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The Source Of Wealth Creation
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Since humans are the primary element required to create wealth, it is important to invest in their knowledge, experience, growth, and wisdom which can only be done in a free market. Control and manipulation
only retards the needed learning, whether it comes in the form of controlling the industry or manipulating the currency and capital movement.[1] Economist Murray Rothbard explains the damage and misinformation:
Artificial stabilization would, in fact, seriously distort and hamper the workings of the market….Furthermore, improved standards of living come to the public from the fruits of capital investment. Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers. Forcible propping up of the price level prevents this spread of higher living standards.
Shareholder Value Is Not Wealth Creation
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While shareholder value is certainly important and a concern, it is
not wealth creation; it is capital direction or distribution. Also, capital distribution, the free choices of movement, exchange, and transactions, is significantly
different than re-distribution.
Distribution is moral and free; free exchanges between parties and individuals, while re-distribution is most often immoral and oppressive since it typically takes place as a result of powerful entities, usually government, forcing, through theft (although frequently legal theft through taxation laws) or coercion, the movement of capital and wealth to other parties who, otherwise, would not have received it through free-market exchanges and transactions.
The Economics Of Harding And Coolidge
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Vice Presidential candidate Calvin Coolidge acknowledged during the 1920 campaign trail that, “The country was already feeling acutely the results of deflation. Business was depressed. […] Wages had been paid that were not earned. The whole country, from the national government down, had been living on borrowed money. Pay day had come.” But Coolidge also gave the remedy to the depressed economy. “I contended that the only sure method of relieving this distress was for the country to follow the advice of Benjamin Franklin and begin to work and save.”[1] Also driving the cutting of the budget, Harding and Coolidge successfully reduced the budget in 1920 from $6.3 billion to $3.2 billion by 1922 – an astounding 49 percent.[2]