Great Throughts Treasury

"A certain amount of taxes is of course indispensable to carry on essential government functions. Reasonable taxes for this purpose need not hurt production much."

"A man will put forth greater efforts to save himself from ruin than he will merely to improve his position."

"A Day never passes without some ardent reformer or group of reformers suggesting some new government intervention, some new statist scheme to fill some alleged 'need' or relieve some alleged distress."

"A man who is good from docility, and not from stern self-control, has no character."

"A hundred welfare programs, spending more and more billions, lead to chronic budget deficits, which lead to increased paper-money issues, which lead to higher prices."

"A vital function of the free market is to penalize inefficiency and misjudgment and to reward efficiency and good judgment. By distorting economic calculations and creating illusory profits, inflation will destroy this function."

"All method can do is to awaken the most fruitful associations of ideas already in mind. Hence the more methods we adopt?the greater the number of views we take of any problem?the more solutions will suggest themselves."

"All loans, in the eyes of honest borrowers, must eventually be repaid. All credit is debt. Proposals for an increased volume of credit, therefore, are merely another name for proposals for an increased burden of debt. They would seem considerably less inviting if they were habitually referred to by the second name instead of by the first."

"A strong passion for any object will ensure success, for the desire of the end will point out the means."

"A man with a scant vocabulary will almost certainly be a weak thinker. The richer and more copious one's vocabulary and the greater one's awareness of fine distinctions and subtle nuances of meaning, the more fertile and precise is likely to be one's thinking. Knowledge of things and knowledge of the words for them grow together. If you do not know the words, you can hardly know the thing."

"All subsidy measures, all schemes to redistribute income or to force Peter to support Paul, are one-eyed as well as shortsighted. They get their immediate appeal by focusing attention on the alleged needs of some particular group of intended beneficiaries. But the inevitable victims - those who are going to be asked to pay for the new handout in increased taxes (which directly or indirectly means almost everybody else) - are left out of account. Only one-half of the problem has been seen. The cost of the proposed solution has been overlooked."

"Another way to find whether an analogy is fallacious is to see whether you can discover a counter analogy. Surely this is the most effective practice in refuting analogy in argument."

"Among the most viable of all economic delusions is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. Whenever there is long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong. The belief that machines cause unemployment, when held with any logical consistency, leads to preposterous conclusions. Not only must we be causing unemployment with every technological improvement we make today, but primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat."

"Bureaucrats denounce private enterprise for the consequences of their own reckless policies and demand still more governmental controls."

"Arbitrary government power is being multiplied daily by the now practically unchallenged assumption that wherever there is any problem of any kind to be solved, government is the agency to step in and solve it."

"As Morris R. Cohen has remarked: The notion that we can dismiss the views of all previous thinkers surely leaves no basis for the hope that our own work will prove of any value to others."

"But men in their role of taxpayers will be subsidizing themselves in their role of consumers. It becomes a little difficult to trace in this maze precisely who is subsidizing whom. What is forgotten is that subsidies are paid for by someone, and that no method has been discovered by which the community gets something for nothing."

"But as almost all objects differ in some qualities and almost all have some qualities in common, it follows that, contrary to common belief, there is no one classification absolutely essential to any group of objects. An infinite number of classifications may be made, because every object has an infinite number of attributes, depending on the aspect we take of it. Nor is any one aspect of a thing truer than any other. The aspect we take depends entirely on the purpose we have in mind or the problem we wish to solve."

"But a bridge built primarily to provide employment is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. Projects have to be invented. Instead of thinking only of where bridges must be built, the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries."

"But it is easy, as experience has proved, for unions, particularly with the help of one-sided labor legislation which puts compulsions solely on employers, to go beyond their legitimate functions, to act irresponsibly, and to embrace short-sighted and antisocial policies. They do this, for example, whenever they seek to fix the wages of their members above their real market worth. Such an attempt always brings about unemployment. The arrangement can be made to stick, in fact, only by some form of intimidation or coercion."

"But what is important is that every problem should be dealt with by as many methods as possible."

"But this brings us to what I consider the fatal flaw in the monetarist prescriptions. If the leader of the school cannot make up his own mind regarding what the most desirable rate of monetary increase should be, what does he expect to happen when the decision is put in the hands of the politicians? ? The fatal flaw in the monetarist prescription, in brief, is that it postulates that money should consist of irredeemable paper notes and that the final power of determining how many of these are issued should be placed in the hands of the government?that is, in the hands of the politicians in office. The assumption that these politicians could be trusted to act responsibly, particularly for any prolonged period, seems incredibly naive. The real problem today is the opposite of what the monetarists suggest. It is how to get the arbitrary power over the stock of money out of the hands of the government, out of the hands of the politicians."

"Competition always tends to bring about the most economical and efficient method of production. Those who are most successful in this competition will acquire more capital to increase their production still further; those who are least successful will be forced out of the field. So capitalist production tends constantly to be drawn into the hands of the most efficient."

"Capitalism will continue to eliminate mass poverty in more and more places and to an increasingly marked extent if it is merely permitted to do so."

"Contrary to a popular impression, profits are achieved not by raising prices, but by introducing economies and efficiencies that cut costs of production."

"Contrary to age-old prejudices, the wealth of the rich is not the cause of the poverty of the poor, but helps to alleviate that poverty."

"Doubtless you have used, at some time or other in the course of your thinking, nearly every one of the methods I have so far suggested. But the point is not that you have never used these methods at all, but that you have not used them often enough. You were unaware what method you were using. Consequently you used it only occasionally. You used it only when you stumbled on it accidentally. To formulate methods is to bring them to your attention, so that you may use them always, thoroughly, correctly, consistently."

"Each of us must also sell something, even if for most of us it is our own services rather than goods, in order to get the purchasing power to buy."

"Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water."

"Economic progress and justice do not consist in superbly equalized destitution, but in the constant creation of more and more goods and services, of more and more wealth and income to be shared."

"Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in , say, physics, mathematics, or medicine -- the special pleading of selfish interests."

"Economics is haunted by more sophistry than any other discipline cultivated by man."

"Effective economic demand requires not merely need but corresponding purchasing power."

"Economics, as we have now seen again and again, is a science of recognizing secondary consequences. It is also a science of seeing general consequences. It is the science of tracing the effects of some proposed or existing policy not only on some special interest in the short run, but on the general interest in the long run."

"Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment?whether in the form of machines, factories or office buildings?cannot yield an adequate return and loses the greater part of its value."

"Eternal vigilance is the price of an open mind."

"Emotional economics has given birth to theories that calm examination cannot justify. One of these is the idea that labor is being underpaid generally. This would be analogous to the notion that in a free market-prices in general are chronically too low. Another curious but persistent notion is that the interests of a nation?s workers are identical with each other, and that an increase in wages for one union in some obscure way helps all other workers. Not only is there no truth in this idea; the truth is that, if a particular union by coercion is able to enforce for its own members a wage substantially above the real market worth of their services, it will hurt all other workers as it hurts other members of the community."

"Either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter. In this way, the supposed miracles of government spending will appear in another light."

"Employment: (1) he will use the extra profits to expand his operations by buying more machines to make more coats; or (2) he will invest the extra profits in some other industry; or (3) he will spend the extra profits on increasing his own consumption. Whichever of these three courses he takes, he will increase employment."

"Every man knows there are evils in this world which need setting right. Every man has pretty definite ideas as what these evils are. But to most men one in particular stands out vividly. To some, in fact, this stands out with such startling vividness that they lose sight of other evils, or look upon them as the natural consequence of their own particular evil-in-chief."

"Every day each of us in his own activity is engaged in trying to reduce the effort it requires to accomplish a given result. Each of us is trying to save his own labor, to economize the means required to achieve his ends. Every employer, small as well as large, seeks constantly to gain his results more economically and efficiently?that is, by saving labor. Every intelligent workman tries to cut down the effort necessary to accomplish his assigned job. The most ambitious of us try tirelessly to increase the results we can achieve in a given number of hours."

"Everywhere the means is erected into the end, and the end itself is forgotten."

"Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so- called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that it can continue to pile up debt without ever paying it off, because "we owe it to ourselves.""

"For as Alexander Hamilton pointed out in the Federalist Papers nearly two centuries ago, A power over a man?s subsistence amounts to a power over his will."

"For every alleged benefit that the politicians confer upon us, they must necessarily deprive us of something else."

"Full employment?very full employment; long, weary, back-breaking employment?is characteristic of precisely the nations that are most retarded industrially."

"For the amount of real capital at any moment (as distinguished from monetary tokens run off on a printing press) is limited. What is put into the hands of B cannot be put into the hands of A."

"Functional prices are those that encourage the largest volume of production and the largest volume of sales. Functional wages are those that tend to bring about the highest volume of employment and the largest real payrolls."

"For every dollar that is spent on the (boondoggle) bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000, 000. They will have that much taken away from them which they would otherwise have spent on the things they needed most."

"From a strictly economic point of view, buying gold in a major inflation and holding it probably presents the least risk of capital loss of any investment or speculation."