19th century French economist Frederic Bastiat often mentioned that when possible men would live off the efforts of others. As simple as this is, economics as a discipline assumes the opposite. I not only acknowledge that work is a second choice, that simple acknowledgment is a pillar of my work.
Not only is work a second choice, it is a distant second choice. Mankind is not near as industrious as mainstream economists would have you believe. Is mankind part of the Animal Kingdom? Most prefer to think that he is not. Perhaps not but where efforts to survive are concerned, man follows the same patterns as the beastly predators. Admittedly, man’s behavior is more complex but the patterns are the same.
Lions and hyenas are natural enemies. Hyenas are most often pointed out as scavengers and thieves. Lions, like hyenas, only hunt if they can’t find a dead carcass. Then before chasing down an animal, lions will look for smaller animals feeding on prey, run them off and steal their food. If there is nothing to scavenge or steal, lions will hunt. The same behavior applies to mankind but there is more to build on. Often it appears that humans are completely industrious and chomping at the bit to be productive. The is because working and living off others is not an option from the get go. When opportunities occur, a human being will live at surprisingly low levels before working to get paid.
Out of the preference for living off of others, grow many common practices such as using government to rig markets and taking welfare payments. The rich show a definite preference for investing in the business of others so as to not do any labor themselves. Some are born with great herding instincts. Those individuals figure out ways to create aggregations of people and extract profits off of their behavior. In the old days, land owners were called rentiers or rent seekers. This practice did not mean buying houses and renting them out. It meant collecting money for doing absolutely nothing, and extracting money out of society as a whole. When assets can no longer increase in value based on fundamentals, the rich lobby government for policies that will cause their property to increase in value independently of profitability. This is the function of the Federal Reserve. The Federal Reserve has not done one thing since its inception in 1914 that has benefited the country as a whole. It has been an invaluable tool for the rich to commander others’ resources.
The rich are no different than the poor when it comes to the principle of work as a second choice. Generally they are more intelligent than the poor and thus more adept at taking from others while appearing productive.
One modern tool for getting something for nothing is the corporate stock buyback. When the Federal Reserve increases the money supply to levels that have no utility to the economy, corporate insiders find it much easier to get paid just by running up the price of their stock. They want to get paid as much as possible as soon as possible and that is what stock buybacks accomplish. Buybacks can be seen as gifts to them from the taxpayers. Although the relationship is not direct, it turns out that way in the end. When the rich get paid for doing nothing, they fail to innovate. In a real sense, innovation is the good the rich do for an economy. When their innovation function is lost, the economy suffers.
So, it works out that just acknowledging work is a second choice is critical to making any kind of forecast or policy recommendation. Of course, economists who work in the private sector get paid for justifying the case their employers want them to make. Government economists, such as Federal Reserve Open Market Committee members, get paid to carry out the political agendas of the politicians who appoint them.
Notice that I make no case for right or wrong nor do I lobby for change. I am just observing human behavior and notice how nature’s tools for survival are used. Human nature only changes over thousands of years. Now, if we want the economy to grow and provide benefits for everyone, all opportunities to get something without doing productive work must be eliminated for the rich as well as the poor. Otherwise productivity is seriously diminished and prosperity for everyone is lessened.