Economic Outlook

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On several occasions in the past, we've been fortunate to be able to feature—in our Economic Outlook column—the writing of Mr. R.E. McMaster, Jr., who edits the fine financial newsletter The Reaper (phone 602/255-4477 for subscription information). And, with today's newspapers full of stories about conflicting economic theories—many of which seem to be able somehow to change their central concepts to suit shifts in the financial winds—we think that the following material, excerpted from R.E.'s essay entitled "Wealth for All", can serve as a worthwhile reminder that no matter how complicated the "experts" try to make economics sound, the subject can be effectively reduced to plain old cause-and-effect common sense.

WEALTH FOR ALL

Economics all boils down to two basic ingredients—land and labor. A well-watered, nutrient- and mineral-rich, humusfilled earth in a temperate climatic zone, populated by healthy, hardworking, future-oriented, free and creative individuals, brings forth the best of all economic worlds.

The laws of physics teach us that energy and matter are interchangeable, basically one and the same. As such, the abstract and concrete are one and the same in the real world in a never-ending flow. This perspective is pregnant with economic truth. Economic exchange, thus, when you boil it all down, is nothing more than the exchange of goods and services . . . the swapping of matter (goods) for energy (services and labor), and vice versa. Money, in the sense of classical economic exchange (barter), is a real good, a commodity, matter. . . whether it's in the form of gold, silver, tobacco leaves, salt, barley, seashells, or wheat—all of which have historically served as money. Money is subsequently also potential, stored, inactive energy, ready to spring forth kinetically as the catalyst for the production of additional goods and services (matter), the end product of the mixture of land and labor. Quickly, we see too that all honest money is ultimately a product of the land, a good, a resource, a commodity, matter, if you will. This viewpoint is consistent with the laws of thermodynamics, the basis of physics and the concrete application of theological truth. The first and second laws of thermodynamics state simply that energy is neither created nor destroyed (first law), but that when energy is transferred or used, useful energy is lost in the transition process (second law). The second law is referred to as entropy . . . that all things move toward a state of decay.