Economic Multipliers (32)

Do you know what these are?

They help CREATE wealth in systems.

The concept ‘of benefit to all’ is not an economic multiplier.


It’s not a bad concept, mind you. People do many things because they consider them to be beneficial to all. And many of the things they do because they act based on this concept create economic multipliers. It’s a ‘feel good … do good’ concept.

The problem is this: nothing is of benefit to all (or of the SAME benefit to all).

The sun that shines on one man’s crops and gives him vast yields might make another man’s farm an arid desert.

One single book that’s available in a library might give one man an idea that yields him a million dollars. Another man might read all the books in the same library and never have a single thought.

If the men are friends, the man who read all the books might feel cheated because he spent more time reading. The ‘one book’ man might have spent 20 years working on some ideas and selected his ‘single’ book based on years of education. He may have even been ‘searching’ for something. The ‘every book’ man might have just been reading to ‘fill in time.'

When a man who faithfully pays his taxes knows that he could not afford a plane ticket or perhaps even a car and sees tax money spent on road and airport services, those services don’t seem like they are of benefit to him. He may never think about the fact that product prices and postal rates are lower because those services are available. Even if he does, he’ll think that HE pays too much.

The field of economics tries to recognize that each choice involves tradeoffs BUT the more ‘multiplication’ (of dollars and resources) that you have in a system, the more choices you have and the less tradeoffs you have to make because there is more to go around.

Many people consider increases in taxes (and even taxes) to be a breach of their individual rights (I don’t although I do believe tax dollars should create social and economic value and if you ‘tax away’ wealth creation or fund social programs with debt, societies always get poorer).

But what if someone did believe you wanted to ‘breach their rights’ by ‘taxing away’ their wealth creation because you considered it ‘beneficial to everyone else?’ They would believe that within your concept of ‘beneficial to ALL,’ you left out THEM.

Effectively for them, you would be saying (without specifically saying it) – of benefit to YOU.

When people go looking for dollars for services that they consider ‘of benefit to all,’ I always believe they’d get farther if they concentrated on these things:

  • identifying all the things that create the bases of wealth which create the revenue streams which create positive economic multipliers (and increase the tax base)

  • identifying all the ways to reduce the negative economic multipliers (reducing the need for ‘unnecessary’ tax spending)

  • explaining to people how the dollars that are spent create specific value to them. (This is the greatest difficulty for all nations today because governments thought that you could fund social programs by borrowing money and if you have to pay back money that has never itself created a revenue stream, you've probably created an unsupportable program and unsupportable debt. It would be the equivalent of man who took on a mortgage for a home which he could not afford: He might be able to live in it for a while and enjoy the opulence but he probably won't be able to live there long. Not only that, the lender will still probably want their money back.)

There are always more dollars to go around everywhere when people are focused on ‘building’ versus ‘destroying’ wealth and you’d never actually want to live in a society that didn’t WANT people to be happy, healthy, productive and wealthy and have strong bases for all of those things.

But if you want people to believe something is ‘of benefit to ALL,’ make sure that you’re talking about something that truly is ‘of benefit to THEM.’