Tuesday, February 3, 2009

What causes prosperity?

"Thinking to get at once all the gold the goose could give,
he killed it and opened it only to find - nothing."

-- Aesop (c. 550 B.C.) The Goose with the Golden Eggs


"If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of repercussions, the real income of the community, and its capital wealth, would probably become a good deal greater than it actually is."

-- John Maynard Keynes (1883-1946)
The General Theory of Employment, Interest and Money (London: Macmillan, 1936), p. 129.


"The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principle that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations; though the effect of these obstructions is always more or less either to encroach upon its freedom, or to diminish its security. "

-- Adam Smith (1723-1790)
An Inquiry into the Nature and Causes of the Wealth of Nations, 1776, par. IV.5.82


"[R]ational self-interest and the individual's freedom to act on the basis of it underlie private property and private ownership of the means of production, saving and capital accumulation, the division of labor, exchange and money, financial self-interest and the profit motive, economic inequality, economic competition and the price system--in a word, the whole range of capitalism's economic institutions.

The combined effect of these institutions is economic progress--that is, the increase in the productive power of human labor and the consequent enjoyment of rising standards of living. Economic progress is the natural accompaniment of rationality and the freedom to act on it."

--George Reisman, Capitalism: A Treatise on Economics, 1996, pg. 28


What do you think?

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2 comments:

seine said...

Free people, acting rationally, building on an ever increasing accumulation of productive effort, protected from destruction by a government that recognizes property rights.

Beth said...

seine,
Well summarized. Thank you.