• Particular individuals, groups, or institutions may be sheltered from risk—but only at the cost of having someone else bear that risk.

• Risks are no less pervasive today but the perception of them, and an understanding of their inescapability, are not, because fewer people are forced to face those risks themselves.

• “Speculator” is not a term of endearment and “windfall gains” are viewed suspiciously, if not as being illegitimate, as compared to the earnings of someone who receives a more or less steady and prescribed income for their work.

• The rate of return on investment or on entrepreneurship is, by its very nature and the unpredictability of events, a variable return.

• Both profits and losses serve a key economic function, moving resources from where they are less in demand to where they are more in demand.

• If the government steps in to reduce profits when they are soaring or to subsidize large losses, then it defeats the whole purpose of market prices in allocating scarce resources which have alternative uses.

• Economic systems that depend on individual rewards to get all the innumerable things done that have to be done—whether labor, investment, invention, research, or managerial organization—must then confront the fact that time must elapse between the performance of these vital tasks and receiving the rewards that flow from completing them successfully.

Uncertainty

• The distinction between risk and uncertainty is important in economics, because market competition can take risk into account more readily, whether by buying insurance or setting aside a calculable sum of money to cover contingencies.

• When investors, consumers and others simply sit on their money because of uncertainty, this lack of demand can then adversely affect the whole economy.

• Whatever the merits or demerits of the particular policies tried, this approach generates uncertainty, which can make investors, consumers and others reluctant to spend money, when they cannot form reliable expectations of when or how the government will change the rules that govern the economy, or what the economic consequences of those unpredictable rule changes will be.

Time and Money

• The old adage, “time is money” is not only true but has many serious implications, it means that whoever has the ability to delay has the ability to impose costs on others—sometimes devastating costs.

• Slow-moving government bureaucracies are a common complaint around the world, not only because bureaucrats usually receive the same pay whether they move slowly or quickly, but also because in some countries corrupt bureaucrats can add substantially to their incomes by accepting bribes to speed things up.

• The greater the scope of the government’s power and the more red tape is required, the greater the costs that can be imposed by delay and the more lucrative the bribes that can be extorted.

• Merely by changing the age of retirement, governments can help stave off the day of reckoning when the pensions they have promised exceed the money available to pay those pensions.

• This violation of a contract amounts to a government default on a financial obligation on which millions of people were depending, but, to those who do not stop to think that time is money, it may all be explained away politically in wholly different terms.

• Where the government has changed the terms of private employment agreements, the issue has often been phrased politically as putting an end to “mandatory retirement” for older workers.

• Sometimes time costs money, not as a deliberate strategy, but as a by- product of delays that grow out of an impasse between contending individuals or groups who pay no price for their failure to reach agreement.

• Remembering that time is money is, among other things, a defense against political rhetoric, as well as an important economic principle in itself.

Economic Adjustments

• Time is important in another sense, in that most economic adjustments take time, which is to say, the consequences of decisions unfold over time and markets adjust at different rates for different decisions.

• The fact that economic consequences take time to unfold has enabled government officials in many countries to have successful political careers by creating current benefits at future costs.

• Economic activities for dealing with inescapable risks seek both to minimize these risks and shift them to those best able to carry them.

• Those who accept these risks typically have not only the financial resources to ride out short-run losses but also have lower risks from a given situation than the person who transferred the risk.

• Whatever statistical or other expertise the speculator has further reduces the risks below what they would be for a producer.

• It is especially important to understand the interlocking mutual interests of different economic groups and, above all, the effects on the economy as a whole, because these are things often neglected or distorted in the zest of the media for emphasizing conflicts, which is what sells newspapers and gets larger audiences for television news programs.

• When an impending or expected shortage drives up prices, much indignation is often expressed in politics and the media about the higher retail prices being charged for things that the sellers bought from their suppliers when prices were lower.

• A market economy allows accurate knowledge to be effective in influencing decision-making, even if 99 percent of the population do not have that knowledge, however, the 99 percent who do not understand can create immediate political success for elected officials and for policies that will turn out in the end to be harmful to society as a whole.

• Time can turn economies of scale from an economic advantage to a political liability.

• “Rustbelts” are not simply places where jobs are disappearing. Jobs are always disappearing, even at the height of prosperity, the difference is that old jobs are constantly being replaced by new jobs in places where businesses are allowed to flourish.

• As in other situations, a market economy allows accurate knowledge to be effective in influencing decision-making, even if 99 percent of the population do not have that knowledge.

• A government which proceeds as if the planned effect of its policies is the only effect often finds itself surprised or shocked because those subject to its policies react in ways that benefit or protect themselves, often with the side effect of causing the policies to produce very different results from what was planned.

• Foresight takes many forms in many different kinds of economies.

• During periods of inflation, when people spend money faster, they also tend to hoard consumer goods and other physical assets, accentuating the imbalance between the reduced amount of real goods available in the market and the increased amount of money available to purchase these goods.