I Pencil by Leonard Read

4. I Pencil by Leonard Read “I am a lead pencil – the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.... Simple? Yet, not a single person on the face of this earth knows how to make me.”

5. I Pencil • “The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.”

6. Some basics of econ

7. what is capitalism? first, what is capital?

9. capital • Cash or goods used to generate income either by investing in a business or income property

10. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities

11. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities • The money, property, and other valuables which collectively represent the wealth of an individual or business

12. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities • The money, property, and other valuables which collectively represent the wealth of an individual or business • Human resources considered in terms of their contributions to an economy

13. capitalism

14. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand

16. Invisible hand • The idea that people acting in their own self interest in a free-market, price-controlled economy, can benefit society even without intending to. Describes the self-regulating nature of the free market. • “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”

17. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand • Capital, property and enterprises are privately owned and managed for a profit

18. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand • Capital, property and enterprises are privately owned and managed for a profit • New enterprises may freely gain market entry without state restriction

19. capitalism • Employment and wages are determined by the market and there will be some unemployment

20. capitalism • Employment and wages are determined by the market and there will be some unemployment • Some government intervention is necessary to guard against price fixing and collusion by producers

21. capitalism • Employment and wages are determined by the market and there will be some unemployment • Some government intervention is necessary to guard against price fixing and collusion by producers • The capitalist economy will likely follow a cycle of growth and recession

22. capitalism • Several basic forms:

23. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services)

24. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services) -- Laissez-faire (state plays minimal role)

25. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services) -- Laissez-faire (state plays minimal role) -- Anarcho (markets completely free from state)

26. What are the world’s freest economies?

27. What are the world’s freest economies? • Hong Kong, 20thconsecutive year

28. What are the world’s freest economies? • Hong Kong, 20thconsecutive year • Singapore, Australia, Switzerland, New Zealand

29. What are the world’s freest economies? • Hong Kong, 20thconsecutive year • Singapore, Australia, Switzerland, New Zealand • Canada, Chile, Mauritius, Ireland, Denmark

31. What about the U.S.?

32. What about the U.S.? • U.S. is 12th, down from 10th in 2013 • “The U.S. is the only country to have recorded a loss of economic freedom each of the past seven years… Substantial expansion in the size and scope of government, including through new and costly regulations in areas like finance and health care, has contributed significantly to the erosion of U.S. economic freedom. The growth of government has been accompanied by increasing cronyism that has undermined the rule of law and perceptions of fairness.”

33. what are world’s most restricted economies?

34. what are world’s most restricted economies? North Korea, Cuba, Zimbabwe

35. what are world’s most restricted economies? North Korea, Cuba, Zimbabwe Guess which are three of the poorest nations in the world?

36. what is socialism?

38. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state

39. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state • Some socialist societies direct the economy through a national plan, but most favor a mixed economy of public and private ownership

40. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state • Some socialist societies direct the economy through a national plan, but most favor a mixed economy of public and private ownership • Others (Social Democrats) advocate social welfare programs in a mainly market-based economy

41. socialism • Private property and private ownership of capital typically is restricted

42. socialism • Private property and private ownership of capital typically is restricted • The state usually decides what is produced, prices, incomes and levels of production

43. socialism • Private property and private ownership of capital typically is restricted • The state usually decides what is produced, prices, incomes and levels of production • Often, unemployment is abolished and employment is guaranteed for life

44. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia

45. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia • Lots of social democratic nations including Sweden, Netherlands, Norway, Finland, U.K.

46. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia • Lots of social democratic nations including Sweden, Netherlands, Norway, Finland, U.K. • Do we now include U.S. among social democracies?

47. U.S. owned/controlled companies • Fannie Mae, Freddie Mac, Amtrak, General Motors, Corporation for Public Broadcasting • Current administration financing hundreds of “green energy” companies… many of which are operated by cronies. Solyndra, A123, Amonix, Bright Source, Solar Trust of America, LSP Energy… all at room temperature

48. what is communism?

50. communism • The evolution of socialism