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Quotation of the Day…

… is from pages 142-143 of the original edition of Walter Lippmann’s in-places flawed but deeply insightful and important 1937 book, The Good Society; Lippmann here describes the methods of the interwar fascists in Italy and Germany, but the lesson is general:

But above all, what income there was depended fundamentally not upon the natural riches of the country but on an extremely delicate and precarious human organization of labor, technology, credit, and management. Those who seized a factory soon saw that they had obtained only an inert heap of bricks and steel: that this capitalist property was incapable of producing income except as part of an economy of credit and international trade that ceased to exist when the managers and directors had been ousted. Those who tried to be more moderate and attempted by legal methods to expropriate the shareholders and creditors and controlling directors of these enterprises found that they were gaining nothing, but were in fact impairing the productivity of the industries.

DBx: There are so many lessons here, including: Wealth is not bestowed by nature. Nor – contra the likes of Thomas Piketty – does wealth flow automatically from capital goods or from the documents that indicate ownership of capital goods. Wealth is created by human ingenuity and effort guided by market prices. This wealth-creation process is greatly assisted by financial markets that economically uninformed pundits and politicians fancy themselves sophisticated in condemning. The identities of owners and managers matter; not everyone has the skills, experience, and fortitude to perform these difficult jobs competently, and many fewer people have the talent and willingness to do what it takes to excel at the performance of these jobs.

Taking stuff belonging to other people is primitive. Conceiving of doing so requires no intelligence beyond that which is had by a hamster, while actually doing so requires only a smidgen more. But wisdom and adult intelligence reveal that insofar as society tolerates the seizing of other people’s stuff the resulting deprivation is suffered not only by those whose stuff is seized but by nearly everyone, including most of those persons who applaud the seizures. This reality isn’t altered by calling the seizures “redistribution” or labeling the proponents of the seizures “progressives.”