Guest post by Dr. Gary North
“Necessity is the mother of invention.”~ traditional saying
“Subsidies are the father of stagnation.”~ prospective traditional saying
Of all the mindsets that keep people from attaining a level of success that matches their capabilities, this one is by far the most crippling: “something for nothing.”
It appears in many venues, wearing many disguises. But wherever people accept any version of it as their guiding principle, their output will rarely match their potential.
The mindset begins in the family. Squalling babies expect attention. They usually get it.
Growing up involves abandoning the mindset of an infant. This sometimes takes 80 years, and sometimes longer. By then, the infant is on Social Security and Medicare. He finds that politicians respond just as his parents did: They will do anything to stop the squalling. So, the squalling never ceases. It gets louder.
The infant of whatever age does not perceive that something for nothing doesn’t exist. Someone always must pay. The infant should eventually learn that when he becomes capable of acting on his own behalf and at his own expense, he is expected to take more responsibility.
Charity begins at home. So does responsibility.
But there are few things in life resented more than responsibility.
So, people seek ways to remain the recipients of something for nothing. They learn to beg. They learn to wheedle. They become guilt-manipulators. They work the system, whatever the system is.
The mark of a productive system is its resistance to wheedling. The closer it comes to the principle of “value given for price received,” the more it encourages productivity.
Parents who do not move their children into responsibility and out of wheedling are asking for a lifetime of wheedling.
When millions of families reward wheedling as a way of life, the wheedlers find that they can continue to receive something for nothing: value given for wheedling imposed. The cost of wheedling appears to be low. The value received is high. This increases the supply of wheedling.
Yet the cost of wheedling is very high: thwarted productivity. For every year of missed productivity, the cost of catching up becomes more expensive.
A WAY OF LIFE
Rule: It is easier to spot wheedling in others than in ourselves. A word to the wise is sufficient. On the other hand, “A reproof entereth more into a wise man than an hundred stripes into a fool (Proverbs 17:10).
Speak not in the ears of a fool: for he will despise the wisdom of thy words (Proverbs 23:9).
People who expect something for nothing find that their circle of associates narrows over time. People who grow tired of wheedling leave the circle in which wheedlers congregate. This leaves the wheedlers to wheedle only each other. The economic returns from wheedling fall as productive people leave the circle.
This can be a circle as small as a club. It can be as large as a nation. The pattern is inescapable. Productive people seek to avoid wheedlers.
Wheedling is an attempt to gain something for nothing.
In contrast, there are people who ask for a favor who are ready to provide favors. This is not wheedling. It is a way of paying for value received. Members are in a kind of tax-free mutual association. The tax authorities make barter taxable, but barter is very difficult to trace. Mutual favors are generally invisible to tax collectors.
The problem comes with the permanent flow of one-way favors. What works for infants does not work for adults unless they are wards: in effect, permanent infants without legal responsibility.
The constant demand for one-way favors marks a failed career and a failing society. It is even worse when the favors become legislated. The favors move from favors to legal entitlements. This institutionalizes failure.
I lecture every month to unemployed people in the inner city who are in a privately funded program that pays them the minimum wage to learn how to get jobs. Single mothers in these classes are far more motivated to go out and get a job than the young men are. The young men have been living off the welfare system all their lives. They did not get guidance from fathers in their homes. There were no fathers at home. They are sometimes addicted to drugs. They do not possess habits of self-discipline. Some drop out of the program within a week. Even those who complete it and get jobs quit work within three weeks. They find it too difficult to adjust to responsibility.
This is a long-term cost of the something-for-nothing mindset.
WE DON’T KNOW OUR LIMITS
Most people fear failure more than they desire success. This mentality keeps people in their place — their self-imposed place.
Fearing failure, people do not voluntarily venture outside their comfort zones. But these comfort zones serve as major barriers to entry. These self-imposed barriers protect the market share of established participants.
The fact is, we don’t know all of our limits. Also, as we improve our performance, these limits move outward. Yes, there are personal limits, usually physical but sometimes mental. Rocket science is a restricted profession. But there are so many potential areas of progress in every person’s life that there is no excuse for not pushing these limits outward.
Whenever we do this, we open up areas of service.
Most areas of service can become financially profitable. There are usually lots of people with money out there saying, “Serve me; I’ll pay!”
People who spend their lives saying, “Serve me, but I won’t pay!” have great difficulty recognizing those people with the mindset of payment for services rendered. So, they do not become effective entrepreneurs.
The limits facing a child in grade school are overcome, one by one. This parentally imposed process continues for years. The greatest value of education is its lesson that perceived limits can usually be overcome through self-discipline and close attention to detail.
A student could decide to get failing grades at age six. If he sticks to this program of passive resistance, he can defeat any educational system. But very few children adopt this mindset. It tends to appear in the lives of future drop-outs when they hit junior high school. At some point, they quit high school.
At some point, we all quit school, but this does not mean that we quit learning. The habits gained in school stay with most of us. We keep pushing our limits.
One mark of personal failure is easy to describe. A person who reviews his last five years discovers a grim truth: “There is nothing I can do today that I could not do five years ago.” This is the retirement mentality.
Periodic self-review is vitally important. It lets us see if the retirement mentality has set in. We have to take active steps to overcome it whenever we perceive that we have succumbed to it.
I suggest that you sit down at a table, get pencil and paper, and make a list. Here is what should be on it.
Profitable things you do today that you did not do five years ago. Why?Profitable things you do today that you could not have done five years ago. Why?Profitable things you would like to do in five years that you are not doing today. Why?Profitable things you would like to be able to do, but cannot do today, five years from today. Why?
The first two lists will give you confidence. You need confidence to fill in the second two lists.
Then you need a step-by-step program to achieve whatever is on the second two lists.
People who refuse to do this exercise — the vast majority of my subscribers, let alone non-subscribers — will continue to bump along. They will do whatever they have been doing in an unsystematic way.
It’s not that the particular skills you will pick up over the next five years will necessarily make you rich or famous. You may find that these skills and their output are non-marketable in future conditions. But the self-discipline of writing down medium-term goals and devising quarterly-reviewable plans to achieve them will make a big difference in your attitude toward achievement. If you pursue your plan, you will find that you extend your limits outward by overcoming what you regard as today’s limits.
HOW WILL YOU PAY?
Life is mainly a trade-off between money and time. You must pay in money or time. You will be paid in money or time.
We buy time with money. Medical care over the last century has extended our life expectancy, mainly by reducing the rate of infant and child mortality. This has cost a lot of money. One of the marks of a rich society is that the share of national income going to health care rises.
Why is this a mark of progress? Because, as we make more money — increase our productivity — we allocate a larger percentage of our income to health care. The value of each additional dollar of income increases our desire to buy more time for ourselves. So, the percentage of our incomes devoted to leisure — “free time” not subject to the income tax — and health care rises.
This is a trade-off. When you make more money, the value of your remaining time in relation to your income rises. You buy more time.
It is a mark of economic ignorance when someone criticizes modern America for the high percentage of its national income spent on medical services. This is a sign of its success, not its failure. The Medicare system does skew this figure upward, but even without government-funded medicine, the percentage would rise with increased productivity.
When a business starts out, the owner must do everything. He has little money. So, he has to pay in time. As the business grows, the owner spends more money to hire lower-output time services. He re-allocates his now more valuable time to higher-value projects. At some point, he retires. (Death is a form of retirement.)
The money-value of our time rises when we increase our non-time income. It value also rises as it trickles out. We can earn more money. We cannot do much to earn more time.
THE POOR-BOY MINDSET
This is a variant of something for nothing. The poor boy thinks that financial success is based on saving money. He does not understand that it is based on a different principle altogether: risking money to make even more money.
The poor boy seeks for free whatever will make him money. He thinks that the world owes him a living. He thinks that money grows on trees. He thinks that others owe him money. He is afflicted by the something-for-nothing mindset.
One form of this is the free-information syndrome. He asks others how to make money. He asks for free advice.
He does not understand this principle:
Free advice is worth twice what you pay for it, if you’re lucky.
He expects rich people to donate their time to tell them how to get rich.
Rich people know this, so they distance themselves from these people. Rich people know that their advice will not be taken, or if taken, will be applied incorrectly. So, poor boys then seek information from others in their own circle. But everyone in this circle is struggling.
The assumption that valuable information is free may be the greatest single error in economic theory. Thomas Sowell’s book, , is a detailed study of how this false assumption promotes government intervention and thereby reduces freedom and efficiency.
If you want to fail in life, follow this guideline.
Expect others to give you things.Expect others to share valuable information with you for free.Expect buyers to pay you for your information.Make money as a middleman: get information for free and sell it at a profit.
The worst abusers are those who come in the name of a shared cause. Decades ago, Murray Rothbard wrote about this. The libertarians are always asking for a subsidy from other libertarians in the name of the cause.
Christians are even worse. When I went to work for the Foundation for Economic Education (FEE) in 1971, I was told by the editor of The Freeman, Presbyterian Paul Poirot, that FEE had to impose a policy for the book-shipping room. The book room’s shippers were not allowed to send books on credit to any organization with “Christian” in its name. FEE had learned from years of bad experiences that the likelihood of payment was low.
Christians are used to getting fed intellectually for free. Meanwhile, they rarely tithe. So, they have difficulty breaking out of the poor-boy mindset. They think:
Jesus died for my sins. You should suffer for me, too, for the sake of the cause.
This may apply to their money: “no payment for services rendered.” It may apply to their work performance: “It’s good enough for God, who owes me some slack, and so do you.” The poor-boy mindset keeps them in low-level positions all their lives.
There are some Christian groups where this mindset is missing. Armenians are good businessmen. They are “cash on the barrel head” people. They’ll sell it to you wholesale if the order is large enough, but don’t expect any favors. They are tough competitors. As my Jewish roommate told me in 1962, “When the Armenians moved in, the Jews moved out.” (He was speaking of Fresno.) The Dutch are not much afflicted with the mindset. Neither are the Scots.
Pay for services rendered. This includes information.
When people seek something for nothing, they will eventually wind up with nothing for something. This is true of personal agendas. It is also true of political agendas.
So, here is a list of rules that will help protect you from nothing for something.
There is no pot of gold at the end of the rainbow.
There is no tooth fairy.
There is no Santa Claus.
The $19.95 secret formula doesn’t work.
The government is not here to help you.
This article has been first published here: https://www.lewrockwell.com/2006/10/gary-north/something-for-nothing/