Let's be honest... the tentacles between the eyes is basically an elephant trunk.

The benevolent octopus of capitalism reaches out to comfort all.

Poverty is the default state. It requires no explanation for its origin.

Prosperity comes from improvements to the means of production. Those improvements require capital, which accumulates through savings. Savings are the result of under-consumption. To put it another way, if nobody saves, there is nothing to borrow or spend on improvements.

When people are able to save, produce, and trade freely, prosperity tends to come automatically. Unfortunately, the free market has many opponents. There are two main groups. One is groups seeking to stifle competition, such as established businesses, cartels, and labor unions. The other is control freaks upset that people are buying what they want instead of what the control freaks want. The amount of power these groups have set the limit on how prosperous a community can be.

Instead of letting the market create prosperity automatically, these groups stall the process with absurd, self-serving rules and then demand that the government step in to stimulate the economy when stagnation results. A good example of one such rule was a former law which outlawed the sale of margarine colored to look like butter. Dairy farmers complained this was “unfair” competition, and so demanded a law to stifle their competitors. Some states even passed requiring margarine to be dyed pink to make it less appealing. A margarine dye law stayed on the books in Quebec until 2008. Margarine was invented in 1871.

The stagnation that results from the accumulation of stupid laws creates pressure for a central bank and periodic attempts to “jump-start” the economy, usually by expanding credit artificially and/or increasing government spending. These credit expansions create a temporary boom followed by an inevitable bust.

The best way to understand this is to imagine a restaurant owner in a small town. One week, the circus comes and he has many new customers. For some reason, he doesn’t notice they are all clowns and lion tamers. He decides to open another restaurant to handle all the new business. But soon the circus leaves town, and he is forced close the second restaurant. In this example, it is all the fault of the restaurant owner’s poor judgment.

In another case, bad weather can cause farmers to lose money. But if every farmer in a country has a bad harvest for years on end, it is unlikely that the weather is the culprit. The farms of the USSR had been some of the world’s most productive for centuries. Yet as soon as the communists took over they proceeded to have 70 years of bad harvests, which the communists blamed on the weather. A common joke in the USSR was that if communists took over the Sahara, in a year, there would be a shortage of sand.

It is the same in a recession when thousands of businesses of all kinds lose money at the same time. The question becomes: why did all these different businesses make the same mistake at the same time? Why did so many people choose to start or expand businesses doomed to fail? The answer is that credit was expanded artificially by a central bank.

Poverty and economic crises are man-made. When the Roman emperors wanted more money without raising taxes or cutting spending, they issued coins with less silver. But since the new coins were worth less, prices rose. The Emperor Diocletian tried to stop inflation by fixing prices. A Roman historian at the time observed he might as well have commanded the wind not to blow.

Just as inflation has been blamed on everything except an increase in the amount of money, economic crises have blamed on everything except credit expansions by central banks. The worst economic crisis in history happened a mere 13 years after the creation of the Federal Reserve, America’s central bank.

The idea that printing money, expanding credit by fiat, or increasing government spending will somehow magically lead to prosperity is no different than trying to drink yourself sober or put out a fire with gasoline.

It is high time for the proponents of flat earth economics to relent and repent.

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

― Robert A. Heinlein