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Foundation for Economic Growth,
P.O. Box 10-282,
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Professor Thyme - 850AD
By Phil Scott
Nov 20, 2010, 15:20

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Professor Thyme's topic for the day was designed to help his beginning students understand the basics of economics.

"Economics," he said, "is the study of humans in action. We see all around us that people are busy satisfying their daily needs in many different ways and that is what we study."

The students nodded to themselves. They understood the basic principles, particularly the theory that if everyone just satisfies their own needs (within the bounds of the laws of property*) then the consequence was the whole of society had its needs met.

They understood further that because of the theory of specialisation some people would become better at certain jobs than others and would be able to generate money surplus to their normal living requirements.

This money was in the form of gold and silver coins and represented their extra efforts as wealth stored for future use. This was called capital and could be used to expand their businesses and thus generate more wealth.

All this the students knew from their earlier studies and as they thought about their villages and towns they could see indeed how these concepts were the basis for their whole civilisation.

"All this," said Professor Thyme, "is dependent on having agreed property laws where everything is owned by someone and everyone's possessions cannot be arbitrarily removed from them. Theft is viewed very seriously and the victim must be compensated by the thief. All our justice and arbitration system is based on this premise."

"However, we are not here to discuss the intimate details of justice, but of economics. If you consider the history of our community, now numbering some one million souls," he continued, "you can observe that all our economic action has developed without coercion. People have been free to follow their own desires and work at what they felt they enjoyed doing the most. If they wanted to work hard and make extra money then they could become wealthy if they saved the money. People worked at creating what other people were prepared to pay money for. If people didn't want some particular good or service then nobody made it."

"As you can see," continued our learned professor, "we have now developed beyond the simple making of goods in a small cottage by one man and have developed factories which produce complicated products or produce simple products in a more efficient manner. This produces wealth faster and allows us to enjoy many benefits of our modern civilisation."

"If we look at the Buggy industry of Nowhere we can see how this factory operates. The wooden parts come from the sawmills in the forest region and the metal parts come from the foundry in the outskirts of town. The metal comes from the mines in the mountains. And the leather parts come from a leather factory in the town of Onchor. Bolts and screws come from Maundy and so on. All this complexity has developed slowly over the years as the Buggy manufacturers have competed to make better buggies at cheaper prices. This is the modern industrial society."

The professor paused for effect, "And it all happens naturally as people take action to lead a more comfortable life. Our ancestors came here hundreds of years ago so that we could lead this life. Down there," Professor Thyme indicated everywhere else on Earth past the big drop, "people do not have this freedom and are constrained by kings and emperors and their collections of bureaucrats to work as instructed and to pay taxes which make it harder to develop businesses. Life is not so good. And to cap it all off they have marauding bands of wild men on the rampage of rape and pillage who destroy what workers build and turn all to dust and ruin."

"An economy is a natural thing. Just as the forests of Herstein are a natural thing. If they are left alone then they grow and develop and new species develop and adapt to the various niches of the forest. As climate and circumstances change then some plants or animals do not survive but others do and they grow into the new environment better suited to survive and even flourish. The forest does not need to be controlled, it needs to be left alone. No-one knows what the future holds and no-one can make a universal plan to optimize life for everybody for the future. But if they are left alone people will adapt and adjust what they do to meet their needs and in so doing they will automatically contribute to society what others need - provided they can afford to pay for it. Nothing is for free!"


* The basic Law of Property is stated thus:

All property shall include all physical things including people. All property shall have a recognised owner. That owner shall have all rights to use or dispose of his property as he wishes. Any person obtaining property without the agreement of the legal owner shall make full restoration including the costs of obtaining that restoration to the legal owner. This means that the punishment for theft of any nature is the restoration of the property to the owner.

Children are owned by their parents.

Each person, upon attaining adulthood, shall be the legal owner of his or her own person.


© Copyright; Foundation for Economic Growth and various authors. Individual authors retain their own copyright.

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