It helps to understand economic theory if we first understand the vast difference between the public and private sectors — between government employment and non-government, between government and the individual.

The public sector is local, state, regional, and federal government.  Under monarchies or totalitarian regimes, the public sector was all.  Everyone was subject to and controlled by a government entity.  In times prior to the formation of our constitutional republic, the private sector was limited to small groups who bartered. 

The private sector is every non-governmental citizen.  The private sector is the basis of capitalism, and its principle is the definition of free trade: willing buyer, willing seller, no outside coercion.  There is so much profundity in simple terms.

The immense power of individual freedom and private enterprise was not unleashed in the world until our nation was founded and our government was placed under the Rule of Law, the Constitution.  This principle is based on one primal concept: the individual is sacred. 

From this premise, freedom and capitalism were born.  For the first time, a nation created the Rule of Law to control its government, not its people.  The simple but profound meaning of our constitutional republic is the unalienable right to ownership of property.  And if we own property, no one has the right to take it.

On the other hand, the underlying premise of Keynesian economics, as well as socialism, fascism, and communism and their illegitimate stepchild, the UBI, is that spending by the government is better than spending by the private sector, the individual.  Therefore, under the UBI, it is all right if the government takes your property to distribute it to another.

The Keynesians, the totalitarians, the left, miss one critical point: all federal income derives exclusively from taking, not creating.  The vast majority of federal revenue derives either from taxation or placing the tax-paying citizen into debt.  It takes from the private sector and transfers to government.  Granted, we all get some benefit, but at what cost?

It is only in a free society, which sanctifies the individual and controls the government, that free enterprise, in the form of capitalism, can thrive.

Capitalism is the most efficient form of an economy because each individual does what is best for that individual, his family, his neighborhood, and his nation — in that order.  Capitalism incentivizes the individual to provide a product or service that another person, of his own free will, decides to buy.  The successful provider of the product or service obtains a profit.  He is motivated to be efficient and provide the best product by earning an income and generating a profit.  The buyer keeps the seller honest by deciding to buy or not buy the product.  Enlightened self-interest motivates both parties to a transaction. 

This is going to challenge a lot of readers, probably generate some anger.  Just consider it.  The glue that holds sway with the left, communists, socialists, etc. is a fallacy.  They are so sure of the righteousness of their cause that they will not consider another idea.  In this, they are not far from the Christian right.  Ever notice how the left uses the concept of “together”?  It’s a powerful position because we all want to be part of something bigger, better, more fulfilling.  But the downside of togetherness as a concept is the loss of individual freedom.  In order to be part of the masses, you have to adhere to their way of thinking and doing.

Everyone hears the siren call of nationalism, religion, and party.  That’s natural.  I’m just suggesting that we add another layer in the thought process. 

The following is not a digression; it leads to this premise.  The concept of “together over all” requires that the individual give his separateness, his inalienable rights, to the whole.  His individual nature.  And when we do, then it is a small step to saying that what you own is not fair, and you should give it up.  Now, that is perfectly fine if the person, the individual, decides, of his own free will, to give it all away.  What is so wrong with the perverted concept today of Equity, UBI, the government, is that an entity can take your property from you by force.  The distinction is subtle but profound: do you decide, or does the mob decide?

When we talk about solving problems, it is wrong to assume that a solution will come from any public-sector (government) entity.  The role of government is defined, profoundly, in the laws that govern the government.  That is all the government should do.  Nothing more.  Frankly, the government cannot solve problems.  Private citizens can. 

The error in Universal Basic Income is simple.  How can any entity that takes from the citizen ever sustain itself?  All government income is derived from taking from one citizen to give to another.  That model is not sustainable.

Our current excesses in taxation, regulation, debt and spending by our government are not sustainable.  They are crushing the free enterprise that provided so much for so many.  Yet we keep electing politicians who tax and spend.  We allow an Administrative State to crush free enterprise through regulation and fines.  We let a terribly inefficient government entity control our health care, banking system, and energy production and insert itself where it has no right to be.  To channel Reagan: Government is not the solution it is the problem. 

Take the position that we are individuals, that we are given certain inalienable rights.  You will be a minority, and the “together crowd” will call you greedy, but at least you will remain true to your nature as our Creator intended.  And you will be true to the inner path.

Jay Davidson is founder and CEO of a commercial bank.  He is a student of the Austrian School of Economics and a dedicated capitalist.  He believes there is a direct connection joining individual right and responsibility, our Constitution, capitalism, and the intent of our Creator.

Image: tomaszmichalkania via Pixabay, Pixabay License.