The Peter Gibbons School of Economics
When Peter Gibbons (Ron Livingston) wasn't hammering out TPS reports or watching Kung Fu with his soulmate Joanna (played by the lovely Jennifer Aniston), he was plotting the downfall of the evil Initech Corporation. Peter and his buddies, Micheal Bolton and Samir Nagheenanajar, would plant a computer virus in Initech's accounting software that would take the fractional remainder of the company's banking transactions and siphon them off into an account they had set up. If they caper worked, they would be set for life and no one would ever know the money was missing. The movie, Office Space (1991), became an instant classic and remains one of my favorites.
Unbeknownst to Peter, his plan would have been perfectly legitimate if he were the Chairman of the Federal Reserve rather than a lowly programmer, working long weekends under Bill Lumber's micromanaging eye.
The Peter Gibbons School of Economics has a simple premise:
- There is money available for the public good.
- That money is being hoarded by an evil entity, the capitalist class.
- Taking that money, if done in very small amounts spread acoss a large number of transactions, has no negative impact on the public good.
- On the contrary, by placing that money in the hands of spenders, the money will flow through the economy, stimulating more demand and employment.
Sounds familiar, doesn't it?
In case you are still fuzzy on how this all works, Peter explains the concept brilliantly to his skeptical girlfriend (I apologize that I don't have the exact lines, but I've seen the movie enough times that my memory is pretty close):
Peter: It's like the tray at the store with all the pennies.
Joanna: You mean the cripple tray?
Peter: No, I mean the Take-A-Penny Leave-A-Penny tray. That's all we're doing. And it's just a fraction of penny, only we're doing it from hundreds of trays, thousands of times a day.
Joanna: And how is that not stealing?
Peter: It's not stealing.
Replace Peter with either Alan Greenspan or Ben Bernanke and replace Joanna with Ron Paul and you have the crux of every debate they've had over the last 20 years.
An Interesting Read
Outside of Garet Garrett, my favorite libertarian writer might be Henry Hazlitt. Even though his time covered the New Deal and the post WWII reconstruction, his insights into the workings of modern political economy ring true today. His observations are brilliant and his logical analysis of the various government schemes for economic planning are devastating. Unfortunately, those familiar with his work knows that no one in government has ever paid any attention to Mr. Hazlitt. They repeat the same fallacies over and over and over again.
The Illusions of Point Four (pdf) is a lengthy essay (48 pages) cutting through the fantastical promises of foreign economic aid. Specifically concering a plan by Harry Truman called the Point Four Program, Hazlitt's analysis applies to all American efforts to improve the well being of foreign peoples through government aid. He exposes economic fallacy after fallacy that makes up the core of the aid program and also brings to light the Communist origins of foreign aid programs in general.
One of the best passages concerns the idea of privatizing profits for American investors while socializing losses for American taxpayers. Ha! Where have you heard that before?
Private enterprise is to be "encouraged." How? By authorizing the Export-Import Bank to "guarantee United States private capital against the risks peculiar to those [foreign] investments Some investments may require only a guarantee against the danger of inconvertibility, others may need protection against the danger of expropriation and other dangers as well."
What is the President here proposing? He is proposing that in order to induce American private investors to risk their funds abroad, we are to allow these private investors to keep the profits of their investment, but to force the American taxpayers to assume the losses. - Hazlitt, The Illusions of Point Four, page 31.
It reminds me of Jorg Hulsmann's opening remarks at Mises University this summer:
I love you..... and I hate government.
Have a great week!
David in Qatar