12 October 2008

24. Standard of Living - Keep It or Lose It

This is my discussion regarding a Limitless Standard of Living for all under Capitalism versus a Decreasing Standard of Living for all under Statism. The discussion regarding a Standard of Living under Capitalism comes first, followed by the discussion regarding a Standard of Living under Statism.

Capitalism is responsible for a Limitless, Increasing Standard of Living for All.

Capitalism makes possible a continual increase in the standard of living for billions of free, productive people worldwide. This fact is so obvious, and directly observable, throughout history and in the modern world today. See the examples below.

It is Capitalism and Freedom that lead to a continually increasing standard of living, and economic progress, for billions of individuals worldwide, because both Capitalism and freedom provide the necessary political and economic climate for the unlimited production of wealth (wealth meaning man-made material goods, or economic goods, as described by Dr. George Reisman – see Item No. 12 above). It is the production of wealth that provides the means and makes possible a continually increasing standard of living.

It is also Capitalism and Freedom that provide an individual with the opportunity to maintain, increase, and preserve their personal standard of living. It is ONLY through Capitalism and freedom that any of this is possible – there is no other way for billions of individuals worldwide to truly have the opportunity to increase their standards of living by participating in the unlimited production of wealth.

A capitalist society has what I call a “continual economic movement of productive people” (both individuals and businesses), people that “move” up and down through the various income and standard of living levels that exist in a capitalist society – with most people (individuals and businesses) moving up the economic “ladder” of income and standard of living levels.

Examples: Observe the United States of America, the freer countries of Western Europe (such as The Czech Republic and Ireland) or Asia (such a South Korea), present day Chile, etc.

Observe even the improvements in present day China, of the standard of living of its citizens, when elements of the free-market (Capitalism), and the easing of controls on individual freedom, are allowed to exist and function, despite the fact that China is still a communist dictatorship.

Dr Reisman writes: “There is no fixed limit to the process by which the increasing production of wealth can further enhance and extend human life and its enjoyment.”

--- Dr. George Reisman, from his book Capitalism, Part One, “The Foundations of Economics,” Chapter 2, “Wealth and Its Role in Human Life,” Section 6, “’Scarcity’ and the Transformation of Its Nature Under Capitalism,” p. 55, (Jameson Books, 1998). Reprinted with permission.

Statism is responsible for a Limited, Decreasing Standard of Living for All.

Statism leads to the continual decrease and destruction in the standard of living of billions of its enslaved citizens worldwide. Again, this fact is also so obvious, and directly observable, throughout history and in the modern world today. See the examples below.

It is Statism and Force that lead to the continual limitation, stagnation, decrease, and eventual destruction of any standard of living, including economic decay, for billions of individuals worldwide – from mixed-economies to total dictatorships – because Statism and Force establish the political climate that regulates, limits, controls, redistributes, and eventually destroys the production of wealth (wealth meaning man-made material goods, or economic goods, as described by Dr. George Reisman – see Item No. 12 above). Without the individual and/or business freedom and production of wealth, any true increase or preservation of an individual’s standard of living is impossible.

It is ALWAYS Statism (in any and all of its forms) and force that limits, decreases, and eventually destroys any economic standard of living by regulating, limiting, controlling, and redistributing the production of wealth.

Note that it is Statism, in all its control and regulation of the individual’s life and a country’s economy, that the only a “select” few individuals continue to get richer and richer, while the greater masses of people continue to get poorer and poorer. This is partially due to the motivation behind statist politicians and rulers, statist government workers, and crony capitalists to keep the masses of people worldwide poor and ignorant so that these same statist politicians and rulers, statist government workers, and crony capitalists can maintain their power and control over the populous and the economy – thus slowing, and eventually destroying, the ability of individuals to increase their personal standard of living by regulating, limiting, controlling, and redistributing the production of wealth.

Examples: Observe Nazi Germany, the original U.S.S.R., the original Communist Eastern European countries, old Communist China, Cambodia. Observe present day North Korea, Iran, Zimbabwe, Venezuela, etc.