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ideological culture political economy

Cash Machine Cachet

Shutting down capitalism almost worldwide may prove to be the grandest disaster of all time. Folks on the margin of poverty in poor countries are already starving. Though scads of people seem to think we could ride out a lockdown indefinitely just by cashing government checks, the problem is that if we don’t produce, we cannot buy and consume products. 

It’s not about money, or profits as such: “It’s the productivity, stupid!” 

Elon Musk put it this way: “If you don’t make stuff, there’s no stuff.” 

A “universal basic income” won’t help if the re-​distributed money chases few-​to-​no goods.

So how did we come to believe that we can just shut down most business activity and still survive?

Maybe the idea seems plausible because many people already do not work to survive. As their numbers have increased, our civilization has forgotten that they survive upon the work of others. 

We guffaw at young children who, when their parents say something they want is too expensive, they innocently respond, ‘well, just go to the cash machine!’ But the more people rely upon checks and bank deposits from the government — for any reason — the harder it is to remember that the power to buy stuff doesn’t ultimately come from government. With taxation, redistribution and inflation thrown into the mix, even adults think of government as Cash Machine. 

And the Cash Machine as a model for the economy.

To fight a virus, the world has shut down production — as if we do not survive by producing goods in order to consume them.

Government has reduced capitalism — and us — to absurdity.

This is Common Sense. I’m Paul Jacob.


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folly general freedom ideological culture nannyism national politics & policies too much government

“Unacceptable,” He Sputtered

The King Canute Memorial Award for Clueless Legislation (Winter 2015 – 16) goes to Senator Bernie Sanders. He had stiff competition from ocean-​lowering President Barack Obama, this season, but surely earned it these past few months.

Canute famously warned his advisors that he was no miracle worker. Standing by the sea and commanding the tide to turn only works on a regular schedule — set by natural forces, knowable in advance only after years of careful observation. All the hand-​waving, incantations and official edicts cannot change the tide.

The award goes to those most in need of the Full Canute Object Lesson. Sanders’s latest ninnyism begs for just such a lesson: He wants to establish maximum fees for ATMs, down to $2 per transaction.

As everyone knows, some ATMs charge more than others. Why? It is not costless to provide electronic bank inquiries and withdrawals around the country … and the world. And profitability varies.

Supply and demand. Entrepreneurs do not offer these services out of charity. Close off profits in some areas, there will be corresponding effects.

From my experience, transaction fees range from about five bucks down to … Zero.

I usually pay nothing.

Outlawing fees above some arbitrary maximum will almost certainly ensure there will be fewer ATMs — particularly in low-​use areas — and might even raise those zero-​priced transactions to one- or two-​buck fees.

Prices aren’t arbitrary, so no matter how loudly Bernie Sanders sputters “Unacceptable,” price ceilings aren’t magically going to produce the same service at less cost.

This is Common Sense. I’m Paul Jacob.


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