View Full Version : An Economics Lesson Even a Liberal Can Grasp

09-06-2011, 10:53 AM
Since the president and his advisers haven't got a clue about how our economy works -- which isn't surprising, since these people have less practical business experience than any kid with a lemonade stand -- here's an economics lesson so short and simple even a liberal can grasp it:

The key point to understand is that an economy is a kind of operating system. This means that if you want the economy to "do" something -- such as create more jobs -- you have to go about it the way the operating system is designed to work. Otherwise you cannot possibly succeed.

Think of it this way: our cell phones have operating systems built into them. There's no Republican way to make a phone call with your iPhone, and no Democratic way to do it. There's no conservative approach to checking your email with a BlackBerry or an Android, and no liberal approach to doing it. You just do it the way your cell phone's operating system requires.

It's the same with an economy. Broadly speaking, there are two kinds of economic operating systems: a free-market economy and a command economy. In a free-market economy, the government sets the rules and enforces them, but otherwise stays out of the way and allows individuals and businesses to call the shots. In a command economy, the government's role is so large that it not only sets and enforces the rules, but also calls the shots.

Because each country -- unlike each cell phone owner -- designs its own economic operating system, no two economies are precisely the same. So our country's free market is somewhat different from Canada's, which itself isn't quite the same as Germany's, Poland's, France's, Australia's, and so forth. Still, in all free-market economies, the government makes and enforces the rules, and then gets out of the way. Likewise with command economies: left-wing communist economies differ somewhat from right-wing fascist economies, but once again, the similarities are more important than the differences. In all command economies, you do what the government tells you to do, or you get your brains kicked in.

Entrepreneurs Create Jobs

In a free-market economy like ours, it's the entrepreneurs who create jobs. They do this by starting new businesses, and by expanding businesses that are already up and running. If you want to create more jobs, you create an environment in which entrepreneurs will thrive. They'll take it from there, because creating jobs by starting and expanding businesses is what thriving entrepreneurs do.

Think of it this way: if you want more milk, create an environment in which cows will thrive. And just as it makes no sense to say you want more milk but oppose cows because they're smelly, dirty, and leave their droppings all over the place -- it makes no sense to say you want more jobs but oppose entrepreneurs because when they succeed they often wind up with more money than the rest of us. You cannot have it both ways.