Is It Extreme? Or Is It “Over Trading”?
Concerning economics there is an important concept that often is ignored.
Aristotle’s Nicomachean Ethics is based on deciding whether actions are Extreme, Intermediate (Golden Mean), or Defective. When stores are filled and supply lines are unbroken people generally associate that with the Intermediate (Golden Mean). And when the stores are empty and the supply lines broken that is Defective.
That raises a question, “What is Extreme?”
The economic answer to that is the concept called “Over Trading.”
Adam Smith in “Wealth of Nations” explains “Over Trading” like this:
“If, not withstanding all this, gold and silver should at any time fall short in a country which has wherewithal to purchase them, there are more expedients for supplying their place, than that of almost any other commodity. If the materials of manufacture are wanted, industry must stop. If provisions are wanted, the people must starve. But if money is wanted, barter will supply its place, though with a good deal of inconveniency.
Buying and selling upon credit, and the different dealers compensating their credits with one another, once a-month, or once a-year, will supply it with less inconveniency. A well-regulated paper-money will supply it not only without any inconveniency, but, in some cases, with some advantages.
Upon every account, therefore, the attention of government never was so unnecessarily employed, as when directed to watch over the preservation or increase of the quantity of money in any country.
No complaint, however, is more common than that of a scarcity of money…This complaint, however, of the scarcity of money, is not always confined to improvident spendthrifts. It is sometimes general through a whole mercantile town and the country in its neighbourhood. Over-trading is the common cause of it.”
That is hardcore. Even when money is Gold and Silver if you have to go into exorbitant debt to support trade…you have “Over Traded.”
Now, soberly contemplate that all Federal Reserve Notes are “obligations” of the United States of America (18 U.S. Code section 8). They are debt. It is important to understand the difference between paper money (Greenbacks) and debt based instruments like the Federal Reserve Notes.
Our stores…our supply lines…are 100% funded by “obligations.” It would be an understatement to call that “Over Trading”…we need something stronger…like “New Speak” from Orwell’s “1984”…a good catch phrase like “Double Plus Over Trading.”
Yes, the concept of “Over Trading” is so wildly ignored as to make any criticism seem banal…dismissible by the unthinking. But the real danger is to not have a grasp on what is an Extreme using ethical standards.
Patriots have a hard choice concerning the future: “Support the system that provides some fairly awesome supply lines but does so based on ever descending debt” vs. “Equitable Allegiance where the government does not prop up trade with debt with the understanding that this course will severely curtail trade in the short term.”
There are a couple other important things to consider. One hundred years ago common people held “Stock Jobbers” in poor esteem; lazy scam artists at best. The Federal Reserve admits it was a major contributor to the Stock Market Crash on 1929 leading the whole country into a decade of Depression. Think about how the Main Stream Media pushes the Stock Market’s current status upon the people as a great indicator of the economy’s health.
Having all the money in the stock market is not health…it is gambling. Another thing to consider is the quality of life in the 1960’s with today. We started full tilt trading with communist China in the 1970’s and have been flooded…nay, fluffed with a tide of cheap consumer products. And that has all ridden on the back of the Federal Reserve Note “obligations.”
So what is the danger? There is no immediate tangible danger. The debts funding our “Over Trading” are not going to be called in. The National Debt is not going to be reduced or repaid. What? Is the government going to call in $10 trillion Federal Reserve Notes to reduce the National Debt? That is not going to happen.
There is a long term danger with our “Over Trading” and a humbling question that should be asked when you walk in a store, “Am I worth this?” Ethically, Aristotle would associate what we are doing with the Extreme and not the Intermediate (Golden Mean).
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