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Archives: 2012 June

June, 2012 Archives

Only the educated would read this. My guess is it will go unread.

That Which is Seen, and That Which is Not Seen

by Frederic Bastiat, 1850

“IX. CREDIT

“In all times, but more especially of late years, attempts have been made to extend wealth by the extension of credit.

“I believe it is no exaggeration to say, that since the revolution of February, the Parisian presses have issued more than 10,000 pamphlets, crying up this solution of the social problem. The only basis, alas! of this solution, is an optical delusion – if, indeed, an optical delusion can be called a basis at all.

“The first thing done is to confuse cash with produce, then paper money with cash; and from these two confusions it is pretended that a reality can be drawn.

“It is absolutely necessary in this question to forget money, coin, bills, and the other instruments by means of which productions pass from hand to hand; our business is with the productions themselves, which are the real objects of the loan; for when a farmer borrows fifty francs to buy a plough, it is not, in reality, the fifty francs which are lent to him, but the plough: and when a merchant borrows 20,000 francs to purchase a house, it is not the 20,000 francs which he owes, but the house. Money only appears for the sake of facilitating the arrangements between the parties.

“Peter may not be disposed to lend his plough, but James may be willing to lend his money. What does William do in this case? He borrows money of James, and with this money he buys the plough of Peter.

“But, in point of fact, no one borrows money for the sake of the money itself; money is only the medium by which to obtain possession of productions. Now, it is impossible in any country to transmit from one person to another more productions than that country contains.

“Whatever may be the amount of cash and of paper which is in circulation, the whole of the borrowers cannot receive more ploughs, houses, tools, and supplies of raw material, than the lenders altogether can furnish; for we must take care not to forget, that every borrower supposes a lender, and that what is once borrowed implies a loan.

“This granted, what advantage is there in institutions of credit? It is, that they facilitate, between borrowers and lenders, the means of finding and treating with each other; but it is not in their power to cause an instantaneous increase of the things to be borrowed and lent. And yet they ought to be able to do so, if the aim of the reformers is to be attained, since they aspire to nothing less than to place ploughs, houses, tools, and provisions in the hands of all those who desire them.

“And how do they intend to effect this?

“By making the State security for the loan.

“Let us try and fathom the subject, for it contains something which is seen, and also something which is not seen. We must endeavour to look at both.

“We will suppose that there is but one plough in the world, and that two farmers apply for it.

“Peter is the possessor of the only plough which is to be had in France; John and James wish to borrow it. John, by his honesty, his property, and good reputation, offers security. He inspires confidence; he has credit. James inspires little or no confidence. It naturally happens that Peter lends his plough to John.

“But now, according to the Socialist plan, the State interferes, and says to Peter, “Lend your plough to James, I will be security for its return, and this security will be better than that of John, for he has no one to be responsible for him but himself; and I, although it is true that I have nothing, dispose of the fortune of the taxpayers, and it is with their money that, in case of need, I shall pay you the principal and interest.” Consequently, Peter lends his plough to James: this is what is seen.

“And the Socialists rub their hands, and say, “See how well our plan has answered. Thanks to the intervention of the State, poor James has a plough. He will no longer be obliged to dig the ground; he is on the road to make a fortune. It is a good thing for him, and an advantage to the nation as a whole.”

“Indeed, gentlemen, it is no such thing; it is no advantage to the nation, for there is something behind which is not seen.

“It is not seen, that the plough is in the hands of James, only because it is not in those of John.

“It is not seen, that if James farms instead of digging, John will be reduced to the necessity of digging instead of farming.

“That, consequently, what was considered an increase of loan, is nothing but a displacement of loan. Besides, it is not seen that this displacement implies two acts of deep injustice.

“It is an injustice to John, who, after having deserved and obtained credit by his honesty and activity, sees himself robbed of it.

“It is an injustice to the tax-payers, who are made to pay a debt which is no concern of theirs.

“Will any one say, that Government offers the same facilities to John as it does to James? But as there is only one plough to be had, two cannot be lent. The argument always maintains that, thanks to the intervention of the State, more will be borrowed than there are things to be lent; for the plough represents here the bulk of available capitals.

“It is true, I have reduced the operation to the most simple expression of it, but if you submit the most complicated Government institutions of credit to the same test, you will be convinced that they can have but on result; viz., to displace credit, not to augment it. In one country, and in a given time, there is only a certain amount of capital available, and all are employed. In guaranteeing the non-payers, the State may, indeed, increase the number of borrowers, and thus raise the rate of interest (always to the prejudice of the tax-payer), but it has no power to increase the number of lenders, and the importance of the total of the loans.

“There is one conclusion, however, which I would not for the world be suspected of drawing. I say, that the law ought not to favour, artificially, the power of borrowing, but I do not say that it ought not to restrain them artificially. If, in our system of mortgage, or in any other, there be obstacles to the diffusion of the application of credit, let them be got rid of; nothing can be better or more just than this. But this is all which is consistent with liberty, and it is all that any who are worthy of the name of reformers will ask.”

Nobody tells this to people who are beginners
I wish someone told me.
All of us who do creative work, we get into it because we have good taste.
But there is a gap.
For the first couple years you make stuff, it’s just not that good. It’s trying to be good, it has potential, but it’s not.
But your taste, the thing that got you into the game, is still killer. And your taste is why your work disappoints you.
A lot of people never get past this phase, they quit.
Most people I know who do interesting, creative work went through years of this.
We know our work doesn’t have this special thing that we want it to have.
We all go through this.
And if you are just starting out or you are still in this phase, you gotta know it’s normal and the most important thing you can do is
DO A LOT OF WORK
Put yourself on a deadline so that every week you will finish one story.
It is only by going through a volume of work that you will close that gap
and your work will be as good as your ambitions
And I took longer to figure out how to do this than anyone I’ve ever met.
It’s gonna take a while. It’s normal to take a while.
You’ve just gotta fight your way through it.
– Ira Glass

More of this, please.

The paradox of our age
We have bigger houses but smaller families;
more conveniences, but less time;
We have more degrees, but less sense;
more knowledge, but less judgement;
more experts, but more problems;
more medicines, but less healthiness;
We’ve been all the way to the moon and back,
but have trouble crossing the street
to meet the new neighbor.
We built more computers to hold more information
to produce more copies than ever,
but have less communication;
We have become long on quantity,
but short on quality.
These are times of fast foods
but slow digestion;
Tall man but short character
Steep profits but shallow relationships.
It’s a time when there is much in the window,
but nothing in the room.
…His holiness the 14th Dalai Lama