Economic Liberty

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“Economic freedom is … an indispensable means toward the achievement of political freedom.”

Milton Friedman

Economic liberty is the freedom to use the fruits of your labors as you see fit, without unlawful confiscation, illegal tracking, and undue constraints or pressure.

The Declaration of Independence of the United States of America notes that we are all born with certain inalienable rights. It goes on to note that the legitimate purpose of government is to protect those rights. Further, it notes that the powers of government are granted to it by the people to enable the protection of these rights.

When government takes power to itself, when it begins to take actions which deprive people of their rights instead of protecting those rights, it is engaging in illegitimate actions and transforms itself into an enemy of the people.

The war which led to the creation of the United States of America was caused by predatory and illegitimate actions of the government of Great Britain which had as their aim and effect to deprive the people of the very rights the government was supposed to protect.

The people have a reasonable expectation that the government will protect their property, including their income and wealth from unlawful taking and to not enact laws which violate the unalienable rights to property, liberty, and life. Laws enacted which violate the rights guaranteed by the Constitution and Bill of Rights of the United States of America are predatory, not legitimate, and do not lawfully require obedience by the people.

The greater good is neither great nor good.

The greatest good comes from protecting the rights of all individuals.

Key Principles of Economic Liberty

Since the time when Woodrow Wilson was President of the United States of America (POTUS) many laws, regulations, programs, and ordinances have been enacted at both the Federal and State levels which have the effect of unlawfully depriving people of the fruits of their labors.  Many of these actions have been rationalized as providing for "the greater good."  In other words, those supporting these actions believe that the needs and wants of some people are sufficient cause to violate the rights of individuals to take the fruits of their labors and use them to administer to the needs and wants of designated segments of the populace.

What is financial liberty?

Probably the most fundamental, and overlooked, principle of the system of capitalism is that it is driven by uncoerced exchanges.  The lack of coercion is what makes free enterprise actually free. As soon as coercion is present, they system is no longer free.

Financial liberty is having the ability to use your financial resources according to your own best judgement and your own priorities. This includes freedom from being coerced into providing your financial resources for others to use.

The Institute for Justice defines economic liberty as “the right to earn a living in the occupation of your choice without unnecessary government interference.”[1] (The Institute for Justice, 2022). We would add to that the right to enjoy the fruits of your labors without unnecessary government interference.

Some will undoubtedly read these definitions and proclaim them selfish, self-centered, and stingy. While they are inarguably self-centered, whether or not it is selfish or stingy depends entirely on the priorities of the individual when they use their wealth.

Critics of capitalism and economic liberty project their own rapacious natures onto others and erroneously proclaim that wealth is accumulated only by stealing it from others.  They incorrectly assume that we are locked into a zero-sum game where I can only get more by making sure you have less. Perhaps they don’t put it this way, but they fundamentally believe that wealth is like matter and energy in its nature.  It is neither created, nor destroyed, only transformed.  This view transforms the wealth cycle into an exercise in the “law of the jungle” where the strong survive by eating the weak.

There are at least two, probably more, fundamental flaws in these assumptions.  The first is the zero-sum.

[1] https://ij.org/issues/economic-liberty/ as viewed 4/4/22

The Failure of Zero-Sum Game Thinking

Critics of capitalism and economic liberty point to some traditional Christian ideas which conflict directly with science and use that conflict to dismiss many true principles.

Many in the traditional Judeao-Christian tradition believe that the story of the creation of the Heavens and Earth, as described in the Book of Genesis appears to show God creating something out of nothing.  The Apostle Paul, before his conversion to Christianity, was known as Saul of Tarsus and he was thoroughly educated in the Jewish traditions and scripture.  In his Letter to the Hebrews he tells them, “… the worlds were framed by the word of God, so that things which are seen were not made of things which do appear.” (Hebrews 11:3)

Paul knew that simply because something was not visible, did not mean it did not exist.  In January of 2022 Space.com declared, “Over 80% of all matter in the universe is made up of material scientists have never seen.”

Since the 1830’s Members of the Church of Jesus Christ of Latter-day Saints are explicitly taught that the earth was “organized”, formed from unorganized matter.  Scientific descriptions of interstellar creative processes support that view as we see clouds of dust and gasses pulled together by gravitational forces until they are compressed enough to explode into stars, which in shape the remnants of those clouds into planets.

The first failing of those who embrace the zero-sum game is that their understanding of the size of the pie they think we are fighting over is much larger, more abundant, and more creative than they have ever imagined.  To push the pie analogy, they see the pie in front of them and imagine that is all the pie that exists. They utterly fail to see the endless fields of wheat and orchards of trees which supply us more flour and fruit than all of us together could make into pies if we labored day and night without rest.  They are starving in the midst of plenty.

Read More on the Failures of Zero Sum Game thinking here.

How Wealth is Created

The second failure of these critics is their misunderstanding of how wealth is created.

They think wealth is created by the delivery of objects in your hands.  That is wrong. The object in your hand is the very last vestige and nearly the least important part of wealth creation.

Wealth creation is not driven by things. Wealth creation is driven by ideas. Is there anyone who can see the time or place when and where ideas cease? No. It is an ever-expanding universe.  In fact, the very nature of ideas is the total opposite of the zero-sum game.

Zero-sum game theory says, if I have a pie and give it to you, then I have none.  Contrary to zero-sum game theory, if I have an idea and give it to you, I still have the idea, and now you do too. What is more, when I give you my idea you might add to it your idea and make my idea even better, and now we both have an improved idea.

This is the true genesis of wealth. It comes from ideas.  Ideas get improved and eventually turned into goods and services which people value enough to trade for some portion of their material goods.

Quite literally, wealth is created out of thin air. Ideas are the very essence of “thin air.”  They are utterly insubstantial and ephemeral until first put into words, and then into actions. Every entrepreneur begins with an idea, which they eventually turn into an enterprise that provides value to others.

Over the years many people have been quick to criticize capitalism as a predatory economic model. They based this idea on two things:

1)     The predatory nature of some self-styled capitalists

2)     A fundamental misunderstanding of how wealth is created

This article will focus primarily on the latter point. However, addressing the first point is essential to remove it as a stumbling block to understanding.

Predators, Capitalists, and Autocrats

The essence of capitalism is an uncoerced mutual exchange of items (or services) of value.

When any self-styled capitalist attempts to create monopolies, either by elimination of competitors or through collusion with government officials to enact “regulatory” barriers that prevent competition, they are seeking to coerce (force) people to buy their product(s) by making it the only product available.

Coercion is not Capitalism

Coercion is antithetical to capitalism. Embracing coercive approaches to the market, kills the capitalist, converting him or her into an autocrat. Dictators or absolute monarchs in their own fiefdom.

Inherent in the nature of capitalism is competition. The competition is based on value, real or perceived. The greater the value of the product, the more people will desire to obtain it.

Predators

Predatory capitalists seek to trick buyers into obtaining sub-standard (or even harmful) products. If these predators are unable to create a monopoly, the free-market system will almost always yield a better alternative from a competitor which will overshadow the sham-product and push the predator out of the market

In the most extreme cases a predator delivering harmful products might be forced by legal actions to desist. Although even this state-enforced coercion is only necessary in the face of a predator who knowingly makes false claims about their product. Usually, publicity from the legal prosecution of false advertising charges is enough to dissuade buyers from purchasing a harmful product. However, if a person knowingly desires to obtain a product which harms themselves (and not others), it is not the role of society to prevent such self-destructive behaviors.

Having dismissed the predators as faux-capitalists, we can move on to clarifying the process of wealth creation.

Fundamentals of Wealth Creation

First, let’s define wealth, so that we are all talking about the same objective. Setting a dollar figure to define wealth is useless. As prices rise or fall, the mark rises and falls. If dollars were to disappear, or become worthless, then the dollar-based definition of wealth would be meaningless.

Wealth is not merely the absence of scarcity. Wealth, simply defined, is abundance. You are wealthy when all your needs are met without making a tradeoff between satisfying one need or another. When you are wealthy, you have the time and means to satisfy all your needs.

Means and Ends

A word of caution is in order here. How you gain your wealth is infinitely more important than how much wealth you gain. What you ARE, is more important than the things you HAVE.

My mother used to say, “Putting a tuxedo on a boar hog doesn’t make him a gentleman and putting lipstick on a sow pig doesn’t make her a lady.”

When you look into your own eyes in the mirror, looking past the trappings on your body, is the person looking back at you someone you love, trust, and want to be around? If not, then you must change what you ARE before worrying about what you HAVE.

“For what shall it profit a man, if he shall gain the whole world, and lose his own soul?” 

The Holy Bible, Mark 8:36

If your “soul” is lost, no amount of physical abundance will fill the void within you. 

“As a jewel of gold in a swine’s snout, so is a fair woman which is without discretion.” 

The Holy Bible, Proverbs 11:22

The Secret to Becoming a Wealthy Capitalist

The caption of this section explicitly calls out being a wealthy capitalist. There is a reason for that. It goes back to the prior section about how you gain your wealth.

You can acquire wealth as a predator. Predators kill and steal. They don’t create wealth. They just take off of your plate and put it onto theirs.

Capitalists don’t take wealth from others. They are not predators. They create wealth. When the work of the capitalist is done there is more wealth in the world than there was when s/he started.

The secret to creating wealth as a capitalist lies in providing something to others which they willingly give you some of their wealth to obtain.

What you give them may be information, services, or material goods. As long as they value it enough to compensate you with more than it takes you to produce your product, then you can keep providing it and begin to build your wealth.

Wealth Begins with Ideas

The creation of all wealth begins with ideas in your head. But, not all ideas in your head are equally useful to create wealth. Likewise, any idea that exists only in your head, and isn’t put into words, is useless for creating wealth. If you don’t put your idea into words, it may as well not exist.

Verbalizing your ideas is a good beginning but to transform your ideas into reality requires that you put your ideas into the written word. Putting your ideas into writing allows you clarify and expand your ideas as well as enabling you to transmit your ideas to others regardless of time or distance, while keeping your message consistent. 

Unspoken ideas are mere dreams. They vanish when you awake.

Verbalized ideas are wishes. They go away when you blow out the candles.

Written ideas are goals. They persist and push you to make them reality.

Don’t just think it, or speak it, ink it

Is there any limit on the number of ideas you can have? No. They are infinite in quantity, utterly malleable in their shape, and unstintingly amazing in their variety and nuance. All the flowers in the world, brought together in one place, are but pale shadows of the variety, beauty, and power of ideas that can spring from the most ordinary of minds.

Wealth Generating Ideas

So, which of your ideas are useful to create wealth? Dr. Russell Conwell, author of Acres of Diamonds, taught plainly that wealth arises from meeting the needs of those around you. Filling a real need is the easiest way to create wealth.

Wealth generating ideas are those that devise ways to meet the needs of people around you. The quality or cost of your product or service is irrelevant if no one feels the need for it. If they feel the need, then the quality and cost of your product may shape how strongly others feel your solution will meet their need. 

Unrecognized Needs

If you seem to be the only person who realizes a need exists you are either facing an incredible opportunity, an incredibly difficult struggle, or both.

Almost the entire industry and science of marketing is based on making people feel the need for a particular product or service. Everyone knows they need food, drink, and shelter to survive. Their choices of one restaurant over another, one brand of bread over another, or one hotel over another is often decided by the subtle influences they feel from carefully crafted advertisements designed to create a perceived “need” for one brand over another.

Recognized Needs

If your product or service fulfills a clearly recognized need, rather than a merely perceived one, it is easier to get people to buy what you offer. If the need is not clearly seen, or the people who need your product are not nearby, then you must exert yourself to put your product in front of people who have the need for it, or to make people aware that they have a need which you can meet.


Marketing is Fundamental

You might think that marketing is the last thing you do to turn your ideas into wealth. Actually, it is one of the first hurdles you face. At its heart, marketing is about helping people to realize that what you offer is worth what you ask to fill their need. To help others realize this, you must understand it and be able to explain it convincingly.

If you cannot clearly articulate the need you want to fill, who needs it, and what the unmet need is costing them, then you cannot shape your idea into a product that you can produce and that will meet their need. Also, you will be unable to attract the help of others.

“You need the support and cooperation of other people to achieve any worthwhile goal.” 

Think Like a Winner, Dr. Walter Staples

Wrapping Up

After you identify the need and imagine the product that will meet it, there is a lot of work to be done before your product is ready to put in front of your prospective buyers. A significant portion of that work may be done by others who you enlist to help you. Enlisting that help will be much easier if you have put your idea in writing along with the need it fills and costs people are suffering without your solution.

When you do this successfully, you will begin to generate wealth. It may take a while until your income exceeds your needs and you begin to experience abundance, but it will happen.