What is a dollar? Yes, it is currency and something we call money, but what does it represent? Where does it get its value? Why do you want and need dollars? Who gives a dollar value?
For centuries, nations used gold and other precious metals as currency. The Bible mentions the gold acquired by Solomon and the kings of other nations. But while gold has intrinsic value because it is used for jewelry that people want to wear, it was used for currency or for money because it was in very limited supply.
The dollar bill is made out of paper. Its intrinsic value is nearly zero and in fact dollar bills wear out and each one is eventually incinerated as it is replaced by a newly printed dollar bill. Up until the 20th century the value of a dollar was tied directly to gold or silver. Each one represented a certain amount of gold or silver that was kept in places like Fort Knox, Kentucky.
But really, what does that dollar represent, especially today? The answer is that it represents goods and services produced by individuals. Those individuals may own companies that produce those goods and services or they may sell their services to companies that produce those goods and services or they may, on their own, create or produce some goods or service that others find to be of value. In any case, dollars represent the value that free individuals place upon them. As one man grows apples to sell, another man builds automobiles to sell. Once a man sells enough apples, he trades the value of those apples to the fellow who sells automobiles and he now has a car. The fellow who works for the automobile company uses the money he earns that represents those apples and all the value of all the other goods and services that people produce to buy his home and the other goods and services he wants and needs. Dollars represent all the goods and services that are produced. They are just a medium for making it easier for you and I to enter into transactions from which both parties benefit in a free society. As we work hard and produce more goods and services than we need for our own use, we use the dollars that represent our goods and services to benefit ourselves and others.
Freedom is a marvelous thing. It energizes, elevates and encourages innovation and hard work. The more goods and services we produce, the wealthier our nation becomes. Everyone benefits, from those just entering the marketplace with their goods and services to those who have already amassed great wealth. When the production of goods and services is discouraged or impaired every citizen of the nation suffers. The economy is pulled down. Jobs disappear. Poverty expands.
There are two segments of society who receive dollarsthat do not produce any goods and services. The independent sector and those in government receive a share of the wealth that others produce to meet their needs and desires. By independent sector I am referring to those who work for nonprofit organizations, directly or indirectly, like me. With few very minor exceptions, nonprofits do not produce any marketplace goods and services. Most of these organizations—from churches to animal shelters—work to build up the spiritual and cultural character of society and they provide direct help to those in need. In other words, they heal, encourage, support and build up the nation by helping others. Free citizens willingly transfer the value of the goods and services they produce (in the form of dollars) to help others and improve the fabric of American society. It’s amazing because no American citizen is coerced into helping others; they do it voluntarily just because they care. In fact, more than $300 billion is generously given each year by Americans who have compassion for others. This American legacy is truly unique in the world. There is no other nation whose citizens give so freely to help others in need.
The other segment of society that does not (in any significant way) produce any goods and services is government at the local, state, and national level. The federal government fulfills its Constitutional duty of providing for the common defense and of maintaining internal order. It defends America by maintaining a strong military and it provides order through our justice system and other limited functions. These are the two specifically enumerated functions of government. Beginning in the 20th century, government began competing with individuals providing goods and services, substituting the decisions of bureaucrats and politicians for the choices and selections of free citizens. While these encroachments on the freedom citizens may have been well intentioned, they were ill advised. These intrusions have been destructive and costly measures that have sacrificed freedom, reduced self-reliance, and subjected large numbers of Americans to poverty and dependence on government for their survival.
The reality is that government bureaucrats and politicians, from the White House to your local city council, take a slice of the goods and services that others produce when they collect their paychecks. They are not producers, they are takers. They don’t enlarge the cumulative wealth of society, they diminish it. Every new bureaucrat that is hired reduces the wealth, the prosperity of society. They are a drag on the economic well-being of our nation.
Clearly some government is necessary. We need to maintain internal order. We must provide for a strong national defense. These are the essential functions of government at the national level. Your state government, your county and local government provide necessary functions such as law enforcement and operation of the court system. In our federalist system, each local jurisdiction can choose to do what the people who live there decide, providing they do not violate the freedoms guaranteed to us in the Bill of Rights. And if you do not like those decisions you can move to another city in another state.
But that dollar bill represents something more than goods and services. It is a marker of your freedom. In a free society it represents your power as an individual. While some in government think all dollars (and thus all wealth) belong to government, that is an idea that is not only anti-freedom, its roots can be found in every dictatorship that ever menaced the globe. Every dollar that is taken from you by government (at the point of a gun, the only way government operates) not only limits your choices by diminishing the dollars you have, it further empowers bureaucratic regulators who will make decisions about your life for you. When that dollar that represents goods and services freely produced is transferred from you to government your freedom has been diminished. Someone else is now deciding how to use the wealth represented by that dollar for their purposes, not yours. The wealth of many is now no longer being transferred by free citizens from one to another, but is being expended at the whims and wishes of a few bureaucrats and politicians.
Because dollars represent the value of goods and services and because each dollar forcefully transferred to government simply divides the economic pie into smaller portions, the amount of dollars transferred to this nonproductive section of society must be kept to an absolute minimum. Taken to its extreme, socialism, the predictable and inevitable result is universal poverty and destitution. Socialism continues to divide the fruits of the producers into smaller and smaller quantities as the non-producers in government take from the producers. There is no other possibility when the number of producers is limited and the number of takers continues to grow. That is the end results of socialism.
Of course, government can take over the means of production, take over health care, and run the railroads, but all will be such inefficient entities and operations that they will only drag the economy down further and make those services worse. From the French Revolution to German National Socialism to Soviet Socialism the story is always the same. When healthy, free economies that innovate, create and bring prosperity to within the grasp of nearly every citizen, are replaced by socialism that destroys, represses, and enslaves their citizens the result is permanent economic depression.
It’s no accident that socialist systems do not innovate, create, or advance the human condition. This is not speculation; it is a matter of historic record. Socialist systems tear the heart and soul out of the citizens of a nation, reducing them to serfs who are subject to the corrupt whims of those in power.
Guard your freedom by guarding your dollars. Spend and give them away freely, but resist the efforts by government to seize those dollars from you. When you do, you are fighting to preserve the freedom and opportunity of future generations of Americans. You are fighting for your children and grandchildren.
This is what the election of 2012 is really about. Will our children and their children enjoy the freedom that you and I have enjoyed—not only to succeed, but also to fail—or will they be serfs of a Washington run socialistic state?