저자: PeterSchiff · 외국인
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결론: 경제성장의 핵심은 생산성 향상이며, 저축·혁신·비교우위 특화가 이를 뒷받침하고 정부의 과도한 개입과 인플레이션 정책은 경제를 망친다. 생산성과 경제의 목적: 경제는 한정된 자원으로 인간의 수요를 최대한 충족시키는 것이며, 생산성 증가가 핵심 목표다. 저축의 역할: 혁신과 대형 프로젝트에는 저축이 필수이며, 저축은 비상금·소비·대출·투자 네 가지로 쓰이는데 소비는 성장에 가장 나쁘고 대출·투자가 성장에 기여한다. 비교우위: 각자 가장 잘하는 것에 특화해 교역하면 여가시간이 크게 늘어나고(약 10~11천일 → 18~20천일), 국가 간 분업도 생산성을 높인다. 생산성이 오르면 가격은 하락해야 한다. 정부의 역할: 안전·사법 등 기본 서비스는 정부가 제공하지만, 정부 지출은 결국 납세자의 지출이며 의료·인프라·교육 등 정부 공급은 정치적 이유로 저축을 비효율적으로 쓸 수 있다. 금융위기는 정부의 주택정책(패니메이·프레디맥)이 일부 원인이라고 주장. 은행과 금리: 은행은 안전한 저축과 자본 배분 기능을 하며, 금리는 시장이 정해야 한다고 주장. 연준은 정치적 판단에 따르고 단기 결정을 내리며 인플레이션 정책은 저축을 줄이고 소비를 부추겨 부를 채무자에게 이전한다고 비판. 신용·레버리지의 남용은 역사상 5대 경제위기의 주요 원인이라는 점을 강조. 종목·자산에 대한 구체적 가격 예측 발언은 없음.
다듬은 글
Over the past century or so, academics have made great progress in many areas, including: Albert Einstein's progress on the theory of relativity Alexander Fleming and his discovery of penicillin Francis Crick and James Watson discoveries about DNA, etc However ... There's one field of research where we haven't made much progress, and that's within the field of economics For the investor, a growing economy is an important assumption for his long-term returns.
And that is why this is ... A top-five takeaway summary of the book "How an Economy Grows and Why it Crashes", written by Peter Schiff And this is The Swedish Investor, bringing you the best tips and tools for reaching financial freedom through stock market investing Takeaway number 1: The primary goal: increasing productivity First, we'll go through three concepts that are very important for an economy to grow and then we'll handle two factors that are important for an economy too, but that, when mishandled, can cause it to crash A good definition of an economy is this: "The effort to maximize the availability of limited resources to meet as many human demands as possible" We demand quiet a lot ...
Basic demands include things such as food and shelter, but we also demand more advanced things these days - such as smart phones that come with the latest technologies and super-cars that come with great acceleration and environmental bragging rights Say that ... it previously took people an average of 0.2 working days to meet their daily demand of food 1000 days to meet their demand of getting a shelter, 10 days to get that neat smartphone and 600 days for the super-car But today it only takes 0.1 days, 500 days, 5 days and 300 days to meet those demands The economy has then been growing An increase in productivity has allowed food, shelter, smartphones and super-cars, that of course are limited in their quantity, to become more readily available to the general population This is the goal of an economy.
Think about it! Compared to before, you can now get a house, a super-car, 10 smart phones for all your relatives and food for 1000 days and still have 50 days left for leisure time compared to buying just 1 house before! This must be a good thing. Just think about how many days you can spend reading books in a nice hammock!
Super-cars don't produce themselves at the price of 300 working days instead of 600 days just by coincidence There are a few prerequisites for this. It usually takes new tools, which come from innovation, which in turn comes from savings and risk-taking No person is particularly innovative if he has to work all day just to fulfill the basic need of putting food on the table for his family!
For an economy to increase its productivity then, which is the primary goal, savings are required, and this is what we'll cover in the next takeaway Takeaway number 2: Savings benefits everyone Why savings are important for an economy to grow is quite easy to illustrate Peter Schiff provides an excellent illustration in How an Economy Grows and Why it Crashes, about three fishermen living on a deserted island But for that you'll have to get the book yourself However, just think about it like this: For every large or semi large project - there must be savings If no one in the economy saved up more than a single day's worth of money, how would then, for instance ..
... large infrastructure projects be built? ... new medicine be discovered? ... industrial innovations be made? Such projects cost up to many thousand days of savings from many thousand individuals to complete Now, all savings are not created equal Some help the economy grow faster than others There are 4 primary ways which savings can be used.
They could be: - Saved for a rainy day - Consumed for extra pleasure - Lent out to someone in need; or - Invested The first alternative doesn't really help the economy grow directly, but it is a great buffer for times of turmoil Some individuals, companies and governments have learned this the hard way during the current pandemic Their second alternative doesn't help the economy grow.
This is the worst use of savings "The economy doesn't grow because we consume more, we consume more because the economy grows" According to Peter Schiff, thinking that we can spend ourselves out of economic troubles is the main problem with the current paradigm within the field of economics Consuming more than we can afford today will eventually be troublesome, either for our future selves, or, for our children Loans are the third alternative, and if they are made for business purposes rather than for consumption, they can really help an economy grow Just think about the aspiring entrepreneur.
Without savings from either himself or someone else, he or she can't possibly build his own business because he'll need a steady stream of income to put food on the table for his family The fourth alternative, which is investments, is great for the same reason that business loans are great By looking at these 4 alternatives, it's easy to see that a capitalistic economy works The lender wants interest payments and the investor wants dividends, and these are both selfish motives, but they will have positive spillover effects to everyone else in the economy too If the person who has savings wants to earn more on those savings, he'll have to invest or lend them out to others A very important concept here is opportunity costs Just like pretty much everything else, savings are limited Savings that are used for consumption could have be used for business loans or investments It is therefore harmful for the growth of our economies that most governments are running monetary policies which incentivize consumption but disincentivize lending and investments I'm getting ahead of myself here, but we'll get to this later!
Takeaway number 3: Comparative advantages Once upon a time, there existed an economy where only food, shelter smartphones and super-cars really mattered (in other words not too different from the one that we have today) In this economy, only four people lived: Able, Babel, Cable and Durable They were all equally interested in food, shelter, smartphones and super-cars What they weren't though, was equally efficient in producing these items Babel, Cable and Durable could produce one day's worth of food by working 0.2 days, while Able could produce it in just 0.1 days Babel was the most efficient shelter producer.
He could build one in only 500 days, while it took the others 1000 Cable was a gifted smartphone designer and it took him just 5 days to produce one while it took the others 10 days Similarly, Durable was the most skilled super-car maker at a production time over 300 days, instead of 600 days like the others If they use their talents in an optimal way, they should let Abel produce the food, Bable build the shelters, Cable assemble the smartphones, and Durable make the super-cars Over a lifetime, they each demand food for about 30,000 days, 5 houses, 500 smartphones (yes, these guys are quite clumsy) and 10 super-cars Now, if they don't use their skills, or "comparative advantages" in an optimal way, and produce everything themselves, they would each have about 10-11,000 days of leisure over a lifetime However, if they use their comparative advantages and let each do what he is best at and then trade goods with each other, they'll have between 18-20,000 days Simply put - if workers in an economy specialized at what they are best at, the productivity of the economy will grow Comparative advantages are important for the economy within the country, but it is also important for the total economy across the globe For instance, if King and Ling, who come from an outside country of Able, Bable, Cable and Durable would be capable of producing food in just 0.05 working days and shelters in just 250, everyone could have even more leisure time Moreover, more savings would be available for business loans and investments which could increase the productivity of the economy even further down the line You might ask: But what would then happen to Able and Bable?
Well, with some savings or potentially a business loan from Cable and Durable, they would probably discover that everyone is also interested in buying some fancy clothes and fancy watches, now that there's so much leisure time Remember this: the goal of an economy is not to provide jobs. The goal is to maximize productivity In an economy where productivity is increasing and comparative advantages are maximized, the prices should actually be decreasing Ling can sell shelters at the price of 350 working days and still make a profit, while Bable had to sell them at the price of 600 working days to make the same profit Takeaway number 4: The role of the government There are a few services that arguably should be provided to everyone in an economy, and that, for one reason or another are poorly provided by a free market Almost everyone agrees that two such needs are those of personal safety and justice For example.
Abel, Bable, Cable and Durable might consider giving away some of their production to hire Enable for security, and Fable for justice Enable and Fable would then be hired as this country's governmental employees One important thing to notice here is this: The government itself doesn't produce the basic needs of the economy, it uses the taxpayer savings to provide services For this reason, government spending is the same as taxpayers spending.
Never forget this. A bit more questionable is when the government starts to provide services like health care, infrastructure, education and banking (we'll get to bank in the final takeaway) Sure, these are all services that are demanded in a modern economy, there's no discussion about that. The question is just if the government can provide them in a more efficient way than the marketplace can Consider this: Politicians want to be reelected For this reason, governments spend savings where it is politically most critical to do so Private lenders, on the other hand, only spend savings where it is economically defensible to do so Because of this, private lending is more efficient in bringing out the strongest species and speed up the evolution in society Once again, the key concept is opportunity costs Savings are necessary for the economy to grow, as we've seen previously, but they come in limited quantity And remember that the government is nothing more than a facilitator of private savings If the savings are wasted, the economy grows much slower than it could have In some cases, it even causes it to crash During the financial crisis for instance, it could be argued that the government played an important part in the downfall The boom that occurred in housing prices was partly caused by governmental actions The federal interest rates had been lowered to make borrowing cheaper and banks were incentivized to issue riskier mortgages as they knew that they could sell these loans immediately to two governmental entities called Fannie Mae and Freddie Mac In other words - the government decided that American private savings should go towards an upgrade in the housing standards of its people, especially people with limited finances Let's just say that this turned out to be a very poor use of savings If you want to hear more about the whats and whys of the financial crisis, check out my summary of "A History of the United States in Five Crashes" Takeaway number 5: The function of banks Banks facilitates two great functions in society: - They allow people to save in a safe way; and - They may take more educated decisions when it comes to how the savings should be allocated than the average individual In this way, banks increase the productivity of savings The interest rates or payments to those who decide to lend their money to banks are decided by three factors primarily: - A desire to maximize returns on deposits - A fear of losing capital on risky projects - A time preference for consumption Here's an interesting thing in the economy today If the government would decide that the price of a car is a fixed $20,000, or that a smart phone must cost $500, what would you say about it?
You would probably yell: Communism!! We do not enjoy when the government intervenes with the price and production of goods as, after all, we've seen what it has done to economies in the past However, for some reason we are okay with the government setting the price of savings and loans In the US, the Fed is effectively determining the price of money by deciding the interest rates at which all other banks can borrow and lend at through the Federal Funds Rate Here are three reasons of why it would be a better idea to have individual banks decide on this rate themselves, much like in any other part of a modern economy, rather than having a centralized entity deciding on it The federal representatives do not have the same "skin in the game" as the owner of a bank has For this reason, they make short-term decisions that the business owner of an individual bank would never do It is very questionable if the centralized Fed can make more informed decisions than the aggregate of millions of independent decisions (well, at least more or less independent) in the marketplace The Fed typically makes decisions that are based on political, rather than economical factors The chairman of the Fed, for example, is nominated by the President of the US So the fate of the President and the Fed chair are intertwined, and I bet that you understand yourself what type of consequences this might have The inflationary monetary policies that are followed today are harmful to our economies They are harmful because they incentivize spending instead of saving This is important: "Inflation is simply a means to transfer wealth from anyone who has savings in a particular currency to anyone who has debt in the same currency" As we saw in takeaway number 2, savings are necessary for an economy to grow Moreover ...
Credit and leverage being used in a stupid way has been one of the primary reasons of all of five of the greatest economical crashes in history If you'd like to hear more about these crashes, and possibly become a little bit more aware of what might cause them in the future, head over to my summary of the book " A History of the United States in Five Crashes" Cheers guys!
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