Classical Insights

Plutarch And The Supply Side

Dec 15, 2020 | Podcast | 0 comments

plutarch and the supply side

Plutarch famously stated, “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” After almost 2000 years of history his words seem to have some pressing implications for our current political economy. What happens when governments seek to create a dependent class through massive welfare spending? What are the implications of UBI and of fiscal policies that encourage people not to work? In this episode we look at the link between Plutarch’s insights and Nathan Lewis’ exploration of how government policy can shape the moral tone of a nation.

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Jonathan Doyle Nathan Lewis    

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FULL TRANSCRIPT

📍

Well, Hey everybody, Jonathan Doyle with you. Once again, welcome aboard to the supply side podcast.

Thank you for sharing your time here with us. We’ve had some great early guests in the shows, so hope you’ve had a chance to listen to the wonderful interview with Nathan Lewis. And last week we got some really wonderful insights from Mike Kendall. So make sure you’ve checked out those first two episodes.

Many more fantastic guests to come in the time ahead. As we explore macro, we explore supply side, we explore classical economics. And on that sort of classical theme today, I want to talk to you a little bit about Plutoch. I don’t know how often you think about Plutarch. I’m a little bit unusual actually about maybe six months ago.

For some reason, I don’t know where I bought it, but I got a copy of Plutarch’s Roman lives and maybe other people are reading, you know, I don’t know J K Rowling before they fall asleep, but I tend to go to sleep reading Plutarch’s Roman lives. It’s fascinating stuff because his prose is extraordinary.

It’s just so lucid, so clear, so easy to read. And it’s really, as if it was written yesterday, his analysis of the great Roman lives, the senators, the emperor is quite extraordinary. So please talk to the course was actually Greek. He wrote Greek lives, but if he’s very well known for his Roman lives was a.

Spent his time as an ambassador, as a magistrate, and then later in his life, he even spent some time as a priest at Delphi or Delfi, depending on how you like to pronounce it. So Plutarch has left us with, I guess, a wonderful snapshot of humanity. Of the political system of political economy, but it’s amazing how fresh those insights are.

And I think there’s a couple of key things that he offers us on the analysis of a supply side and some of the things that we observe happening in our modern political economies. Now, the most obvious one, you may have heard this it’s relatively well-known. He famously said that here’s the quote and imbalance.

Between rich and poor is the oldest and most fatal ailment of all republics. One more time. He said an imbalance between rich and poor is the oldest and most fatal ailment of all republics. Think of all the things he could have said. Think of all the things that plutonic might’ve observed over his life.

And, uh, of course studying so deeply the lives of other greatest Orical figures, he could have said, well, you know, the greatest ailment of republics is corruption or the greatest element of republics is foreign enemies, or, but he brings us to this awareness that the thing that eventually destabilizes the great empires, the great republics is ultimately this widening gap between rich and poor.

And if we look at some of what’s happening at the moment in our global political economy and the macro world, we are definitely seeing that. I mean, the stats that I hear on a daily basis from different things that I tune into it quite extraordinary that, uh, that gap and, uh, of course many implications for what that means in terms of social instability.

But another great quote from Plutarch, which kind of relates to this gap between white and poor. And some of the issues that we’re seeing was used actually by Ronald Reagan in his incredibly well-known 1964 speech a time for choosing now, he quoted Plutoch directly in this speech and he says, here Plutoch warned the real destroyer.

Of the liberties of the people is he who spreads among them, bounties donations and benefits. And you love that the real destroyer of the liberties of the people is he who spreads among them, bounties donations and benefits at its most basic level. What he’s alluding to is that the more free stuff we tend to throw around the place.

Then we create obvious disincentives for people to work. And even deeper than that, the deeper kind of ontological question is about the importance, the nobility, the, I guess my background sort of in philosophical anthropology. So are there. Things that are inherent to personhood and his work. One of those things that is inherently important in the human journey, so that if we create a culture where people are disincentivized from meaningful work, then we create, I mean, as Plutoch says here, you know, we create the, we destroy the liberties of the people by sending among them or spreading among them bounties donations and benefits.

So the more free stuff that is given out to the wider populace. Rather than encouraging them to take, you know, all forms of personal responsibility. And we find that it destabilizes our society. And if we think of the huge amounts of. QA stimulus, the amount of stuff that’s spinning around the place at the moment.

A lot of talk about UBI, universal basic income here in Australia, where I’m recording. There’s been, you know, huge payouts, different systems here. We’ve had a job keeper system, a job seeker system, and, uh, the people, some people have been very supportive of it, but the impact on the national balance sheet has been utterly unprecedented.

So. I want to talk a little bit about that quote, you know, the real destroyer of the liberties of the people is he who spreads among them, bounties donations and benefits. I want to bring you back to Nathan Lewis’s book here, the magic formula, and it’s on page four in the, uh, when he’s introducing the four word magic formula, which is simply low taxes and stable money.

And something about this really struck me when I first read it. Nathan was kind of saying that the more that we structure. A culture around these classical economic lines, the magic formula of low taxes and stable money, a certain moral tone begins to pervade society. I really struck me. I was quite interested in, and I’m going to read you a little bit of what Nathan had to say, and I really hope you’ll get yourself a copy of the magic formula because it’s just such an important book.

But he says this isn’t page four, when it is easier for the ambitious to gain wealth and status from productive enterprise in the private economy, then through various forms of predation and plumbed of others, commonly involving government coercion and corruption. Then government corruption and predation become uncommon and relatively easier to isolate and punish when they do occur.

A moral tone pervades society, high investment creates a high demand for labor, lower unemployment, less dependency on welfare programs, stronger families, rising wages, better workplace conditions. And in general prevents the spread of communistic and socialistic ideologies of all sorts. Governments are popular and thus stable, abundant tax revenues fund, a powerful military defense of the successful state becomes a moral imperative.

The country becomes unconquerable. Now listen to what he says next. When a country doesn’t have the magic formula, which we know is low taxes and stable money. All these processes work in reverse. So I’m trying to link this here to what plutonic had to say about when governments getting the business of, uh, unhelpfully manipulating the political economy.

What happens? He says high taxes in themselves are a form of confiscation of private property property. Inevitably, any everyone acts to avoid these Texas one way or another? And I’ll jump down to this last line here, where he says, governments attempt to put kite the urban poor with welfare programs, but this costs money, which must then be confiscated from the remaining productive classes.

So let’s link that, right? So PLE TOK says the real destroy of the liberties of the people is he who spreads among them, bounties donations and benefits. Now that was written in the first century. Now listen to what Nathan says. He had, government’s attempt to plicate the urban poor with welfare programs, but this costs money, which then must be confiscated from the remaining productive classes.

So I’d be interested for you if, for anybody to post some stuff in the comments here, because it’s interested in your thoughts on this as. Now I’m the first to say that there needs to be an appropriate safety net. Let’s something we can all agree on. There’s often a critique of supply side or classical economics that people are indifferent to, to human suffering or the suffering of the poll.

We just need to let the rich get richer and everything will trickle down. Now that’s obviously, that’s not what we are advocating. There’s definitely a need for a safety net for people who through genuinely no fault of their own. Injury and capacity other forms of misadventure and tragedy need the support of, you know, all of us in some form, or we need to make some viable contribution to the wellbeing of those who cannot provide for themselves.

But what plea talk is saying, and what Nathan’s alluding to is that when governments get in the business of creating huge welfare programs and creating a dependent class, I mean, they’re obviously thinking about the dependent classes. It just keeps voting for whoever’s, you know, turning on the tap, right.

So are a political economy, a democratic systems are undermined because people are simply voting for the government. That’s going to provide them with the greatest amount of large. Yes. So. That’s all I wanted to talk about in this episode was to share with you that insight from plutonic, that as we create a huge dependent class, as we print more money and throw it around, like it’s Christmas, what are the implications for that on the moral and the social aspects of our society?

I’m interested in that question. So I think Plutarch is smarter than me. So when I read those quotes and I read Nathan’s wisdom and his research is extraordinary, I think these are very important things that are not being considered. I just, you know, now with, with having children of my own, I, I sort of.

Really safe seek to inculcate the ideas of work and entrepreneurship and, uh, you know, those great ideals that, for example, you know, Many of the founding fathers of the United States, the ideas around thrift and effort and work. And one of my favorite words, sweat equity. Is that a word? It’s a phrase, it’s a conjunction.

So it was sweat equity, the actual hard work that’s done to bring meaningful goods and services into the world. All right. That’s it for me, it’s a short little thought provoking episode. Uh, hopefully we’ll have the comment section up here on the website@supplysidepartners.com. So if you’re listening to this on the website, or you’d like to leave a comment, come across the supply side partners.com go to the episodes page.

You’ll find this episode on Plutarch and maybe let’s have a conversation about what people think on these sorts of 📍 topics, please, wherever you listen to podcasts, wherever you listen to Amazon music, Spotify, Google podcasts, Apple podcasts, just type in the supply side or supply side podcast with Jonathan Doyle.

Yeah. You gonna find me there. We’re going to put some stuff up on YouTube soon as well. And, uh, yeah, reach out. If you want to email me personally, you can find me that, uh, jonathan@supplysidepartners.com, but that’s it for this episode, my friends, that’s it for life on the supply side, stay tuned. We’re gonna have some more great guests.

My name’s Jonathan Doyle. This has been the supply side podcast. And I’ll have another episode for you very soon.

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