Category Archives: Economics

Production

Another great post from John Médaille entitled “Economic Truth and the Bailout.”  Here’s an excerpt:

Speculation is non-productive. True, a person can get very rich by speculation and many do. But in a speculative bet, one man’s gains are measured precisely by another’s losses; there is no net gain to the economy. You can get rich at the race track only because others got a little poorer; for every winning bet there are dozens of losers. But at least the race track track adds a real value—entertainment—to the economy. The derivatives add nothing.

Here is the Great Economic Truth that bankers and economists have forgotten: A nation grows wealthy only by producing things. Only through its farms, fisheries, forests, factories, and mines can real wealth be produced. Everything else, insurance, banking, education, housing, armies, government, churches, entertainment, etc., must live off the wealth produced in the fields, forests, factories, fisheries and mines of a nation. Without these, there can be no original wealth to support all of the other things.