|Lesson 3: Buy Wholesale, Cut Out the Middle Men.
There are two common myths about wealth: that it comes from the government, and that rich
people take it from poor people. If you take a stick and carve it into a spoon, you have created
something of value out of nothing. All money comes from you. The government simply prints
dollars as a tool to measure and track your economic activity. If it prints too much, then dollars
become worthless (price inflation); and people then switch to trading in goods. If it doesn't print
enough, then people have no way of trading small quantities.
Government has no way of making money on its own. It will occasionally try, by starting a
government-run business. But governments makes terrible businesses, because they make the
rules and they have no competition. In the end, all they can really do is take money from you.
Mayors love to ask for grants from the state, and governors ask from the federal government.
That is because they want the power and glory of spending your money; but they don't want to
be the bad-guy who raises your taxes. They want you to think that the money comes from
somewhere else or someone else.
If you want to buy something, your money goes further if you pay for it yourself. If the city
buys it for you, then you have added a middle man and increased your cost. If the state does it,
you add two layers of middle-men. The further you send a dollar from home, the more layers of
bureaucracy through which it has to filter before it comes back to you. So keep your money
close to home, and cut out the middle men.
Next Lesson: Bureaucracy Must Grow