I started a debate with my teacher. I started with Cruesoeian economics. Robinson Cruesoe produces berries, uses it to sustain him while he gets his stick. Then, he can produce more with the stick, but only while he uses his berries/fullness to sustain him while he maintains it. Pretty sound, right?
Then the teacher added government to the picture. OMG, and he did not explain how this happened. The government gives a loan to Robinson Cruesoe in order to allow him to produce berries and the sticks, plus profit(!). Therefore, the government has saved the day by creating something out of nothing.
I asked where they got the sudden wealth from, and argued that it had to come from the production of somebody else. But the teacher said it did not come from somewhere else, apparently, because there is nobody else on the island but the hypothetical government and Cruesoe.
Oh, and I argued that the reason people had to cut back in a recession was because of capital consumption. Not as much could be produced as the capital was used up, and of what could be produced, a fraction had to be used as savings for maintenence/replacement of the capital structure. Hence, more consumption would only make matters worse, as it would only divert from these necessary savings. I used that to try to disband the argument that it is spending that is necessary.
The only glimmer of hope in this mess is the recognition that for this boom/bust cycle, the Fed caused the malinvestment.
This is sad. I wonder why anyone find's the teacher's refutation passable.
How can I continue the debate without the teacher accepting the realities of human action?
Schools are labour camps.
LOL, I think your teacher is a lost case. What is Crusoe going to do with a loan? Hire some pigs to work for him?Anyways if this wealth didn`t come from anywhere, why does the government need to make it a loan? Why not just make it a hand out? In fact since government has access to this magic wealth why don`t they just dump enormous amounts of it on Crusoe and make him into a wealthy man? They have free money that isn`t coming from anywhere but they only give a measely loan to poor Crusoe?! And they call themselves benevolent!?!
You can't; your teacher is a statist shill.
Print this entertaining comic book. So easy to understand a 10 year old can comprehend it.
The real question is, can your teacher over come the years and years of fallacies, mistruths etc.
Lets hope so.
eliotn: I started a debate with my teacher. I started with Cruesoeian economics. Robinson Cruesoe produces berries, uses it to sustain him while he gets his stick. Then, he can produce more with the stick, but only while he uses his berries/fullness to sustain him while he maintains it. Pretty sound, right? Then the teacher added government to the picture. OMG, and he did not explain how this happened. The government gives a loan to Robinson Cruesoe in order to allow him to produce berries and the sticks, plus profit(!). Therefore, the government has saved the day by creating something out of nothing.
This is too hilarious for words.
This is the sort of thing that happens when economists (and people in general) don't think for themselves.
Diminishing Marginal Utility - IT'S THE LAW!
The teacher is right: the government is not creating wealth, it is just deviating it.
Marko:LOL, I think your teacher is a lost case.
I completely agree. Your teacher obviously has never used his/her brain and probably does not know how to at this point.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
ivanfoofoo: The teacher is right: the government is not creating wealth, it is just deviating it.
No no no, he said that surely the wealth was being taken from somewhere else to give to Crusoe, and the teacher said no, it is creating it ex nihilo.
Unless I misread/misunderstood.
The difference between libertarianism and socialism is that libertarians will tolerate the existence of a socialist community, but socialists can't tolerate a libertarian community.
eliotn:The government gives a loan to Robinson Cruesoe in order to allow him to produce berries and the sticks, plus profit(!).
You point out that somebody in the private sector could have just as easily given Cruesoe a loan, and without nasty monetary inflation.
pwned!
"As long as there are sovereign nations possessing great power, war is inevitable."