Something for Nothing

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"Necessity
is the mother of invention."
~ traditional saying

"Subsidies
are the father of stagnation."
~ prospective traditional saying

Of all the
mindsets that keep people from attaining a level of success that
matches their capabilities, this one is by far the most crippling:
"something for nothing."

It appears
in many venues, wearing many disguises. But wherever people accept
any version of it as their guiding principle, their output will
rarely match their potential.

The mindset
begins in the family. Squalling babies expect attention. They usually
get it.

Growing up
involves abandoning the mindset of an infant. This sometimes takes
80 years, and sometimes longer. By then, the infant is on Social
Security and Medicare. He finds that politicians respond just as
his parents did: They will do anything to stop the squalling. So,
the squalling never ceases. It gets louder.

The infant
of whatever age does not perceive that something for nothing doesn’t
exist. Someone always must pay. The infant should eventually learn
that when he becomes capable of acting on his own behalf and at
his own expense, he is expected to take more responsibility.

Charity begins
at home. So does responsibility.

But there are
few things in life resented more than responsibility.

So, people
seek ways to remain the recipients of something for nothing. They
learn to beg. They learn to wheedle. They become guilt-manipulators.
They work the system, whatever the system is.

The mark of
a productive system is its resistance to wheedling. The closer it
comes to the principle of "value given for price received,"
the more it encourages productivity.

Parents who
do not move their children into responsibility and out of wheedling
are asking for a lifetime of wheedling.

When millions
of families reward wheedling as a way of life, the wheedlers find
that they can continue to receive something for nothing: value given
for wheedling imposed. The cost of wheedling appears to be low.
The value received is high. This increases the supply of wheedling.

Yet the cost
of wheedling is very high: thwarted productivity. For every year
of missed productivity, the cost of catching up becomes more expensive.

A WAY
OF LIFE

Rule: It is
easier to spot wheedling in others than in ourselves. A word to
the wise is sufficient. On the other hand, “A reproof entereth more
into a wise man than an hundred stripes into a fool (Proverbs 17:10).

Speak not
in the ears of a fool: for he will despise the wisdom of thy words
(Proverbs 23:9).

People who
expect something for nothing find that their circle of associates
narrows over time. People who grow tired of wheedling leave the
circle in which wheedlers congregate. This leaves the wheedlers
to wheedle only each other. The economic returns from wheedling
fall as productive people leave the circle.

This can be
a circle as small as a club. It can be as large as a nation. The
pattern is inescapable. Productive people seek to avoid wheedlers.

Wheedling is
an attempt to gain something for nothing.

In contrast,
there are people who ask for a favor who are ready to provide favors.
This is not wheedling. It is a way of paying for value received.
Members are in a kind of tax-free mutual association. The tax authorities
make barter taxable, but barter is very difficult to trace. Mutual
favors are generally invisible to tax collectors.

The problem
comes with the permanent flow of one-way favors. What works for
infants does not work for adults unless they are wards: in effect,
permanent infants without legal responsibility.

The constant
demand for one-way favors marks a failed career and a failing society.
It is even worse when the favors become legislated. The favors move
from favors to legal entitlements. This institutionalizes failure.

I lecture every
month to unemployed people in the inner city who are in a privately
funded program that pays them the minimum wage to learn how to get
jobs. Single mothers in these classes are far more motivated to
go out and get a job than the young men are. The young men have
been living off the welfare system all their lives. They did not
get guidance from fathers in their homes. There were no fathers
at home. They are sometimes addicted to drugs. They do not possess
habits of self-discipline. Some drop out of the program within a
week. Even those who complete it and get jobs quit work within three
weeks. They find it too difficult to adjust to responsibility.

This is a long-term
cost of the something-for-nothing mindset.

WE DON’T
KNOW OUR LIMITS

Most people
fear failure more than they desire success. This mentality keeps
people in their place — their self-imposed place.

Fearing failure,
people do not voluntarily venture outside their comfort zones. But
these comfort zones serve as major barriers to entry. These self-imposed
barriers protect the market share of established participants.

The fact is,
we don’t know all of our limits. Also, as we improve our performance,
these limits move outward. Yes, there are personal limits, usually
physical but sometimes mental. Rocket science is a restricted profession.
But there are so many potential areas of progress in every person’s
life that there is no excuse for not pushing these limits outward.

Whenever we
do this, we open up areas of service.

Most areas
of service can become financially profitable. There are usually
lots of people with money out there saying, "Serve me; I’ll
pay!"

People who
spend their lives saying, "Serve me, but I won’t pay!"
have great difficulty recognizing those people with the mindset
of payment for services rendered. So, they do not become effective
entrepreneurs.

The limits
facing a child in grade school are overcome, one by one. This parentally
imposed process continues for years. The greatest value of education
is its lesson that perceived limits can usually be overcome through
self-discipline and close attention to detail.

A student could
decide to get failing grades at age six. If he sticks to this program
of passive resistance, he can defeat any educational system. But
very few children adopt this mindset. It tends to appear in the
lives of future drop-outs when they hit junior high school. At some
point, they quit high school.

At some point,
we all quit school, but this does not mean that we quit learning.
The habits gained in school stay with most of us. We keep pushing
our limits.

One mark of
personal failure is easy to describe. A person who reviews his last
five years discovers a grim truth: "There is nothing I can
do today that I could not do five years ago." This is the retirement
mentality.

Periodic self-review
is vitally important. It lets us see if the retirement mentality
has set in. We have to take active steps to overcome it whenever
we perceive that we have succumbed to it.

I suggest that
you sit down at a table, get pencil and paper, and make a list.
Here is what should be on it.

  • Profitable
    things you do today that you did not do five years ago. Why?
  • Profitable
    things you do today that you could not have done five years ago.
    Why?
  • Profitable
    things you would like to do in five years that you are not doing
    today. Why?
  • Profitable
    things you would like to be able to do, but cannot do today, five
    years from today. Why?

The first two
lists will give you confidence. You need confidence to fill in the
second two lists.

Then you need
a step-by-step program to achieve whatever is on the second two
lists.

People who
refuse to do this exercise — the vast majority of my subscribers,
let alone non-subscribers — will continue to bump along. They will
do whatever they have been doing in an unsystematic way.

It’s not that
the particular skills you will pick up over the next five years
will necessarily make you rich or famous. You may find that these
skills and their output are non-marketable in future conditions.
But the self-discipline of writing down medium-term goals and devising
quarterly-reviewable plans to achieve them will make a big difference
in your attitude toward achievement. If you pursue your plan, you
will find that you extend your limits outward by overcoming what
you regard as today’s limits.

HOW WILL
YOU PAY?

Life is mainly
a trade-off between money and time. You must pay in money or time.
You will be paid in money or time.

We buy time
with money. Medical care over the last century has extended our
life expectancy, mainly by reducing the rate of infant and child
mortality. This has cost a lot of money. One of the marks of a rich
society is that the share of national income going to health care
rises.

Why is this
a mark of progress? Because, as we make more money — increase
our productivity — we allocate a larger percentage of our income
to health care. The value of each additional dollar of income increases
our desire to buy more time for ourselves. So, the percentage of
our incomes devoted to leisure — "free time" not
subject to the income tax — and health care rises.

This is a trade-off.
When you make more money, the value of your remaining time in relation
to your income rises. You buy more time.

It is a mark
of economic ignorance when someone criticizes modern America for
the high percentage of its national income spent on medical services.
This is a sign of its success, not its failure. The Medicare system
does skew this figure upward, but even without government-funded
medicine, the percentage would rise with increased productivity.

When a business
starts out, the owner must do everything. He has little money. So,
he has to pay in time. As the business grows, the owner spends more
money to hire lower-output time services. He re-allocates his now
more valuable time to higher-value projects. At some point, he retires.
(Death is a form of retirement.)

The money-value
of our time rises when we increase our non-time income. It value
also rises as it trickles out. We can earn more money. We cannot
do much to earn more time.

THE POOR-BOY
MINDSET

This is a variant
of something for nothing. The poor boy thinks that financial success
is based on saving money. He does not understand that it is based
on a different principle altogether: risking money to make even
more money.

The poor boy
seeks for free whatever will make him money. He thinks that the
world owes him a living. He thinks that money grows on trees. He
thinks that others owe him money. He is afflicted by the something-for-nothing
mindset.

One form of
this is the free-information syndrome. He asks others how to make
money. He asks for free advice.

He does not
understand this principle:

Free advice
is worth twice what you pay for it, if you’re lucky.

He expects
rich people to donate their time to tell them how to get rich.

Rich people
know this, so they distance themselves from these people. Rich people
know that their advice will not be taken, or if taken, will be applied
incorrectly. So, poor boys then seek information from others in
their own circle. But everyone in this circle is struggling.

The assumption
that valuable information is free may be the greatest single error
in economic theory. Thomas Sowell’s book, Knowledge
and Decisions
, is a detailed study of how this false assumption
promotes government intervention and thereby reduces freedom and
efficiency.

If you want
to fail in life, follow this guideline.

  1. Expect others
    to give you things.
  2. Expect others
    to share valuable information with you for free.
  3. Expect buyers
    to pay you for your information.
  4. Make money
    as a middleman: get information for free and sell it at a profit.

The worst abusers
are those who come in the name of a shared cause. Decades ago, Murray
Rothbard wrote about this. The libertarians are always asking for
a subsidy from other libertarians in the name of the cause.

Christians
are even worse. When I went to work for the Foundation for Economic
Education (FEE) in 1971, I was told by the editor of The Freeman,
Presbyterian Paul Poirot, that FEE had to impose a policy for the
book-shipping room. The book room’s shippers were not allowed to
send books on credit to any organization with "Christian"
in its name. FEE had learned from years of bad experiences that
the likelihood of payment was low.

Christians
are used to getting fed intellectually for free. Meanwhile, they
rarely tithe. So, they have difficulty breaking out of the poor-boy
mindset. They think:

Jesus died
for my sins. You should suffer for me, too, for the sake of the
cause.

This may apply
to their money: "no payment for services rendered." It
may apply to their work performance: "It’s good enough for
God, who owes me some slack, and so do you." The poor-boy mindset
keeps them in low-level positions all their lives.

There are some
Christian groups where this mindset is missing. Armenians are good
businessmen. They are "cash on the barrel head" people.
They’ll sell it to you wholesale if the order is large enough, but
don’t expect any favors. They are tough competitors. As my Jewish
roommate told me in 1962, "When the Armenians moved in, the
Jews moved out." (He was speaking of Fresno.) The Dutch are
not much afflicted with the mindset. Neither are the Scots.

Pay for services
rendered. This includes information.

CONCLUSION

When people
seek something for nothing, they will eventually wind up with nothing
for something. This is true of personal agendas. It is also true
of political agendas.

So, here is
a list of rules that will help protect you from nothing for something.

  • There is
    no pot of gold at the end of the rainbow.
  • There is
    no tooth fairy.
  • There is
    no Santa Claus.
  • The $19.95
    secret formula doesn’t work.
  • The government
    is not here to help you.

October
25, 2006

Gary
North [send him mail] is the
author of Mises
on Money
. Visit http://www.garynorth.com.
He is also the author of a free 17-volume series, An
Economic Commentary on the Bible
.

Gary
North Archives

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