Have you every wondered where all the wealth comes from? If you had to live alone, off the land, what standard of living could you hope to achieve? It might be nice for a few days, but in fact we do like food stores, radio, dental and medical services, and all the other things that being part of a society brings us. Nobody could know how to do all the things that give us this standard of living. But each of us has certain skills.
The way we all share those skills and exchange money for providing them is called the Economy. Not all economies are good. Germany was split into two halves following World War II, and each half was run with a different economic system. West Germany used capitalism. East Germany used Russian communism. After 40 years, the results were: Prosperity and optimism in the West, Poverty and pessimism in the East.
In the Virgin Islands, we have easy access to American-style capitalism, which appears to be a good basis for an economy. All of our laws are preprogrammed to guide us toward success in the American dream of "Life, Liberty, and the Pursuit of Happiness". We can and should pursue that dream with our own Caribbean flair.
Who understands the economy? It is so massive, the sum of millions of transactions every day. No one mind can grasp the economy in all its detail, not politicians, not even economists.
> Producing is Power
But that doesn't mean the individual is lost and powerless. The key to prosperity in our economic system is Producing. Simply producing something that another person wants, and accepting money for it, sets the economy on an upward path. Any object or service that is produced and traded willingly for money does the trick.
Both Employers and Employees in private industry know this from direct experience. They have discovered that business is the process of producing something that can be traded for money. They know that whenever they produce a product, be it a meal, a calypso song, an insurance policy, or a mango, they can trade it for money. That's business. And all the business taken together is the economy.
Those in private industry know about competition. If they produce good mangoes, or insurance for a fair price, they will succeed and perhaps flourish. if they produce poor mangoes or insurance, they will falter, until they respond and improve their product.
This process is noble. When you participate in it, you are not only putting bread on your table, you are energizing the whole economy.
An interesting side point is that the economy works best when a seller of a product charges the maximum amount that the buyer will willingly pay. In other words, profit is good and healthy. A seller may sell for less out of generosity, but it is not necessary to set the economy rolling.
Private Sector rules apply the Public Sector, too
Government workers produce products, too. They give out information, issue licenses, teach children, and safeguard the environment. In fact, they produce exactly those products destined for the public good that we as a people have collectively decided are so important that they cannot be produced naturally by private industry.
Until recently government workers have been remarkably insulated from competition, and any kind of pressure to produce. But the forces that act on private businesses act on the public sector as well; it just happens more slowly.
In part four we'll look at how the forces that energize economies might energize ours.