This page has been archived and commenting is disabled.
How Saving Grows The Economy
Submitted by Dan Sanchez via the Ludwig von Mises Institute,
Back in the 1980s, Irwin Schiff, anti-tax activist, political prisoner, and father of free-market pundit Peter Schiff, wrote a marvelous comic book titled How an Economy Grows and Why It Doesn’t, which teaches economic principles through a light-hearted story.
The comic starts with three islanders — Able, Baker, and Charlie — who live off of fish, which they catch in the sea. They have no tools to aid them, so they must fish with their bare hands. Fish, to the islanders, is a consumers’ good: something that is used to directly pursue their goals (in this case, the goals of satisfying hunger and not starving). But, fish can only be a consumers’ good when it is ready for consumption. The fish do the islanders no good while they are still swimming in the sea. So the islanders must engage in production. They must produce the product of “fish on a plate,” which is, to be exact, the true consumers’ good, and not simply “fish” per se.

To produce “fish on the plate,” the islanders must use productive resources, or factors of production. One factor the islanders must use is their own labor. In this case, their labor is the act of fishing: using their eyes to spot the fish, and their hands to grab them. Another factor they must use is land, or natural resources: in this case, “fish in the sea.” “Fishing labor” + “fish in the sea” = “Fish on the plate.”
Using only their bare hands, the islanders can only produce one fish per day, which is very low productivity.

As Schiff writes, with such low productivity, “This is survival and that’s about all.” It is a state of extreme poverty. The islanders have little time for leisure, or to produce anything else they might want to enjoy. They are also extremely vulnerable. What if they get sick, or break their hand? A single bad week of fishing could mean starvation. Life with such low productivity, is life on the brink.

Like a Disney princess, Able dreams of “something more.” He’s tired of being poor, and wants to somehow improve his living standard. He comes up with the idea of building a net to use to catch fish faster (boost his productivity).
The net is a third kind of factor: a capital good, or produced factor of production. Producing a net also requires factors, including natural materials (land), like sticks and vines, and net-building labor. Building the net would take a whole day.

That would be a whole day that Able wouldn’t be fishing. His labor is scarce; it cannot be dedicated to both fishing and net building at the same time, and so it must be economized: dedicated to one and not the other.
And if Able doesn’t fish, he goes hungry for that day. Building the net would require sacrifice: delaying consumption.
Able must decide between two different production methods. Does he stick to hand fishing, or does he switch to net fishing? He must consider the upsides and downsides of each.
The upside of hand fishing is that it has a short period of production. Able starts production, and then gets to eat later that very same day. The downside is its low productivity, and Able’s resulting chronic state of poverty.
The upside of net fishing is its higher productivity, which is two fish per day according to the comic; but for illustrative purposes, let us change the productivity of net fishing to three fish per day. The downside of net fishing is that it has a longer period of production at first. It takes one day to make the net, and then another day to use it. So, Able would start production, and only get to eat two days later.

Able is at a crossroads. He can either stay mired in primitivism, or he can rise above it. Rising above economic primitivism is often considered simply a matter of technology. However, simply having the idea of, and the know-how for, producing a net, is not an immediate, costless benefit for Able. It would be costless if it were simply a matter of choosing between “1 fish today” and “3 fish today.” Of course more is automatically better than less, other things being equal. But other things are not equal: a difference regarding time is an essential consideration here. It is not simply more vs. less; it is “more and later” vs. “less and sooner.”
So the decision for Able whether to adopt the “net fishing” technology involves a trade-off: an “exchange” he deliberates over in his mind. Will he give up the “less and sooner” yield that comes with hand fishing in exchange for the “more and later” yield that comes with net fishing?
The answer to that depends on Able’s personal time preference, or the premium he places on the immediacy with which he achieves his ends: the importance of “sooner.” The lower someone’s time preference is, the more willing someone will be to delay consumption. And the higher, the less.
For example, as the comic book later indicates, the time preferences of Baker and Charlie are too high for them to make the net. Giving up eating today is too great a sacrifice for them, even if it would mean being able to eat three times as much tomorrow. If net fishing were more productive, that might have sweetened the deal enough; i.e., if the net netted five times as much, they might have been willing to wait. Their time preferences are not infinitely high. But they are not low enough to embark on this particular capital project.
But Able’s time preference is low enough, so he is willing to delay consumption, produce the capital good, and increase his productivity.

Morevoer, the day after his first big net-aided catch, he has enough extra fish to not have to fish all day, because he can subsist on what he has already caught. Instead, he can spend the day creating even more capital goods to raise his productivity even higher. For example, he makes a rake to use to farm carrots. And he can use the additional yield from carrot farming to support even more capital accumulation. As he becomes ever more productive, he can also afford to devote more resources toward leisure and comfort as well.
Thus, Able’s low time preference puts him in the fast track of an ascending spiral: a virtuous “Cycle of Growth.” Saving (delaying consumption) supports more capital goods, which boosts productivity, which creates more to save, and around he goes.

With every lap around this loop, he becomes wealthier, as both his capital stock and living standard increases. And with every lap, he inches ever further away from the brink and toward greater security and peace-of-mind. A bad week of production becomes merely a bummer, and not a catastrophe. This Cycle of Growth, by the way, is the way living standards rise in a complex market economy as well.

But then others on the island start getting their own ideas about what Able should do with his newly abundant resources. One man says, “Divvy up.” This is an example of the envy-based egalitarian ethos that has afflicted peoples throughout history and pre-history, keeping them poor and primitive. As Murray Rothbard wrote:
In fact, the primitive community, far from being happy, harmonious, and idyllic, is much more likely to be ridden by mutual suspicion and envy of the more successful or better favored, an envy so pervasive as to cripple, by the fear of its presence, all personal or general economic development. The German sociologist Helmut Schoeck, in his important recent work on Envy, cites numerous studies of this pervasive crippling effect. Thus the anthropologist Clyde Kluckhohn found among the Navaho the absence of any concept of “personal success” or “personal achievement”; and such success was automatically attributed to exploitation of others, and, therefore, the more prosperous Navaho Indian feels himself under constant social pressure to give his money away. Allan Holmberg found that the Siriono Indian of Bolivia eats alone at night because, if he eats by day, a crowd gathers around him to stare in envious hatred.
If every time someone saves more, he is pressured to relinquish his “excess wealth,” that can only discourage savings. And knocking out savings knocks people off the Cycle of Growth. It also knocks them onto a Cycle of Impoverishment. This is because low savings can lead to capital consumption. “Consuming” capital doesn’t mean “eating the net.” It means that the net eventually wears out with use, and to maintain it requires diverting possibly consumed resources away from consumption and toward repair/replacement. Without sufficient savings, capital goods enter a state of disrepair. The net eventually tears and fish start swimming through it, at which point the fisherman must resort again to low-productivity hand-fishing, and finds himself back on the brink.
Another islander waves a club at Able, and suggests, “How about this?” threatening to plunder Able’s savings. Such brigandage has also kept entire peoples poor throughout history and pre-history. Constant raids by roaming hordes will also discourage savings and break the Cycle of Growth. Sometimes the raiders settle in, and, through propaganda, transform themselves into a “state,” and their plunder into “taxation.” What is particularly devastating to the Cycle of Growth is the kind of state plunder called, “proscription.” In ancient times, when an individual managed to accumulate enough wealth, he often became a tempting one-stop shop for loot, and so the state would find some excuse to imprison or execute him so as to facilitate his total expropriation. This explains the rage for “buried treasure” in times and places where princes were particularly grasping. Of course, modern democracies plunder too, often under the cover of egalitarianism and through “progressive taxation.” The more you save, the more you’re taxed. This too is particularly inimical to the Cycle of Growth.

Then a little bird asks if Able’s penchant for accumulation is “greedy” and bad. “Bad for whom?” responds a wise owl. There are only so many fish Able can eat, and only so many uses for his nets. To maximally benefit from his tremendous productivity, he must offer his products to others in the community in exchange for goods and services. And through exchanges like investments, loans, and wages, non-savers can get access to capital goods that would have otherwise been out of reach. For example, Able rents out his nets and loans out his fish at interest. This enables higher-time-preference islanders like Baker and Charlie to increase their productivity and living standards. And since all exchanges are, by definition, projected by both willing parties to be beneficial, the more exchanges the saver makes, the more he benefits the public.
Savings and capital benefit everyone, not just the saver and capital accumulator. The Cycle of Growth lifts the entire community. And so when egalitarianism and plunder discourage saving, it keeps the entire community down, hurting not only the savers, but everyone who might have exchanged with the savers.
There is nothing “fishy” about savings, capital accumulation, productivity, and peacefully acquired wealth. But to paraphrase an old saying, fish and plundering visitors start stinking very quickly.
As Ludwig von Mises wrote:
Every single performance in this ceaseless pursuit of wealth production is based upon the saving and the preparatory work of earlier generations. We are the lucky heirs of our fathers and forefathers whose saving has accumulated the capital goods with the aid of which we are working today. We favorite children of the age of electricity still derive advantage from the original saving of the primitive fishermen who, in producing the first nets and canoes, devoted a part of their working time to provision for a remoter future. If the sons of these legendary fishermen had worn out these intermediary products — nets and canoes — without replacing them by new ones, they would have consumed capital and the process of saving and capital accumulation would have had to start afresh. We are better off than earlier generations because we are equipped with the capital goods they have accumulated for us.
- 29594 reads
- Printer-friendly version
- Send to friend
- advertisements -


Irwin Schiff is an American hero in an age when most have forgotten what it means to even be American.
first ive heard of him...
good story, though..
His dad is an even bigger American hero.
His dad is in jail for fighting them on taxes. And before you think that he may be crazy, they BANNED his related book from sale or distribution. That is how dangerous he is to them. Look it up.
Also look up the videos of Peter, the son, predicting the coming collapse before it happened in 2007/2008, and how he was snickered and laughed at.
An American, not US subject.
+ 1,000
FREE IRWIN SCHIFF NOW!!!
I got the updated Peter Schiff version of that story.
https://duckduckgo.com/?q=peter+schiff+how+an+economy+grows+and+crashes
The wonderful thing about that story is that if anyone doesn't like the system then they can simply quit their day job and go back to fishing by hand.
Or can they?
Short answer, no.
https://www.youtube.com/watch?v=9p2TcqKgYMU
This story is way too simplistic, what if the islands ecosystem only could sustain a consumption of 3 fishes a day? Then Ables greed will eventually result in no fish for any of the islanders.
No George! You nor anyone else has the right to jerk part of the story's context loose from its hinges and yell, "See here! It's broken - too simplistic!". The ecosystem does not exist apart from the context of human life. It too is a part of reality of this story about every island requiring productive labor to overcome poverty. It's the principle of the right to one's own life, to productivity and the corrolary right to one's own property that this story illustrates.
These principles must apply, whatever the state of the ecosystem in your country, town, or yard, because of scarcity and because values arise only from within each INDIVIDUAL human breast. The value of my life, my thriving (or not), and my property arises from within me (and every ME on this planet). This is where the world starts (or not). This desire to pursue ease and eschew "dis"ease, to pursue your own happiness: This is how the world runs (or not). The atom of the world's ecosystem is the heart beating in your chest, because without your own beating heart there's no ecosystem to worry about is there? Your values won't exist at all, because you will be dead. Dead in this world, means your values cease to exist in this world. The ecosystem is a value and is accounted for in Schiffs Story, because people value eating, leisure, and life.
The fish story is a great place to start but no place to finish.
The fish story is a great plaIce to start but no plaIce to finish.
There, fixed it for you :)
ooooooooooooooooooooooooooooooohhhhhhhhh ... Noooooow I geddit.
I had to look that one up to see what you meant.
:)
(No, I don't go fishing often.)
Garbage in / Garbage out. Period.
Mises is doling out misinformation.
When money as debt, the system is a fraud.
That's the starting point. Savings only means that others have inextinguishable debt and are effectively enslaved to said debt. When the criminal Debt Money Monopoly finances government and politicians then the reality of the debtors is bad and based on fraud.
Quite expressing your ignorance, Mises devotees, and start telling peopel the truth.
If $20 billion is lent to society (the amount plays no role in the fraud, it is the mechanics that reveal the fraud!) @ 5% interest, in one year $21 billion is owed back to me due to double entry bookkeeping adjustments that add a $1 billion liability to your balance sheet and a $1 billion asset to my balance sheet.'
The entire system's balance sheet balances out at $21 billion, but YOU ONLY HAVE $20 BILLION, YOU OWE ME $21 BILLION AND I CONTROL THE $1 BILLION YOU NEED TO PAY ME BACK OR I SEIZE ALL YOUR PHYSICAL COLLATERAL. Oh, and I finance political operatives into power WHO WILL HAND OVER THE GOVERNMENT'S ASSETS TO ME WHEN THE FRAUDULENT DEBT CAN'T BE PAID!
Oh, and I don't a flying fork how much of that $20 billion is "saved" because I control society like the monetary chumps they are - AND THAT INCLUDES YOU, MISES INSTITUTE!
If you don't correct your disinformation, rational people will start to conclude that the Rockefeller financing has turned you into controlled opposition or, in the very best scenario, a bunch fo useful idiots.
Sorry to be harsh, but you are running interference for the Rosetta Stone, the Skeleton Key, that unlocks the fraud and criminality of the Debt Money Monopoly and the Debt Money Monopoly did finance you... Is there a connection?
In that primitive society...FISH WAS THE CURRENCY. It was NOT DEBT BASED but had a corresponding LABOR associated with it. It was backed by a COMMODITY.
If you believe that Irving or Peter Schiff considers the current Fiat Currency Debt Based system as a valid system then it is you who are either deluded....or outright ignorant.
EuroPacific Capital is a GOLD BANK.
Nice try at the Strawman argument. But it only fails here.
Another part missing from the story is Able's first two failed attempts at building a net. At the end of the day he had to beg Baker and Charlie to give him a third of a fish each so he wouldn't completely starve. Took Baker and Charlie a while to get over the hunger from only eating two thirds of a fish on those days.
Mind you, as a whole they did a lot better than Donny, Egbert and Freddy, who lived on a similar island a few hundred miles away. Donny, Egbert and Freddy were all entrepreneurial minded and all three of them took the same day off to try and build their own nets. Unfortunately, all three nets were failures ...
Graham, Harry and Isaac didn't have enough sticks or reeds on their island. If only two of them had have given up then they might have been able to build one good, working net ...
Actually, there was no straw man attempt.
I get your position but, IMHO, it is a tree position that misses the entire forest.
Rather than point out the abject criminality of the Debt Money Tyrants and using 5th grade math to factually prove the fraud beyond any and all doubt, the establishment Mises crowd provides cover for the criminals running this system.
Where is the cartoon proving that debt based money is a fraud - you know, THE REALITY WE LIVE UNDER?
There is no way for the cartoon's Skittle chitting unicorn fantasy to come true as long as the criminals running the current system are in POWER.
Where is this article that exposes the Debt Money Tyrants as criminals and why are we talking about fantasy instead of dealing with reality again?
The concept is so primitive it is fishy. Only excess production by extra labor in the beginning can produce savings. Able spends more time fishing to catch two fish so that he can eat the next day. Able then invests his labor, which is freed from fishing for a day by the extra catch yesterday, into building his fishing net. Able would not abandon hand fishing and go hungry for over a day to build his net despite what the story says. Capital production occurs when a surplus is invested wisely. A surplus is the excess production above immediate needs of consumption. Savings are the fore going of consumption of this extra production....economics 101. so nice try but a fail.
Just read the story and accept the conclusion given - Able ends up owning everything and lending fish to everyone. Sounds to me like the fish story came true and we are all living it today.
Why is Able's surname not given?
Is it "SQUID"???
Rothchild? Bildeberg? Rockefeller? ...
Fish is a finite resource, and if you overconsume it there will eventually be nothing left. Basically, no resources are infinite in any kind of society, but this romantic little story does not seem to account for that, which essentially means it is oversimplified.
Right, because the guy who is willing to self sacrifice to test his net invention will never ever think of farming tilapia.
Your type always seems to think that there is enough for hydroponic medicine... funny that
.
So most analogies don't bare close examination.
The fish story is a great place to start and a great place to refer back to once everyone has gone off the rails again. But it is no excuse for chucking your brain in the closet - as so many people do when presented with any ideology with a good story. Hence my earlier reference - So everyone is free to quit the system and go back to fishing by hand if they would like to? This is a most basic assumption presented in the fish story and needs to be addressed, as is my later question about access to fresh water and fertile land for those who DO prefer to go off the grid.*
I like the fish story but it is by no means perfect. As with all ideologies, it can and will be used to beat you about the head if you choose to turn your brain off - not because the basic ideology is wrong but because either:
the basic assumptions are wrong;
or simple, downright lying;
or lies through ommission.
For example, Able had to forgo a day of fishing in order to build his net. These days it is possible to simply borrow against someone else's sacrifice so the so-called risk-takers aren't the noble Able - types. Some prick out there will equate Able to a corporate raider with no regard for the differences. Some will point to this as a failure of the fish story, others will use it to justify corporate raiders. Both are wrong. The fish story was right. But equating one who sacrifices his own savings with one with access to other people's savings is a lie in the underlying assumptions.
Read the story. Appreciate it for what it is, and then look how far we have strayed from that ideal, and look at how much of that ideal could never have happened in the first place anyway. The fish story itself is not bad. The idiots that come later with their agenda, their propaganda, their lies, and their lies through ommission - they are the problem, and so is anyone who thinks they no longer need to use their brain because someone else wrote a fish story.
( * Some ZHers like to promote the idea of going off the grid but the first problem is always cheap, fertile land. Yes, you can get cheap land in the middle of nowhere - now it is just a matter of surviving until the land can provide a return. Great for those who can make it happen, but there is a reason that so few get that far.)
The story is a very good metaphor of capitalism, but then the owl comes in and basically claims that greed is not a problem because it will benefit us all. This is where things go horribly wrong, this is where things are being terribly oversimplified.
Promoting and rewarding greed will always result in overconsumption and cronyism, thus the entire point of the story becomes plain wrong.
The fundamental problem right now is that to have freedom and work in the original model in which we evolved (first as a species, then as a society) there needs to be lots of room. Any 5 year old will tell you if you have to play in a room with too many kids there will be fights.
So the economy, and the species function best when there is growth, and we haven't figured out how to manage what happens when the place is full. The folks who have managed to get in charge of most countries have decided on some solutions, but you're not going to like it...
Too many kids ... the room is too small ... there will be fights.
Fucking excellent summation there BobPaulson. +1000 000
I call BS. I heard Gordon Gecko say that greed was good. Did you miss the movie?
George, did you not read the story. By building the net it freed up time to then plant crops. Therefore, his savings and investment allowed for the consumption in the future of something other than fish. so the island no longer needs 3 fish a day it needs less. if you freed your mind from your socialist views you would have seen that.
This is what happens when science and logic gets in the way of ideological or religious believes. People are too proud to even consider the possibility that they are wrong, so instead of questioning their own believes they find all kinds of cheap excuses to deny or ignore science and logic.
Do you really not see that whatever he choose to do during the time he has freed up is irrelevant? The problem is that there exists no mechanisms that prevents him from over consuming if he wants to. It doesn't matter if the limit of this imaginary ecosystem is 3 or 1000000 fishes, sooner or later he will reach this limit, or the limit of any other resource, and then; what mechanism is there to guarantee that overconsumption won't happen? None!
George, are you being genuine, or just trying to play Devil's Advocate? The story was about economics, not some Media driven sustainability BS. So, in sticking to the story-line, if the Island did not sustain 3 fish per day, maybe the next item Able would build would be a canoe?
Also, would we agree that Greed is somewhat synonymous with selfishness? These 2 words have been severely bastardized in recent years. Now the big leap, is selfishness somewhat defined as a desire to do better for one's self?
One can be "selfish" while still staying true to their morals, and staying true to a "sustainable model" as well. People with common sense won't typically destroy what feeds/benefits them. (agreed some Corporations will, and I disagree w/SCOTUS that Corp. are people).
Back to selfishness though, without some degree of it, mankind would not exist because without the drive, we would all just sit on our asses and die.
PS You should see youtube of George Carlin Re; "Mother Earth". If she gets ready, she'll shake us off like a bunch of fleas.
There are hundreds upon hundreds of ways to alter the equation of scarcity. Technology to access previously unavailable resources, technology that enable more to be done with the same resources, technology to convert previously unusable resources to useful ones. The idea that resources are scarce is a fine theory but has been proven wrong headed time and again by those focused on providing the wants needs and desires of consumers found new ways to serve those needs that those focused on scarcity never imagined.
Absolutely. Mother Nature also rolls in cycles and makes corrections. Let's say that commercial fishermen overfish tuna. Well, since they are fishing for a profit, and the overhead is $thousands per day, when scarcity causes financial losses, the pressure will be reduced, and the tuna will repopulate.
(except, maybe GeorgeWKush is such a great fisherman, that he can harvest the last mating pair)
Sure thing, in the utopic Ayn-rand-capitalism-fantasy-land all problems created by "growth", the self regulating markets will solve by further increasing production and developing new technologies. In the real world however, you will run into one of these
http://en.wikipedia.org/wiki/Progress_trap
You just presented just another cheap and faulty excuse in your quest to deny that societies in which growth is regulated by the same people who benefit from it (Guys like Able), ultimately will fail just because of their lacking regulations.
GeorgeWKush says:
People are too proud to even consider the possibility that they are wrong
That applies in spades to you, George.
Doubled and squared.
pound the vix:
Funny thing is, with all our technology, we still haven't freed up any time. Those who still work are still working harder than ever.
Also, If you still wanted fish you could get them faster and wouldn't have to use up as many of your valuable baby sitting coupons.
So fish don't reproduce, right George? Finite resources are non-renewable, fish can be fished to extinction, but if left be for a time will come back in greater numbers, not so for oil, natural gas, or coal. At least not in our or 1000's of future generations lifetimes.
GeorgeWKush says:
Fish is a finite resource, and if you overconsume it there will eventually be nothing left.
Yo, Dopey! Fish is a metaphor.
Try to get up to speed...
3 people on the island and its already time for a department of fisheries.
I think the important frame here is where the Owl comes in and speaks about greed.
I think the important frame here is where the Owl comes in and speaks about greed. does not go deep enough.
We see many greedy commentators here. Instant reward/Amazon drone satisfy my greed people. People who bitch due to not having a quick path to knowledge and resent anyone who does (have insider info; they would likely not bitch if they were privy). People who blame a website for not paving their "brokerage" accounts into wealth without effort. c'mon. People who say the "Tylers" are wrong? Shite. Blame is a good game until you look into the mirror.
So many who blame that nobody is giving them the easy path to what they envy. And there are countless people here who would shut up instantly for an inside tip
And the trolls. Minimum wage, maximum garbage.
Then you have the wise owl who brings up greed. Some call it greed (as applied to Wall St.) and some call it "entitlement" when it comes to segments of society ....flip side of the distorted mirror.
We are having an argument that has been cultivated to set normal working people far apart. Racial srtife, religious strife, political strife, immigration, culture it is is divide. Division is the aim.
Saw a program with 2 types of apes. One species attacked for food and isolated when eating alone. The other species felt a need to share.
I have always had a gut reaction/soul reaction around selfishness/greed..especially when disguised as charm. Somewhere this touchy feely thing has to be debunked; along with Wall St, Both are not natural to the greater world. Welfare and Wall St, much the same. Hate one and hate the other.
I have no respect for anyone who is a leech. I have no respct for usary either.
Let's start the discussion from the point of view of a wise owl.
These ritualistic based folks, if you pay any attention will use next week.
Hope I do not hit a copyright issue"
"Sunday's energy begins a window when we need to be vigilant to the ways of the minions of the new (unnatural) world order. The Sun will be in aspect to the Eris Point (the degree of Eris when it was discovered and the favored degree for forwarding the Illuminati control agenda) and then the planet Eris. It's ritualistic energy. The false flag attack via viruses has already begun, but there is heightened potential for more to be added to the mix, so wise owls are aware. Banking is always highlighted with Eris."
"It is a task for the greatest spiritual warriors to hold the line of light while being simultaneously and intimately aware of the ugliness that is being undertaken. As I said in the audio recording back at the beginning of the lunar, this is not a drill. This is real. As change rapidly unfolds in our world, we reinforce our grounded connection with Gaia Sophia. It is with her that we maintain sanity when dark forces conspire to destroy life. Turn to nature often for reinforcement and the reminder of all the good things about life. There are good things about life now, but, in the future, there will be many, many more. This is where wise owls are aimed. We deftly respond to transfer this to the future."
http://www.oraclereport.com/
Just another point of view to read. I am of the opinion, as are a few others, that symbols and things play a part in the actions being taken.
Jut saying.
SilverFish: All you need is some fertile land and water ...
Our desert dry lakes only yield microscopic shrimp. I'd need a much tighter net, and a much bigger dry lake.
4000 Ebola deaths, US troops in Liberia, Sierra Leone burial teams, NYC plane cleaners strike
http://wtfrly.com/2014/10/10/4000-ebola-deaths-us-troops-liberia-sierra-...
Exactly, and the left has no clue what greed is.
Greed is NOT keeping the fruit of you own labor. Greed IS wanting the fruit of another's labor to be taken by force and given to whom you choose.
Double plus when the Gub puts its stamp upon it...
The left have an excellent idea of what greed is. That is why many of them work on Wall Street or are in government unions that support the people who write their contracts. They are expert at taking from others...without you having a choice! Property taxes and government bonds....Wall Street gets a big share and government unions get the rest!
That is basically the motto of the progressive/ fascist (hijacked democrat) party. Play on the greed of the free shit army.
yep look that youtube up he absolutely nailed it and he is nailing this, but the fed skews the timing with moral hazzard.
The video is a slam dunk giggler.
loved this story vs throw a brick thru a window and create jobs.
Unbelievable bunch of idiots that bought that story.
Peter Schiff had an online radio show for four years, having ended Aug 31 of this year. He has to run his businesses. He now posts a two hour, weekly broadcast, free to download and listen:
http://schiffradio.com/
If you're not familiar with Franklin Sanders and his Tax Battle, here is a link. He's definately a man of integrity. He earned the title "The Most Dangerous Man In the Mid-South". Here' the link.
http://the-moneychanger.com/answers/the_most_dangerous_man_in_the_mid_south
interesting! i haven't read about franklin sanders' plight before, but i do know that he's the proprietor of goldprice.org (and silverprice.org, etc...)
He's a good ole Southern Gentleman. "WOW" is the typical comment I hear anytime somebody reads that article.
He basically beat them in the case, but they Could Not allow it, or the whole house of cards would've come down (or the King has no clothes) which ever you prefer.
I never miss Franklin's daily gold and silver market recaps. He is a very entertaining writer and really knows his stuff. He's been a terrific teacher to me over the years.
"lso look up the videos of Peter, the son, predicting the coming collapse before it happened in 2007/2008, and how he was snickered and laughed at."
Fucking hero worship. Peter, the son. Seriously? First, he's a douche who lives in CT. Second, he's lost most of his clients' money in the last few years. He was right once. He's been wrong to the point of disaster since. But of course he takes a percentage so he's okay. Give him a pass, though.
peter schiff isn't a hero, he's just an ordinary guy, who sees what's going on in the world around him, and isn't afraid to speak out about the situation.
around the time of the 2008 collapse, schiff is the first one i found who had a reasonable explanantion as to what was going on, which led me to an interest in finance, gold and silver, etc.
i notice that you are completely unable to offer a valid criticism of his message, so instead you impotently flail with your ad-hominem attacks ("douche who lives in CT"). really? so if someone lives in a state you don't like, that makes his message invalid?
why don't you actually try to challenge his message, debate the content of what he has to say - is it because you know your own statist position is weak and untenable so your only hope is to engage in character assassination?
i don't know what sort of childhood trauma turned you into the weak-minded, liberty-hating, ayn rand-obsessed troll you've become, LTER, but, therapy does help some people get over themselves. you might want to try it.
Listen.
Americans. Lol.
I often wonder why Peter doesn't associate himself with his father.
Because Peter is a profiteer who uses his dad's tax protest legacy to justify his exteme douche behavior while paying the low taxes of the .1% (capital gains) while complaining that "we" are all taxed too much and that the problem is poor people. He loves Rand, like all of these fuckers.
He's right. We are taxed too much
He lives in luxury and pays a very low tax rate. His clients lost their ass while he built wealth. Who's the sucker.
so, you have a problem with him "living in luxury"?
your criticism is that you're envious of him, and you wish that you were as rich as he was?
and yes, people do lose money in the market sometimes. there is risk in any endeavor. are you trying to suggest fraud was involved? if so, i suggest you present your evidence of such a claim.
I took a beating with his firm. He really isn't much different from any of the rest. Taking his cut, win or lose.
That's right. It's called providing services. If you don't want to participate in knowing what your money could be doing, then you should just put your money in a shoe where it's safe.
Blaming the broker because you're too fucking lazy to make your own decisions means you deserve any negative outcomes.
absolutely correct.
whenever someone is taxed, they are taxed too much.
there is no such thing as just the right amount of theft, unless that amount is zero.
Income tax takes a quarter of my wages. GST takes ~ 10% of the remainder. Other taxes take more again.
But real estate takes 100% of my wages. Oh hang on, no it doesn't. I just do without.
Better those fuckers than the ones from GOV INC. who like to tell everybody and his dog that "we are here to help you with your problems, and to teach you how to live your life... and you better like it, or we'll throw you sorry as in jail". By the way, the dead old woman is gaining on you...
"loves Rand"? No thanks, not into necromancy.
You sound like a guy who is so used to having people piss in his cherrios that you'll piss in them yourself if nobody else does.
Just to make sure the pattern continues. BTW, John Galt says fuck off.
Irwin Schiff is Peter Schiff's dad. He is about age 90 and is in prison for tax evasion. I have met him and essentially what Irwin is is a Paul Revere type patriot who put his money where his mouth is. Unfortunately the sheeple he tired to educate through his speeches and books are too timid to stand up to Big Brother - so far. Irwin is an expert on the constitution and like Mark Levin, he sees we are in a post constitutional era. And we are paying the price for that foolishness with loss of liberty, economic and otherwise.
"The islanders have little time for leisure, or to produce anything else they might want to enjoy."
Why didn't they go fishing? I hear it's fun.
It is also inaccurate. Historically, tribal fisherman worked an average of 12 hours per week. Compare to 40 hour week average for European peasants or 60 hour weeks for Chinese rice farmers.
That is after they made spears, nets, hooks and such.
The spears were useful to take away the other guy's fish and to keep him from fishing in your fishing hole unless he was in your employ.
Now the Fed creates fish out of thin air and charges the people for a fish plus interest.
Now though, "Monetary Policy" is like fishing in that the purpose of fishing is not to cast and feed fish any more than the purpose of "printing money" is to increase productive work and create wealth.
The purpose of fishing is to catch and the purpose of counterfeiting is to steal.
Monetary policy: Cut each fish in half and call it a whole fish for purposes of trading. Keep halving until the natives catch on and either start cutting their trade items in half or stop trading.
No, what the fed does is print a bunch of coupons that say: "Good for One (1) Fish," and hand them out to their friends.
The problem, of course, is that there are far more coupons than fish...
Fishy Reserve Notes
Backed by the full faith and credit of Able, Baker, and Charlie.
Printed on banana leaves.
Eventually used to cook fish over.
Yes! :)
And tossing all metaphors aside, we can augment the article's point if we say that just as "low savings can lead to capital consumption" then "monetary policy" IS capital consumption.
Creepy A. Cracker:
Peter Schiff addresses all that kind of crap in the updated version of this book.
Now the Fed creates fish out of thin air and "their tribe" charges people for a fish plus interest.
FIFY
No it does not because it's too obviousl that you can not eat fish out of thin air. The illlusion to get something for real for money out of thin air is none. Assume you wil suddenly have 1 billion Dollars on your account. You surely have every chance to buy goods for it. But still you do not have done anything about it. You have not saved it's just "that you are rich" without any effort. And this is the advantage for the banks and the banks ot finance the never ending appeteite for money of the states. And so the states do everything to not have the banks take responsibility for what they do. And this is called fractional reserve. So no your comparisin does not hit even near.
Fish? Nah....the Fed creates Soylent Green for the masses...
According to EKM the "shadow banksters" supercede the Fed.
Who owns the Fed?
Then the other half of the story is where poverty comes from.
If a population is growing by, say 3%, a year, then the economy needs to save and invest enough to boost current production by about 3% a year to keep everyone in the future at the same standard of living and prices remaining about the same.
If a population is growing savings, investment and production faster than population growth, that economy will see increasing standards of living and generally DECLINING prices.
If the banksters and the government syndicate are robbing people's wealth via "printing" and taxes, then the economy will save, invest and expand production at less than population growth. Over time such an economy will see a declining standard of living and generally rising prices.
As it is said: "Taxes destroy." I would add: "'Printing' is theft."
Note: The banksters' "printing" robs, steals, an economy's productivity increases FIRST, before it shows up as increased prices--they steal both.
And that forces them to invest in capital goods, such as bombs and a militarized police force to protect them from us. Job creation.
Senator Warren and Obama's theory is that Able didn't build it; the community did.
And this is precisely why it is important to differentiate between rich industrialists (who manufacture and produce capital goods) from rich banksters/financiers/politicians (who produce nothing, but leach off the productivity of others).
The former are necessary to the proper operation of capitalism, while the latter should be taken out and summarily executed...
Another book for 'newbies' on this subject....Atlas Shrugged.
I'm finally getting around to read this. Just started it. First impression, wow, was the world always this fucked up? How could Ayn Rand have invisioned the world being so screwed up like it is today? Oh, I guess its always been like that despite us thinking everything was awesome 70 years ago. What? As if there ever existed a private railroad that was built from private money. Wasn't it all built with public money and corporate bail-outs from the very beginning of railroads? I hope that fact doesn't interfere with my enjoyment of the rest of the story or any lessons that may be learned.
Now all the nets are stamped with Made In China. They break easily and some of the parts contain lead. Sigh....
Still have "The Great Income Tax Hoax" on my bookshelf. Reading it decades ago was a confirmation of something I knew in my heart from the first time I filled out a 1040 form - "something isn't right here".
God Bless Irwin Schiff and watch over him.
Didn't mention the part where everyone built nets for themselves from Able's design, and they all went fishing at once, all caught more fish than they could eat or save, destroyed the reef in the process, let the excess fish rot creating pestilence on the island, and when the they could not longer find any fish to eat from around the island because the reef was destroyed, they died of starvation.
Just thought I'd point that out.
Yep-
This examples works if the fish remain plentiful and there aren't too many people hunting for too few fish.
"Tradegy of the Commons" comes to mind.
You forgot the last chapter though. When they came to the realization that they were going to starve to death, they called Dominos and had a pizza delivered within 30 minutes.
Oh, dear... No hot women types are on the island to bring about new workers.
And they laughed at me when I proudly ate FishSticks for lunch. School Bullies can be cruel.
Best article I've read in a long time.
I'm pretty sure that catching fish around the Fukushima spillway is a big NO NO. Just sayin...
That's where I get some of my biggest catches
... and most interesting-looking / tasting ?
I really like this comment section. Smart comments from smart articulate people.
This is the Z/H I'm used to.
Booo... Yahhh.... Just kidding
I'm not a very sophisticated person. I'm now retired - no pension or such - but we were savers for over 30 years - no kids - both worked lots of hours - no debt - no mortgages - lots of luck - good paying jobs - some years very good - never really lost any money in the market - principally had the money in money market before things went south.
I remember years when the monthly interest on our money market accounts was at least equal to my monthly paycheck.
Is there a simple answer to why that is not true today ? Did someone (banks) need our money more back then ? Is this all just a way to help fund the US debt cheaply ? What has to happen to raise interest rates - simply inflation ?
-
Here's a link to the book:
http://themisescircle.org/blog/2012/11/06/how-an-economy-grows-and-why-i...
fuck that! that's too much like work. printing money is easier and much more efficient. to the fiat god, may he rule forever!........so i don't have to work for a living. that would be a travesty.
You're suggesting we deny a certain amount of immediate consumption in order to save for an uncertain future and put ourselves in the best position to weather any unexpected storms?
YOU MONSTER!!!! Calling Dr. Krugman, calling Dr. Krugman, we have a sociopath in our midst!
I knew of Irwin, that he was a tax protester, that he did time for same, and that he was Peter's dad. I did not know that he wrote a comic book, though. Did he illustrate it as well? Mighty impressive, in either case.
Thing is, Able's productivity improvements lose value when resources (in this example, fish) are near depletion.
I hope I'm wrong, but the human race seems much like a bacteria in a petri dish, to me. It grows until it has consumed all available foodstock, and fairly quickly dies. Our planet is quite different than a petri dish in that she is alive and constantly at work. However, she really can't afford a burden that keeps growing exponentially. As many have observed, nature always bats last.
Am I saying this die-off is imminent? No. Is it inevitable, you bet!
Thanks for adding something I actually was not aware of to my data bank, Mr. Sanchez!
Be of good cheer, acetinker. The universe is a large place.
You've hit on the point I struggle most with as a libertarian. There really is a commons, and we need to live in such a way as we don't deplete it for ourselves or for future generations.
czar, this is for both you and OC Sure, it is a parable-
http://renewablewealth.com/the-parable-of-the-mexican-fisherman/
Why would I go around my fist to get back to my thumb?
Thanks for the link, acetinker. I read the parable and like it. To answer your question of why would one would choose an adventure or engage in a purposeful endeavor if the final arrival were to be so much similar to the initial departure, it has to do with the journey itself with respect to all the things that happen to you along the way.
In keeping with the theme of the article itself, if the fisherman did expand the business then he could increase savings and provide the means for an abundant life not just for himself but his loved ones specifically and the civilization generally.
To say that the businessowner "ends up" where he started and therefore would be wasting his precious time is not to see all of the other hands that are touched, positively, along the way as the result of the efficacious use of that time.
It is a clever parable, but ultimately seems to serve the discrediting of the beneficent nature of business and how the expansion of productive work leads to savings which can than be invested into more productive work which then results in exponential benefits.
I've stated this same concept in so many different contexts but the first principle is always fundamental and that is this:
There is good investment banking and there is bad investment banking where the former is funded be the facilitation of money and the later is funded by the facilitation of counterfeit and knowing the difference between the two is clearly defined here: http://ocsure.blogspot.com/2014/05/money-or-counterfeit.html
As in law, it all boils down to intent. Far too many investment bankers only intend to make themselves wealthy, they don't care the resources they waste in their grand schemes, only that their wallets get fatter.
This, I think is the gist of the parable. Do some of the bankers' minions benefit from these schemes? Oh yes.
Is making some asshole's wallet a lot fatter so yours can get a 'little bump" a good long range plan? Fuck no!
The road to hell is paved with good intentions.
Enjoy your hell.
Let me make sure I understand you. Are you saying I should bow down before my masters (the investment bankers)? Or, are you saying I should enjoy my path while doing as little as possible to support those fucking leeches?
99% of the world's problems are caused by the tiny percentage of 'do-gooders' who are so certain that they know what's best for everyone. The 'do-gooders' are probably less than 10% but they do irreparable harm, because they are supported by the .01%, who, whether they know it or not, own and control them via mass media.
I'm gonna make a wild guess, that you are one of the 'do-gooders'- That is, those 'educated' souls who by virtue of superior intellect and tutelage are obviously superior to those around them and therefore qualified to decide what's 'best'.
Key-rist, Tom! As far as I know, you are not a member of the 'elite', you just think you are.
You will be among the first kicked to the curb unless you actively begin to try to forget that which was taught you.
I appreciate your recent concern re: my impending dementia.
Can you appreciate the other side of the coin?
Right. Just because you are libertarian, that does not absolve you from being a responsible citizen. That is the essential difference between libertarianism and anarcho-capitalism. The former precludes the right to freely degrade the commons without obligation while the latter does not (and boils down to "every man for himself").
But as a libertarian in the modern world if you borrow today and take from the future you deplete the future.
The crisis is the future has been so depleted by excessive taking over decades and having consumed all we took no way to give it back to the future.
A scientist researched the prediction of the Club of Rome, hated by so many here on ZH. Turned out the predictions are still on track. We are heading to a resource depleted world. Systematic collapse is still on the horizon.
It is still the same baloney today as it was then. All these Malthusian resource-based catastrophe scenarios are simply nonsense. The far greater danger is that we will lose what is left of the free market economy for political reasons.
Before you know it, we Romans will run out of salt here in our mines. What then?
"Indeed, a major source of objection to a free economy is precisely that... it gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself."
Milton Friedman
It is impossible to find good cartoons any more with Satan, the Tree of Life, an Owl and a Sukkot all in one frame
You guys wouldn't be pulling a fast one on everyone here and secretly celebrating the feast of tabernacles without telling anyone? Why that would be downright underhandedly evil
I may have read this fictional story before. Is the sequel about the evil Phoenician seamen from planet Z arriving on the island crucifying the fisher boy and enslaving everyone else. Then force the rest of the islanders to switch from harvesting fish to mining gold to save their planet?
Shalom bitches
Wait, what? I thought breaking windows grew the economy?
you make your fishnets out of glass so they have to be replaced all the time. that grows the economy.
too bad this comic doesn't even come close to describing how the economy of tribal people actually operates. just about every other bit of history has been revised, so why not?
It is neither a comic about 'tribal economies' nor about 'history'. It merely explains how economic growth works.
you start with a tortured metaphor you aren't going to get very far
Balance is important and like so many things in life when it comes to economic policy it is very important to balance the markets reward when it comes to savings and debt. Savings plays an important role in the economy and has been shortchanged, this will come back to haunt us.
The idea of being frugal and living within our means has not been given due credit, living by increasing debt is far too acceptable. When we find it necessary to discuss savings we are back to basics and it is a sign we have strayed far off course in our economic policy. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/09/savings-and-role-it-plays-in-econ...
An American hero.
You keep capitalizing "Cycle of Growth"...like it's a religious notion or something...
Gives me the creeps.
What about Chapter Two, where the biggest decide to Tax him and others out of their savings . Giving this savings to the leader and his minions?
Really liked this comic.
unfornately real life ain't as happy as the comic.
in reality the other 2 guys will always overwhlem Able and take over his produce and make him a slave, some will use the excuse of "divvy everything up for the greater good", and we call them communist.
others will beat Able down with brute force, take over his stuff, then loan Able's produce back to him at interest, and call it all for the good of the state.
or
Able will grow up to realise the joy of lending things to others and charging them interest on stuff, so he goes out with a club and becomes a looter, he secures every other resources available in the free world that he didn't produce with brute force and then charge compound interest lending everything to other guys, slowly turning the others into his slaves through debt whilst enforcing his position with paid goons with clubs, and our enterprising little Able becomes a banker.
Schiff père missed at least one trick that able could have resorted to (if he was unscrupulous); he could have prevented others from copying his 'invention' by claiming it was his intellectual property... then he could have licensed net production to the highest bidder.
Nice comic, but it over-simplifies more than is pedagogically necessary, and misses some points badly enough to jar on the mind of this former economics/econometrics/quantFi/FinEng tutor.
For example, Able's willingness to forego 1 fish for a day does not depend solely on his time preference (or discount factor): it depends on his time preference as it affects the time path of utility derived from the unknown (but probably higher) level of consumption that may be available in perpetuity if his invention works. So he is solving (or attempting to solve) an infinite-horizon optimisation problem in the presence of considerable uncertainty (not just the uncertainty of future values of U(c; tastes) where c is expected consumption of fish per period... but also the uncertainty of future tastes).
And if returns to fishing are a random walk, he is gonna need to learn stochastic calculus. I can srsly help him with that.
The first part of the islander story illustrates why Victorians were brought up to always save up for things rather than borrow. Not only was it better for them in the long run individually and prevented the financial sector turning parasitic it also generated a ton of available investment capital.
Ponder this on the Victorian age :
It is not by deferring consumption that inheritors obtain their wealth. As Marx put it, it is absurd to view the Rothschilds as growing so rich simply by being Europe’s most “abstinent” consumers. And on the macroeconomic level, this individualistic “life-cycle theory" of interest ignores the fact that the economy is an overall system whose volume of debt grows exponentially from one generation to the next as savings accrue and are augmented by new electronic bank credit – extracting interest from debtors.
Banking Credit, lifeblood of the banking oligarchy, lives off exploiting the "savings" of the thrifty to generate its own bubbles, source of its recurrent power...So thrift feeds the beast in a banksta run environment; aka today's real world.
Aladdin's Lamp. Sinbad's boat. Scherazade's smile. Ali Baba's cave.
They all show that thrift and innovation are levers of human wisdom.
Comics culture began with the ancient fables. How about the Greeks and their fables and 12 labours.
But...Capitalism has to be a means not an end. And DAT is where all the problems begin.
We leave the Island society and enter the urban faceless and "soul-less" environment of modern life. Its every man for himself, until people realise they have to find common ground other than simple supply and demand.
We leave the comic world to enter the world of power politics. And there, in this real world, the individual realises that collective living puts another constraint on the individual which is : the sum of individual interests does not necessarily define what is collective good. As the individual interests if maximised from the individual's perspective always lead to strife and destructive tensions in society.
Perfect markets as arbitrator of individual interests just don't function. They end up in dominant position and consequent power plays of corruption. Whence the need for laws and a uniting Constitution that defines individual rights but also collective responsibilities. The trade off between the two is called "GOOD Goverance" principles of society. And implementation of this good governance requires REGULATION of society based on what is COMMON GOOD; aka the ethics of society have to be reconciled with the innovative power of the individual.
Innovation and Ethics stay the two levers of political constructs : The accelerator and the brake that decide how to steer the community car (which is not just the sum of individual cars).
Von Mises love the comic world and so do I. But it has its limits, just like Gold does.
And Anarcho-capitalism, aka the island model, is just a Robinson Crusoe dream, not reality.
I must have missed the part where after the sacrifice is made, the net is built and it is proven to work, Baker and Charlie confront Able and tell him "you didn't build that" and take all his fish from him by force.
That would be the guy with the club.
Today he carries a golf club.
What force was used? Was it the force of the local homeowners association telling him he can't build nets in the neighborhood and therefore all his fish caught with it must be surrendered as contraband? Was it the force of 20th century gangsters telling him 'that's a nice bunch of fish you got there - be a shame if a mob of cats showed up. For a small fee, I can make sure that doesn't happen'?
Or was it the force of global warming heating the fish and making them go bad?
It all works in comic books. In real life, our savings are siphoned off through taxation, inflation and zirp policy,or if we invest in stocks our savings are siphoned through taxation, inflation, zirp policy and greedy and stupid corporate officers and government regulation and cronyism.
An American tourist was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.
Inside the small boat were several large yellowfin tuna. The tourist complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The Mexican replied, "Only a little while."
The tourist then asked, "Why didn't you stay out longer and catch more fish?"
The Mexican said, "With this I have more than enough to support my family's needs."
The tourist then asked, "But what do you do with the rest of your time?"
The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."
The tourist scoffed, " I can help you. You should spend more time fishing; and with the proceeds, buy a bigger boat: With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor; eventually opening your own cannery. You would control the product, processing and distribution. You could leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York where you could run your ever-expanding enterprise."
The Mexican fisherman asked, "But, how long will this all take?"
The tourist replied, "15 to 20 years."
"But what then?" asked the Mexican.
The tourist laughed and said, "That's the best part. When the time is right you would sell your company stock to the public and become very rich, you would make millions."
"Millions?...Then what?"
The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."
The best way to get rich in Mexico is simple: get a monopoly, ask Carlos Slim
is there a chapter where Charlie forms a union demanding more vacation time, a shorter work day and more fish per day, plus free fish when he retires? And then a chapter where Charlie's son can't make ends meet trying to catch enough fish for himself, plus his father, and for all the people who "can't find jobs fishing" and are given free fish coupons by the local government. So Charlie's son says screw this and moves his fishing to a different island.
If I were Able, I would be writing Fish Derivatives, leveraged up hundreds of times as many fish as ever existed. Sell them to the other chumps and tell them it will fund their retirement.
Bloody Excellent +1,000
Now that is real capitalism-something we haven't seen for many years in the US.
Now that is real capitalism-something we haven't seen for many years in the US.
Because of low interest rates we are living in the one-fish-per-day economy rather than a who-knows-how-many-fish-per-day economy.
Baker and Charlie end up getting married, pass a ban on fishing to fight global warming, and invite friends from another island over who happen to have EBOLA and they all fucking die.
Here, from north Spain, I can tell you:
I wish we in these latitudes had a compatriot like Irwin Schiff to remember and clarify what to do when things are confusing.
Socialism is getting ahead all around the world.
Don't forget your elders.