Sunday, January 20, 2008
Economist, Ph.D., Nobel Prize, Millions And Millions Of Dead People
General piece by
Ted Baiamonte
Muhammad Yunis (economist,Ph.D, Nobel Laureate) is the toast of the international, liberal, anti-poverty, jet set these days. He is primarily associated with the concept of micro financing. Micro financing is very simple: you give a tiny loan, at very modest interest rates, if any at all, of a few dollars each to poor women (men don’t pay back the loans, he says) who use it for some practical business related purpose. The loan is repaid, at which time another loan can be made. Presto chango, in a little time everyone is in a for profit business, and poverty is finally vanquished after all these centuries?
It does sound too good to be true? And of course, money lending has been around since money was invented; so you do have to wonder what, if anything, is new about micro financing? Yunis loves to talk about how he got the idea from evil loan sharks who came before him? He does not say why competitor loan sharks with lower rates did not emerge until profits were driven down to near zero? Most likely this happened, if it did happen, because restrictive gov’t regulations were so onerous that only illegal loan shark type operations could exist to gouge the desperately poor with usurious rates.
One thing is certain: Yunis will not use the word capitalism to describe micro financing. He has that in common with Mussolini (hero to American Progressives before he sided with Hitler), Hitler, Stalin (another hero to American Progressives before 30 million bodies were discovered), and Mao. Had those fine gentleman been obsessed with capitalism (voluntary economic interactions) rather than their deadly gov’t schemes, 200 million people would not have been murdered. Not coincidentally, Hillary Clinton has described unregulated capitalism as, “the most dangerous thing in the world”. It would seem they all hate capitalism because they hate to see free people engaged in voluntary economic exchanges to get what they think is best for them. They prefer to control the process because free people are considered too stupid to know what they should really want, or perhaps it is that people like Hillary just want and need power and will adopt any rationale to get it. Hillary and the generally recreant Democrats want you to have what they want because they know better than you, and let’s not forget, they know more about what is good for us because, well, .......they are, frankly, superior to you.
Of course every would-be dictator since the dawn of time needs to disambiguate a little with a good new name for what they propose so it won’t be confused with the last big gov’t, anti capitalist, gov’t scheme that killed or impoverished millions. Yunis is greeted as the latest liberal hero for his new or semi new term: “social business”. A social business (his bank for example) is a business that sells a product he likes, and it may or may not make a profit. To him, and his compatriots throughout all of human history, it is obvious that people are too stupid to know what they need. If Yunis or other intelligent business people provide what people actually need then they are saintly folks who are conducting a social business. If a business makes only what people want to buy, rather than what socially enlightened owners want to sell to them, then those businesses are anti-social; for profit businesses. It’s perfectly anti American isn’t it? It assumes freedom doesn’t work and gov’t power does, despite the obvious fact that world economic history amounted to virtually nothing until political freedom and economic freedom (capitalism) were discovered, primarily, by Americans in the early 19th Century?
Anyway, after the anti-capitalists determine what goods and services should be offered to the blind, dumb masses they then want the businesses or gov’t to limit the ultimate evil, i.e., profits. This is a step forward though in that many modern would-be dictators realize that despite their genius they don’t have the genius to successfully own and operate a business, let
alone businesses. But what their genius does allow them to do is tell the businesses what to make for the social good, and to then tax the profits with which they can do even more social good. It sounds like love would be bursting out everywhere doesn’t it? This of course all assumes they have enough time, before they are compelled to make war on their neighboring countries so they too can appreciate real social genius. Limited time is the real conundrum that all anti- capitalist dictators face rather quickly it seems.
The anti-profit cancer is now deeply ingrained, even in America, tragically. Just the other night a woman was telling me about the obscene profits the evil drug companies were making and the concomitant need to socialize American medicine. When I told her I have owned one of the biggest drug companies for years and am losing money, she didn’t respond? When I asked her why she doesn’t buy stock and then give the obscene profits away for social uses, she didn’t seem interested? Nor did she seem to care about what any first year economics student knows, namely, that in a capitalist economy profits are ultimately “zero” because big profits attract big, lower priced, competition.
If we take the Yunis bank concept further we see that the critical value of profit becomes clear. If one bank makes a profit because it loans to people who pay back the loans, they are doing a social good just as any successful commercial bank does. If another makes no profit or loses money because it makes loans to people who run failed enterprises, they are not doing a social good by making possible failed or non sustainable commercial enterprises. They are wasting money and the resources they buy by not deploying them in a profitable and sustainable way.
An investor who wants to do the most real social good will invest in and enable the bank that does the most social good as determined by profit. Profit is not evil, it is the way we learn where to invest our limited supply of money in sustainable economic enterprises. If we allocate limited capital according to profits we all get richer, if we let gov’t geniuses guess at where to invest our money or if we individually invest without regard to profit then we get poorer. Profit oriented capital allocation is the key to general wealth and prosperity. But, profit is pure evil to Yunis, Hillary, and all the others before them because it doesn’t need them at all. Profit safely distributes power into the hands of millions of free buyers, sellers, and investors, rather than concentrates it in the totalitarian hands of gov’t schemers who have so decimated much of human history.
Ted Baiamonte
HowardWasRight 
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