Dr. Roy Spencer has a new book out, and I’m happy to give him space on WUWT with a plug for it. Josh of cartoonsbyjosh.com did the cover art. Looks like Roy was funded by “big fire” in writing this book 😉 Anthony
FUNDANOMICS: The Free Market, Simplified
July 4th, 2011by Dr. Roy Spencer
I’m pretty excited that today (Independence Day, 2011) is the release date for my new book, Fundanomics: The Free Market, Simplified.
Our friend, Josh, did the cover art and it perfectly captures one of the book’s main messages: the greatest prosperity for ALL in a society is achieved when people are free to benefit from their good ideas.
In Chapter 1, A Tale of Two Neanderthals, Borgg and Glogg are the tribe’s firestarters, who get the idea to invent firesticks (matches). This leads to a system of trading with a neighboring tribe which has many great hunters, and as a result the inventors’ tribe never goes hungry again.
But the favored treatment the inventors receive from the tribe’s elders later leads to resentment in the tribe, and people forget how much better off they all are than before — even the poorest among them. Technology and prosperity might change, but human nature does not.
Simply put, a successful economy is just people being allowed to provide as much stuff as possible for each other that is needed and wanted. Economics-wise, everything else is details. When we allow politicians and opportunistic economists to fool us into supporting a variety of technical and murky government “fixes” for the economy, we lose sight of the fundamental motivating force which must be preserved for prosperity to exist: Liberty and the pursuit of happiness.
The main role of the government in the economy is help ensure people play fair…and then get out of the way.
I devote each chapter to a common economic myth.
For example, it’s not about money, which has no inherent value and is simply a convenient means of exchange of goods and services that is more efficient than bartering.
It’s not even about “jobs”, because it makes all the difference what is done in those jobs. Many poor countries have a much lower standard of living than ours, yet fuller employment. If we want full employment, just have half the population dig holes in the ground and the other half can fill them up again. The goal is a higher standard of living…not just “jobs”.
And the desire of some for a “more level playing field” and for “spreading the wealth around” is simply pandering to selfishness and laziness. The truth is that most of the wealth has already been spread around, in the form of a higher standard of living. If we do not allow the few talented and risk-taking people among us have at least the hope of personally benefiting in proportion to their good ideas, then economic progress stops.
The good news is that those few talented people need help, which is where most of the rest of us come in. One person with a new idea for a computer cannot design, manufacture, market, distribute, and sell millions of computers to the rest of society. They need our help, and in the process everyone benefits.
I also examine the role of various government economic programs, most of which end up hurting more than helping. A major reason why the government is so prone to failure is the lack of disincentives against failure in government service. In the real marketplace failures are not rewarded, which helps keep us on the right track to prosperity.
Even the truly needy in our country would be better off if we allowed private charitable organizations, rather than inefficient government bureaucracies to compete for the public’s donations.
I’ve been interested in basic economics for the last 25 years, but frustrated by the technical details (marginal costs, money supply, etc.) that too often scare people away from understanding the most basic forces which propel societies to ever high standards of living. Now, with our country facing tough decisions about our financial future, I decided it was time to stop yelling at the idiots on TV (and giving away all my ideas to talk show hosts) and put the material in a short — less than 100 pages — book that would be approachable by anyone.
I’ll be signing the first 500 copies. The price is $12.95 (including free shipping in the U.S.) You can see all of the chapter first pages at Fundanomics.org. I think this book would be especially valuable to homeschoolers.
Go for it, Dr. Spencer, that’s what our nature dictates and our Constitution protects – trade!
Only a Totalitarian or a Parrot would think that “History is Class Warfare.” Given their apparently inherent fixation upon wealth appropriation and “redistribution”, to themselves, they should know! But I’d say it’s more to the basic point involving the inherent differences between the individualistic vs the Totalitarian mind to instead think of History as trade, and thus the increasing creation and redistribution of wealth between individuals or businesses which are rightfully interested in benefiting themselves and – therefore necessarily and for their mutual benefit – the people who want to trade with them. All of which presupposes the astounding creativity of the human mind, along with its desire to be free and its desire to actually create wealth as proven, another thing which Totalitarians or “Statists” either can’t comprehend, or fear even as an existential threat to themselves which then extends at the least to our “equal” enslavement and poverty as their idea of “progress”.
Progressives are Totalitarian Slavers, pure and simple. That’s their “history” and their idea of “wealth creation”, “justice”, and the same final meaning of the rest of their similarly misappropriated verbiage.
I wish people would actually read Adam Smith instead of just quoting a sentence here and there. A large part of his The Wealth of Nations is devoted to the argument that governments should spend heavily on public works because the free market is not suitable for meeting those needs. Clearly, he had a deep and nuanced understanding of what markets were all about, and he famously derided the merchant class as rapacious, dishonest and a pack of fraudsters.
So, economic liberty, yes. But what exactly does that mean, and for whom?
Happy productive people who love to create things of value to others and love to do this not alone but more effectively in self-selected groups whose member’s talents compliment one another, that such groups are known as corporations, and that the extraneous reward for proud and ambitious participation in such a group is most often a life in which free association with beautiful (highly fertile) women becomes the lot of male members whereas looking beautiful the lot of female members, eventually leading to the bright eyed love of happy and not impoverished children and grandchildren.
I run a sole proprietorship. Alas, I am not yet a corporation, and much of the reason is the lack of appreciation our current government-by-the-people affords small business since ironically, us creative workaholics have allowed an ill winded miserable miscreants and Enron worthy corporations and billionaires to convince youth and minorities that white is black, and all that is fine and good is a pile of poo.
Miserable men want to change human nature, specifically female human nature, since, well, “dude, smart and well adjusted hot chicks dig creative rich guys who run corporations!” That the level of unequal income distribution is much the same under fully communist anti-corporate governments is a fact that eludes their practical consideration, for they are idealists, not realists, utopians, not good drinking buddies.
Here’s a test to see if you can spot attention-demanding player hater “alarmists” vs. healthy skeptics.
[Please double-check the link provided. Robt]
I vote for a Kindle version, too!
Then again, there’s nothing like a hand-illuminated scroll and the smell of molding parchment…sigh.
“At the time of earthquakes, all physicists become seismologists, and at the time of economic crisis all scientists become economists” , is my opinion.
It is true that the US is hampered by government regulations that put spokes on the free market running, even though it is the most free market economy in the world.BUT, and it is a big BUT.
Absolutely free world markets without checks and balances turn into a feudal system, not a democracy. The world economy is at the robber baron stage where pirates became nobles and nobles became pirates looting the rest of the “uncivilized” world. We are at the second robber baron manifestation because outsourcing and the internet have been insidiously turning western societies into service economies, polishing each other’s nails and giving haircuts. The few in control of the multinational companies are reaping huge profits and the middle class is squeezed out of existence. There is a limit to what those very rich can spend their money within the country to keep an economy going for a healthy middle class. How many cars and yachts and mansions do they need? It is the middle class that sustains an economy, and it is dying.
Even for Greece, the sovietization of its economy, a 40% dependence on government posts and civil service salaries, the road to hell was oiled with outsourcing all it manufacturing to far and near cheaper countries. Free markets after all. The local repercussions though were enormous with a lot of people on the dole and pressure on politicians to find them jobs.
I think that the US problem is outsourcing, not its bureaucracy and its subsidies, although they may be a part of the problem. There should be checks and balances in the globalised framework of free markets, which do not exist. And who needs a world government?
Mike says:
July 5, 2011 at 6:55 am
“But the favored treatment the inventors receive from the tribe’s elders later leads to resentment in the tribe…”
Sounds like the society that demonized its own scientists for warning about human caused climate change. Such a shame. When will we ever learn?
Mike, the “scientists” of which you speak have most obviously demonized themselves, and they continue to do so even as we speak! But then I suppose you also think that the Islamofascists and the radical Islamist nations have not demonized themselves, but have instead been “unfairly” victimized by America and Israel?
Listen up, Mike. The question you need to face is if and when you will ever learn! It’s your own mind, after all, which you should be primarily interested in, right? Instead of simply parroting the usual anti-intellectual Totalitarian memes and verbiage?
Unfortunately –
There are a few parameters that are slightly different in the 21st century than in Borgg’s and Glogg’s Neanderthal era. For example – a few more people. Not to mention that the Neanderthal’s did a number on megafauna with all that free-market hunting – – which was O.K. because saber-toothed tigers can make life short for Fido.
Fact is – there hasn’t been a pure “free market” since about the time of Glogg and Borgg because of the simple fact of environmental limits. Whether that is the number of woolly mammoths or the amount of fertile farm land along the Nile in Ancient Egypt. Now, these limits can be addressed by crude Malthusianism or by a club over the head of your neighbor. But, short of that, you need to develop some sort of mechanism to address the reality of limited resources.
Money is insufficient since no medium has universal value. (You can’t eat gold.) Nor does money have much value short of an ordered political system. Thus, governments are instituted among humans with all of their political and priestly castes. And they have been doing this since the days of Gilgamesh.
Hello?
PS – Isn’t this a weather blog?
I am always happy to see a new book by Roy Spencer. This one sounds like the Bible of Free Market Capitalism. Good. We need it. The virtues of Free Markets are no longer taught in our schools and have been replaced by multiculturalism, the stealth version of Marxism.
Roy Spencer, a man of many parts. He is certainly in good company as there are certain similarities to a book by Peter Schiff, investment broker.
Government should limit its role to Defence of the Realm and Law and Order issues and little else.
What a wonderful world it would be if Government was mandated to spend no more than it raised in tax and even better if a yearly referendum was needed to pass the budget. That would be democracy. (see Richard North’s EUReferendum blog)
polistra says:
July 5, 2011 at 7:57 am
“The old way of reaching financial security is vastly more reliable and vastly more available.
Live simply and cheaply, work steadily, save, save, save.”
Only if you want to depend on someone else (your boss) letting you keep your job long enough (no security there); only if you do not aspire to better things for you and your family (living simple and cheap); only if your savings are not swallowed up by inflation (no security there either).
That is why so many are finding it very difficult these days.
Your idea of “financial security” is what has been preached to workers for generations by those at the top because they need workers who will settle for less and are afraid to strike out on their own. Perhaps a thorough reading of “Rich Dad, Poor Dad” will enlighten you.
1) Is Dr. Spencer really qualified? I mean, how would it be if a railroad engineer or astrophysicist became involved in climate science?
2) Is it peer-reviewed?
Dr T G Watkins says:
July 5, 2011 at 8:50 am
“What a wonderful world it would be if Government was mandated to spend no more than it raised in tax and even better if a yearly referendum was needed to pass the budget. That would be democracy.”
If government was mandated to spend no more than it raised in tax. it would simply keep raising the tax. The problem with a balanced budget amendment is that without spending limits the law to balance the budget will always be the excuse to raise taxes. It is spending that must be limited as a percentage of GDP.
While a yearly referendum and democracy sounds good on paper, as soon as the majority learn they can vote themselves the minority’s money and possessions they will do so, under the guise of “democracy” of course.
Karl Marx is reported to have said:
Democracy will last only until the people learn that the can vote themselves money from the government.
If so, it may be the only thing he was right about and the Donks are the ones who will prove it.
I have ordered five copies of the Good Doctor’s book. One for my library, one for a family of home-schoolers that I know and one for my son. The other two are for Donks in my family. I suspect that there is no point because, for those people, “words of wisdom are like pearls cast before the swine”. But, I have to try.
Regards,
Steamboat Jack (Jon Jewett’s evil twin.)
PS
If you were to offer the book on Kindle, please set the price so that you receive a suitable profit. It’s your work, you created it, and you deserve a profit. I believe that the split is 75% author and 25% Amazon (pls correct me if I’m wrong.) Seems more than fair!
Hate to throw warm water on your parade, but …
Warming Ocean Layers Will Undermine Polar Ice Sheets, Climate Models Show
ScienceDaily (July 4, 2011) — Warming of the ocean’s subsurface layers will melt underwater portions of the Greenland and Antarctic ice sheets faster than previously thought, according to new University of Arizona-led research. Such melting would increase the sea level more than already projected.
http://www.sciencedaily.com/releases/2011/07/110703133838.htm
On the other hand maybe we just go a ‘shout them down,’ you know just rant and rave that they are using models … as if there was a branch of science that doesn’t use models.
Thanks for the kind words everyone, and especially for Anthony covering something that is a little “off-topic” (except that global warming would be a non-issue if not for the ramifications to prosperity.)
Note that the book website has the first page of each chapter posted…those might answer a few questions posed here.
This book is self-published…my book agent said since I’m not an economist, it would be difficult to get a publisher interested in it. But if I’m “feeling it”, she encouraged me to publish it myself and maybe a publisher would get interested. I think Kindle would need to wait till then. It’s not even on Amazon.
This really has been a labor of love and passion for the subject, and I’ve had the benefit of running the ideas the book contains by economists and other movers and shakers over the years.
-Roy
I just ordered a copy of the book. It’s a good bet that it will be a great read.
But I have to say that anna v is absolutely right. International “free trade” has been awful for the US. I’d argue that it’s unconstitutional, in that the original constitution allowed import/export taxes only. Now those have been largely done away with, in favor of income taxes (in part by the highly dubious16th amendment). The original idea in the constitution is that we would protect our own tribe, and enjoy free trade within our own national borders. This makes eminent sense, as we are a tribe and we do need borders. Modern RINOS and progressive socialist liberals think we do not need borders. Fools.
We’ll have to read the book to find out what Roy has to say about all this.
Humans are endowed with two great urges: to be fruitful, and to multiply. We want to be fruitful, to make a difference, to be significant, to work, to create and be creative. One can learn this from the Bible, or from life and history. Capitalism works because it allows people to be fruitful, to be what we are by nature.
Marxism/socialism/progressivism always fails because it fights against our natural urges. It tries to turn humans into some sort of hive mentality, busy bees with centralized control by a few queen bees. These models have never worked and will never work because they reject our nature. Government handouts likewise eventually destroy not raise up, because they disincentivize the desire to be fruitful while appealing to greed and sloth. People who are poor need work not money. Give them money long enough and it will destroy them.
Go Dr. Roy!
Of course, it will have to be measured against “Tom Swift and His Incredible Bread Machine.”
Economics and climatology seem to be a natural fit. I became intensely interested in both about 6 years ago. I started reading Hayek, Mises, Friedman and Sowell about the same time I started reading Michaels, Singer, Spencer, etc. Both are inexact sciences. Neither discipline can predict anything accurately with their computer models. Both have opposing, dichotomous points of view. The Keynesians are just as absolutely wrong as the AGW alarmists (and our current administration subscribes to both). Socialism and centralized government control always seem to be the “solution” to the “problem” of global warming. The free market is the wisest decision maker there is. Government intervention with the taxpayers’ money have given us such economically non-viable boondoggles as wind farms, solar farms and ethanol as a gasoline adulterant.
I find it astounding that Dr. Spencer, in his professional capacity, doesn’t teach. He’s purely a researcher. He may not be aware of it, but he is an excellent teacher. I’d like to see him write a book about global warming written for about a 9th grade reading comprehension with lots of pictures and simple diagrams. It would be great for schools to add balance to their AGW propaganda and as an added bonus it would be comprehensible by members of Congress.
Economics has been corrupted as a science for political purposes. We read about how our government is subsidizing big oil and the opposite is true. Exxon made 2.9 billion in America the first quarter and paid 3.6 billion in taxes. Exxon did earn 8 billion outside the US and paid appropriate taxes in the other countries. The global warming movement is corrupted science and the economics trade is being corrupted.
anna v says:
July 5, 2011 at 8:32 am
I don’t see how it could be possible for you to be any more wrong. Please spend some time educating yourself as to what a service sector job is. It is not limited to burger flippers and nail polishers. In the world of economics there are two classifications for work. Manufacturing and service. If you aren’t spending your time actually building something, then you are part of the service sector.
Lawyers, accountants, consultants, programmers, etc. Are all part of the service sector.
To be a little more precise, your job classification is actually defined by what your company does. An accountant who works for an automobile manufacturer is considered part of the manufacturing sector. Spin that division out into a newly formed company, and he magically goes from manufacturing to service, even though he is doing the same job, at the same desk, for the same manager.
It is a lie that the middle class is being squeezed out of existence. The middle class is healthy and growing. At least it was until the Obama recession came along.
As to outsourcing, once again you couldn’t be further from the truth. Outsourcing does not destroy jobs. Yes, a measure of the work that was once done in this country is now done outside this country. The result of this is two fold. Internally, this makes products less expensive. The people who save money on these less expensive products (that includes you anna) are better off. It also means they have money left over to spend on other things that they want. Increased purchasing of these other things means increased employment in those areas.
Externally, the people newly employed in other countries now have some money to spend. Which they do. Eventually, every penny sent overseas will make it’s way back to the US in the form of either purchases or investment. Both of which create jobs here in the US.
Outsourcing does not destroy jobs, it moves them around.
Johnny Gunn says:
July 5, 2011 at 8:35 am
There is no such thing as a limited resource, so long as human ingenuity is not constrained.
Did the British economy grind to a halt when the forests started to run out? Of course not, they found a new source of energy.
Did the world’s economy grind to a halt when whale oil became scarce? Of course not, they found new sources of oil.
Malthus was wrong, a fact that even he admitted just a few decades after his famous book.
Is there a need for some kind of authority to adjudicate when two entities both want to use the same resource? Of course. But that is a far cry from declaring that we need govt to divy up scarce resources.
Tom in Florida says:
July 5, 2011 at 9:12 am
The balanced budget ammendment currently before congress has spending capped at either 15% or 18% (I forget which) of GDP. Of course it has no chance of passing.
Mike says:
July 5, 2011 at 9:42 am
Climate Models Show
—
Thanks for disproving yourself. Come back when you have actual data.
Jerry says:
July 5, 2011 at 9:50 am
International “free trade” has been awful for the US.
—
International trade is what has made this country rich. I’m willing to bet that you think that manufacturing in this country has been destroyed. You would be wrong. There is more manufacturing in this country today, than there has been at any time in our history. What has decreased is manufacturing employment. Workers have been replaced by machines. However, this is a good thing. 200 years ago, 95% of Americans worked on farms. The total is now about 1%. Was this transition a bad thing? Of course not. And neither is the continued automation of the manufacturing sector. New work will always be found, so long as govt doesn’t muck up the workings of the economy.