| Lesson 3: Buy Wholesale, Cut Out the Middle Men. |
There are two common myths about wealth: that it comes from the government, and that rich people take it
from poor people. If you take a stick and carve it into a spoon, you have created something of value out of
nothing. All money comes from you. The government simply prints dollars as a tool to measure and track
your economic activity. If it prints too much, then dollars become worthless (price inflation); and people then
switch to trading in goods. If it doesn't print enough, then people have no way of trading small quantities.
Government has no way of making money on its own. It will occasionally try, by starting a government-run
business. But governments makes terrible businesses, because they make the rules and they have no
competition. In the end, all they can really do is take money from you.
Mayors love to ask for grants from the state, and governors ask from the federal government. That is
because they want the power and glory of spending your money; but they don't want to be the bad-guy who
raises your taxes. They want you to think that the money comes from somewhere else or someone else.
If you want to buy something, your money goes further if you pay for it yourself. If the city buys it for you,
then you have added a middle man and increased your cost. If the state does it, you add two layers of
middle-men. The further you send a dollar from home, the more layers of bureaucracy through which it has to
filter before it comes back to you. So keep your money close to home, and cut out the middle men.
Next Lesson: Bureaucracy Must Grow
from poor people. If you take a stick and carve it into a spoon, you have created something of value out of
nothing. All money comes from you. The government simply prints dollars as a tool to measure and track
your economic activity. If it prints too much, then dollars become worthless (price inflation); and people then
switch to trading in goods. If it doesn't print enough, then people have no way of trading small quantities.
Government has no way of making money on its own. It will occasionally try, by starting a government-run
business. But governments makes terrible businesses, because they make the rules and they have no
competition. In the end, all they can really do is take money from you.
Mayors love to ask for grants from the state, and governors ask from the federal government. That is
because they want the power and glory of spending your money; but they don't want to be the bad-guy who
raises your taxes. They want you to think that the money comes from somewhere else or someone else.
If you want to buy something, your money goes further if you pay for it yourself. If the city buys it for you,
then you have added a middle man and increased your cost. If the state does it, you add two layers of
middle-men. The further you send a dollar from home, the more layers of bureaucracy through which it has to
filter before it comes back to you. So keep your money close to home, and cut out the middle men.
Next Lesson: Bureaucracy Must Grow