Free Enterprise, A Primer On

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Sign in animal park: “Don’t feed the animals. Feeding them causes them to become dependent on food given to them and they lose the ability to fend for themselves.” It illustrates the point that skills and attitudes must be practiced in order to keep those skills and attitudes alive in people. This is true across species.

Here are some examples. Horses raised in stables don’t know how to paw the ground and uncover the frozen grass beneath deep winter snows if they are not taught. When placed with animals used to fending for themselves in the winter, the stable horses quickly learn how to paw the snow aside and nibble the frozen grass that was covered by the snow. When the first White settlers came from Europe to America they did not know how to grow corn. They did not know how to fertilize the corn by placing a fish (that would slowly disintegrate and furnish need elements to the growing corn plant) in each hill of corn planted. The Brown natives saw the Whites starving, took pity on them, and taught them these things. All children, regardless of color, develop work habits at an early age if they are modeled and taught to them. If not, when they report for their first real for-pay work, they may not know how to work.

It is said that at one time the government of Sweden granted unemployment benefits (a monthly check) for a period of five years. Research discovered that most Swedes got another job in the last few months of year five. Therefore, the government lowered the benefits period to four years. Research showed that most got another job in the last few months of year four. The government lowered the benefits period to three years. Research showed that most found another job in the last few years of year three. The government then lowered the benefits period to two years, and that is where it remains today.

While there have been some benefits, most agree that, even though built on good intentions, Lyndon Johnson’s Great Society program has created 3 generations of crippling dependency among America’s poor. Waiting for “check day” usually does not foster creativity, productivity or desire to excel. If you doubt this, get involved with most any school in America’s inner cities and follow the children from kindergarten through junior high and high school. As the dropout rates increase with each ascending grade, you will find the family and home life these children come from to be financially dependent upon the government, usually fatherless, not supportive of learning, heavily drug dependent, parents are often educational dropouts themselves, high exposure to criminal activity, and teenagers and adults often unemployable.

Widespread availability of government funds and food stamps have made it possible for these folks to have food, clothing and shelter without having to provide it for themselves. Their dependency upon the government has led to an entire subculture of poverty and it’s many woes. Perhaps government aid was not such a good idea after all. This author personally witnessed the exodus from welfare to jobs when USA President Bill Clinton started making it harder for able bodied people to receive welfare. The author had had purchased a small apartment building in the inner city of Atlanta. He wanted to “to help.”

The residents learned of the coming government changes regarding welfare. Many of them would no longer qualify to receive a check. They would have to be enrolled in a learning program or get a job. They no longer waited for “check day,” they got jobs or went to school to become qualified for a job. It was amazing to see. People who had been on welfare for years and years, suddenly, under threat of not getting a check, went to work or job training.

Dr. Paul Polak (Out of Poverty, Polak, 2008, Berrett-Koejler Pubs.) declares that: you can’t donate people out of poverty. He further asserts that the best thing we can do for the third world is not to send them boat loads of aid, but to ignite their entrepreneurial spirit. Give a person bread, and he eats today. Give him a rake and seeds, and he can eat for a lifetime. The old adage suggests giving consumable help is not always beneficial. Sometimes it cripples people.

The point being, taxpayer money going to feed those who could be feeding themselves is a drain on the economy because it produces nothing of economic value—nothing that appreciates. We learned in Rich Dad, Poor Dad , (Kiyosaki, 1997, Plata Publishing, LLC) that things are either liabilities or assets. That is, they either appreciate or depreciate. Giving people money for food, which is a good thing when the recipient is unable to work, is a depreciating use of capital. Moral values lead us to feed those who cannot feed themselves. But feeding those who could be feeding themselves is a drain on society’s resources and sometimes lulls the recipient into a life of poverty. It sidelines otherwise able bodied people and siphons off money that could be going to building factories and roads—things that are appreciating assets: things that have value and therefore increase the gross national product (GNP) and that leads to prosperity for all.

When a society actually produces more goods and services of value (increase the Gross National Product), all in society benefit. Investors have more money to invest. More business ventures are undertaken, more people are hired, more product is produced and sold, more second and third tier companies hire more people [General Motors makes the cars in a factory, but someone has to make the tires, someone else transports the tires to General Motors, someone sells insurance to the people who buy the cars, someone builds the warehouses that house the repair parts, and so on], more taxes are paid, there is more money for maintaining the roads and utilities, and on and on it goes. We often simply use the phrase, “All boats lift with the rising tide.”