I found this classic in Ajji's collection in Pune. It looked like a slim, easy to read book and I picked it up. I have no idea when it was bought but the paper was so brittle that it would break into pieces when I turned them. I glanced through it, picked up the key point from each chapter and put it away carefully. I doubt if any one else would be able to read this any more.
Interesting concepts like 'The Broken Window' (when some lumpen elements break a window is it good or bad for the economy - it's bad unlike the popular concept that was s good for the economy), 'The Blessings of Destruction' where he states that though some see endless benefits in enormous acts of destruction - it is a fallacy which confuses need with demand. Most of the good economic results which people attribute to war are really owing to wartime inflation. He says that the belief that a genuine prosperity can be brought about by a 'replacement' demand' for things destroyed or not made during the war is a palpable fallacy.
In 'Public Work Means Taxes' he says that a certain amount of public spending is necessary to perform essential functions but to give subsidies and hope to get something for nothing makes no sense. One cannot invest projects for creating employment because for every public job created by the project, a prvate job has been destroyed. On 'Taxes Discouraging Production' he says the larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble.
In 'Credit Diverts Production' he says a fundamental thing - that credit is not something a banker gives to a man - credit is something the man already has against which he gets the loan. Government funds all come through taxes. In 'The Curse of Machinery'he proves that on net balance technological improvements, economies and efficiency do not through men out of work. On the other hand machines, discoveries and inventions increase real wages. He says that disbanding beaurocrtas is a good idea because for our money we pay through taxes we get nothing in return. He says its better to have easy going loafers as beaurocrats than those who actively disrupt the production. He says when we can find no better argument for the retention of any group of office goers than that of retaining their purchasing power, it is time to get rid of them.
The economic goal of any nation, as of any individual, is to get the greatest results with the least effort. On subsidies he says that all subsidies are paid by someone and by no method does a community get something for nothing - which means subsidies are being paid for by someone.
'A power over a man's subsistence amounts to a power over his will.'
The best way to raise wages is to raise labour productivity. The more the individual worker produces, the more he increases the wealth of the whole community. Real wages come out of production, not out of goverment decrees.
Makes sense. I am in agreement. Create real value.
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