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Seven Economic Truths

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You can learn a lot about basic economics from great quotes. David Bahnsen, author of There’s No Free Lunch: 250 Economic Truths, proves how true this is.

Get your copy of David’s book, There’s No Free Lunch, on Amazon: https://l.prageru.com/3vtuRer

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Script:

You can learn a lot about basic economics from great quotes. Here are seven.

1. “…Capitalism is a system that begins not with taking but with giving to others.” — George Gilder

This sounds counter-intuitive, but Gilder is right. The underlying motivation of the entrepreneur is to satisfy not his need, but his customers. That’s his only path to success and profitability.

And once profitable, the entrepreneur invariably puts his new capital to work expanding his business, which in turn creates better products, more jobs, and more wealth for more people.

2. “Nothing contributes so much to the prosperity and happiness of a country as high profits.” — David Ricardo

To judge profits achieved in a free economy without understanding what they mean to the nation at large is a failure to understand economics.

Countries where citizens are generating healthy profits by their individual efforts are countries with a higher tax base, higher research and development, better public services, more robust charity and philanthropy, and ultimately greater happiness and quality of life.

3. “Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.” — Frédéric Bastiat

Our conversations about government spending would be so dramatically different if we first realized that the government has no money to spend that it does not first take from someone else.

Whether it be confiscation (taxation) or debt (future confiscation), government spending, legitimate to the extent that it funds the necessities of government, is always an extraction of wealth from the private sector.

Government needs revenues to function. Everyone agrees on that. But beyond a certain point, who will spend the money more effectively: bureaucrats or the people who worked to earn it?

4. “Differences in habits and attitudes are differences in human capital, just as much as differences in knowledge and skills—and such differences create differences in economic outcomes.” — Thomas Sowell

No attempt to manufacture an equal economic outcome can ever succeed. This quote explains why: differences among people—such as their habits, abilities, attitudes, and goals—always lead to inequality.

No matter how hard governments may try, they can’t force people to be the same. This is called reality.

5. “If history could teach us anything, it would be that private property is inextricably linked with civilization.” — Ludwig Von Mises

Without property rights freedom can’t exist. If individuals don’t have control over their property, then the state does. If the state owns your property, the state owns you.

One of the notable achievements of the Left has been to correlate private property with greed.  This often puts defenders of private property on their heels.

It shouldn’t.

Owning property gives people dignity. And people who own property will be far better stewards of that property than any disinterested third party.

All lovers of freedom should be staunch defenders of private property. Without it, a productive and free society is impossible.

6. “The free market is not a system… It is not something that Washington implements. It does not exist in any legislation, law, bill, regulation, or book. It is what you get when people act on their own, entirely without central direction, and with their own property…” — Jeffrey Tucker

Nobody invented capitalism. It’s what free people do naturally—exchange goods and services for their own benefit.

Before there are interventions, regulations, stipulations, and controls–there are humans acting, associating, cooperating, building, and creating. That economic freedom is what we call capitalism.

When people are free to do what they want—within the bounds of the law, of course—they do their best work. Simple—and wonderful—as that.

7. “Under capitalism, man oppresses man. But under socialism, it’s the other way around.” — Russ Roberts

For the complete script, visit: https://www.prageru.com/video/seven-economic-truths

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38 Comments

  3. Notice that Depreciation does not exist at PragerU.

    Machines wear out just like stone axes wore down for cave men. They just didn't measure it with money. Technology has changed since 1883 but Karl Marx mentioned depreciation 35 times in Das Kapital. But for the last 7 decades economists have said very little about the depreciation of durable consumer goods. Planned obsolescence anyone.

  6. Capitalism works only when it is tempered by a people who share a culture, morality, and history. Capitalism in the way that libertarians, Objectivists, and market fundamentalists envision it — legal prostitution, pornography, psychoactive drugs, and other vices and degeneracies — is just as bad as totalitarian communism.

  8. Capitalism is where people are free to do whatever they want as long as they conform to the law. A law or regulation is meant to ensure that people are sold safe, reliable, and fairly-priced products/services.

    There are countless examples of businesses exploiting customers. Laws and regulations require businesses to meet certain standards. For example, cars have been getting safer and more fuel efficient with each passing decade, partly due to new regulations which keep getting implemented.

    In general, these laws and regulations are largely responsible for making life in developed countries safer and of better quality. You cannot make regulation synonymous with anti-capitalism, cause it isn’t.

  9. The problem is that capitalism exposes weak people to be weak. Weak people do not want that to happen so they seek shelter from stronger people or groups or government. This is something that capitalism isnt prepared to combat, yet always manages to create. When there are economic winners there will also be losers. Those losers turn to communism and socialism so that they can get paid on the work of others.

  10. Ok, I understand this is an American video, hence the polarised ideas about Left and Right but overhere in Europe it is different. We also believe in a free market but we also believe in regulations and socialism. We do not believe in trickle down nonsense or that capitalism serves everyone, it doesn't. Capitalism is ok to a certain extend but needs to be regulation. President George W Bush gave a lot of money to Wall Street which is the stupedist thing anyone could ever do. Wall Street is nothing but a casino where stock brokers and the like are just gambling with their money. It'll just disappear and not benefit society at all. I have never seen people as badly nervous and stressed out as at a stock exchange.
    Be honest PragerU, socialism did add some civilisation. Without it no workers rights, no unions, no healthcare for poor people and no safety net when someone loses their job.

  24. My greatest wish in life is to be able to sufficiently express my hatred of socialism progressivism. I've seen how it corrupts the human character. During 2021, we got two or three stimulus checks in the mail, even though COVID was barely effecting the economy anymore, and all it did was fill us with rage, bitterness, entitlement, and demands for more. Contrast that to the 2009 financial crisis, in which not a single household got a stimulus check and no one complained.

  25. The first quote is just totally ahistorical. If you look at the early history of capitalism, there was a whole lot of taking going on

    Also this idea later on that capitalism is some natural state of humanity is also ahistorical and is disproven easily by looking at a multitude of past and current human civilizations

  27. All these points are based on a non-existent Capitalist utopia, it is based on Capitalism in theory not practice. This is the kind of misinformation that poisons political discussion and prevents us from understanding the facts. Capitalism and Socialism have both had their own faults. Neither is perfect, yet this makes Capitalism look completely void of all flaws.

  29. The first quote used isnt that good of a argument as if you expand it one step more you will realize that the entrepreneur doesnt make their customers happy because they want to but because they have to as if they wouldnt be nice who would buy from them. the reason behind the act is selfish and the action is neutral not positive nor negative.

  32. This video is so stupid, that it is beyond me how anyone can even start to contemplate "quotes" stated here. They are so disconnected from reality, that it is hilarious. And this Bahnsen guy has no idea what he is talking about. He has no qualifications. Even his Wikipedia page has like 10 sentences 😀

  33. Capitalism isn't providing for others. Not even a little bit. Capitalism is about CONVINCING others that what you offer is what they want. Its psychological in nature, not beneficial. All one has to do is look at the amount of garbage products and services that are making us fatter, lazier, more depressed, less interactive with others, more dependent. Capitalism has taken us from complete self-sufficiency and interdependence to a complete inability to be self-sufficient and independent. Defenders of Capitalism are all saying the same thing capitalism thrives on: "All you need is what I provide. Don't go anywhere else."

    Then those companies do the same to their employees. Most corporations don't offer ways to lift their employees up to independence and entrepreneurship. Why? Because that's self defeating. Once again…"I'm all you need. Don't go anywhere else."

    The government had to step in to stop monopolies and total control of companies and corporations, as well as destroying the ecosystem at every opportunity.

    Capitalism doesn't thrive on anything but total mind control for profits.

    It is competition that makes better products and work environments and in order to have a fair and safe competitive environment you need referees (the government).

    Quit acting like capitalism is the end all be all perfect solution to everything. It only works the way it does because we have a representative government to control it with.

  34. I did have 3 semesters of economics, and this is a highly idealized depiction of actual economics that skips over several problems. Does it mean socialism is better? No! But still you really don't want 19th century economics back. Trust me, you don't.