Words of Wisdom

The following observations are true although the author is unknown to the Rainmaker. Please read, consider and share them as you see fit.

First, it is impossible to legislate the poor into financial freedom by legislating the wealthy out of financial freedom or even into poverty.

Second, what one person receives without working for, another person must work for without receiving.

Third, the government cannot give anybody anything that the government does not first take from somebody else.

Fourth, when half the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody is going to get what they work for, that is about the end of any nation.

Fifth, it is simply impossible to multiply wealth by dividing it.

Finally, it is simply impossible to legislate morality.

The Rainmaker thanks Peter Poranski for inspiring this post.

The Invisible Hand

Al Gore recently made news saying within ten years non carbon sources should provide all electricity generation in the United States. That would be a laudable outcome. Of course it won't happen unless there is a government mandate. Mr. Gore obviously has no problem with government making these decisions. But, candidly, that isn't the way the world really works. How do we know?

We know because centralized decision making has failed over and over. The grand experiments with state control of the economy failed repeatedly, most notably in the former USSR and the People's Republic of China. In fact the Chinese ecnomic miracle was made possible by Comrade Deng's decision to embrace decentralized economic decision making a few decades ago.

Other less well known failures of centralized economic decision making abound, featuring "deciders" such as the despot de jure of various third world countries as well as World Bank, the International Monetary Fund or Fannie Mae.

But what is the alternative?

Clearly, given a chance people will make the best economic decisions they can. Eventually they do the right thing and positive unintended consequences result for all of us.

Today we have two examples of this phenomena reported in the Washington Post. One is an effort by baseball, and other pro sports to "go green." (See: "Green Becomes the Official Color of Baseball" July 19, 2008 at http://www.washingtonpost.com/) Another describes an economic phenomena resulting in 10% of electric power in Texas now coming from wind energy. (See: "The Aswer's In The Wind--and Sun" July 19, 2008 at http://www.washingtonpost.com/)

These examples required zero government intervention or interference. People and corporations are following their elightened self interest; simply doing well by doing good.

Back in 1776 at the same time as the American experiement inspired by self interest began exploring a new theory of individual sovereignty in the "Declaration of Independence," a Scottsman named Adam Smith wrote "The Wealth of Nations." In it he predicted that "the invisible hand" would motivate the exact sort of outcomes as the Washington Post reported in today's paper.

I wonder how the baseball teams and wind generation companies managed without Al Gore, Congress and whoever becomes President telling them what to do.