  All we need to do is free enterprise and the ability to pursue our dreams.

Smith, Adam.  The Wealth of Nations.  Norwalk, Connecticut:  The Easton Press, nd.

homo unius libri

Opus 2017-283: Adam Smith Rides Again

You may not like Adam Smith.  You may not have read Wealth of Nations.  You may not believe in the “invisible hand” or the butcher who gives you good cuts of meat because he is selfish.  The guys at The Last Refuge have, even if they have not.

There is a good analysis of the President’s speech on Afghanistan.  It is worth reading but the part that got my attention was in the next to last paragraph.

“The U.S. military is not the leverage, the military helps creates leverage. The leverage itself is economic.  Financial interests are always the best leverage to use because inherent within the fundamental principles of economics is ‘self-interest’.  Actions taken generate financial benefits; those benefits are direct and immediate to the interests of those generating the results.”

Trump is applying Adam Smith’s invisible hand.  He is working to get countries like Pakistan to stand up against evil, not because we threaten them with our military might, but because it will work for them economically.  Against military force they would plug in their machismo and dig in to prove they are men.  When it comes to their pocket book they become all ears.

Bravo to The Last Refuge, President Trump and Adam Smith.

homo unius libri

Opus 2017-219: A Building Block of Civilization

One of the fantasies of our modern age is “back to nature”.  We have people who think that life would be so much better if we were all raising our own food, making our own clothes and free from the demands of modern society.  Although I salute people who want to simplify life and minimize their dependence on industrial society, it is a dream that would only mean misery and suffering to most people who try it.

Picture what it would be like for a family to be totally isolated.  Think about growing your own food.  You would make everything yourself and do everything yourself.  That means that unless you are a miner, ore processor and blacksmith you would not be able to have any tools that were not made with local wood and stone you gathered and chipped yourself.  You would need to learn how to tame and train animals to pull the wood plow you made yourself or have a lot of children to hook up to the self made harness.  And of course, where would you get your seed?  And have you ever seen a vegetable garden with no pesticides?  And all of these specialties would need to proceed at the same time. 

One of the greatest boons for living in comfort and plenty is the step our ancestors made with a division of labor.  Adam Smith in Wealth of Nations put it this way,

“The greatest improvements in the productive powers of labour, and the greater part of the skill, dexterity, and judgment, with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.”  (Kindle Highlight Location, 108-10)

He gives an illustration with a simple tool called a pin.  You know, the straight pins that the tailor used to hem your pants.  He says that one person working by themselves would have a hard time making twenty pins in a day, yet with the division of labor and the machines involved ten men could make 48,000 in a day. (Kindle Highlight Location, 130-31)

Think about the simple things we take for granted:  Aspirin, pencils, rubber bands, gasoline, or oatmeal.  Add to that all the complex luxuries we consider necessities:  Air conditioning, radio, microwave ovens and skateboards.  All of these come to us because of the increased productivity from the division of labor.

I don’t know what you contribute but you are part of the mosaic that makes modern civilization and gives of longer and healthier lives.

Smith, Adam.  An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Project Gutenberg download.

homo unius libri