The simplest human economy is the hunter-gatherer economy. In a hunter-gatherer tribe, the women and children scour the hinterland for edibles, while the men usually form a hunting party and try to spear some moderate sized animal. If the tribe fails to do so, they starve. So they hunt and forage in order to gratify their desire for self-preservation.

As we learned simple agricultural concepts and other primitive crafts like pottery, the tribal unit undertook these tasks and added them to hunting and foraging, because they made self-preservation easier. Gathering berries with a basket is, after all, easier than doing it without. But labor was still undifferentiated. If a family wanted a pot or a basket, they had to make it themselves, all while still going into the hinterland to spear a wild goat so they could eat.

This, you can imagine, wasn’t very efficient. Every member of the family had to be trained in every task and perform every task, meaning no one ever really became an expert in anything they were doing. But – and we assume this happened gradually – eventually people realized that if they specialized in only one task and did none of the others, and their neighbors specialized each one in only one task and did none of the others, everyone could trade what they produce in order to obtain what they need. Moreover, because everyone now spends seriously more time doing one job, they understand what they are doing much better, and produce much more. A full time potter will now produce far more pottery in one fourteen hour day than fourteen other people would ever have been able to make if they only made pots one hour a day, and also grew grain, wove textiles, made tools, etc., etc. all the rest of the day. This expert knowledge provided by specialization caused a major increase in production, which was one of the first milestones on the way to our modern economy.

Now, barter systems have a systemic problem. Say a farmer has a little extra grain, and he needs to trade it for some pots. Say a potter has a little extra pottery, and needs to trade it for some linen. Say a weaver has a little extra linen, and he needs to trade it for some grain. No single trade between any two people can get both those two people the good they need. In a barter system, two people both need to have a good the other one wants. This doesn’t always happen. It is on account of this that eventually people found it useful to trade goods for weights of metals, and eventually, minted coins, and later, paper currency. With currency, only one person in a trade has to have a good the other one wants. The other simply has to have money, which everyone wants, because everyone will accept it.

That explains more or less how we developed from a hunter-gatherer economy to a modern, currency-oriented economy, although I’m skipping a huge number of steps. I’ve only selected the basics necessary to make three points about work, wealth, currency, and charity.

First, government cannot run the economy like a charity while expecting the economic system to work like an economic system. Our entire modern economic system has the aforementioned for its footing, a system which exists for self-gratification. Charity is the antonym to self-gratification. It is not the purpose of those who work every day to pay for someone else’s comfort. If not working provides the same self-gratification as working, people won’t work. Generosity is certainly a virtue, and it’s great when someone gives to help another, but that’s not the purpose for which our economy exists.

Second, currency isn’t wealth, and giving people currency is not the same thing as giving them wealth. Currency is a token which people choose to believe is worth something, but it is only worth something to the degree that people are willing to believe it is worth something. Now if the government’s response to poverty is to give the poor more currency, that’s primarily going to devalue the currency. If society has believed that a certain unit of currency is worth a day’s wages, but suddenly everyone has extra currency, and they spend it, and workers begin selling more and more goods, so that they’re earning way more than a day’s worth of wages in a day (simply on account of volume, although increased demand will also drive up prices causing even more income), society will simply decide money isn’t worth what it used to be worth, and both wages and prices will rise. Now, with both wages and prices rising about equally, people will still have roughly the same purchasing power, so giving the poor money didn’t improve their position at all, but savings have been eroded by the devaluation of money. If charities give a little money to the poor, it won’t be enough to trigger this. But if governments try to apply this approach to all of poverty, it certainly will.

This transitions well into the third point: the only real way to increase a person’s wealth is to increase his work output or increase his work’s value. This entire economic system is based on the principle that everyone will specialize in one kind of work and trade their goods. Therefore, wealth comes from working. If in the last scenario the government hadn’t given the poor money, but all the unemployed had instead obtained jobs, they would all be producing goods which the businesses they worked for would sell, getting money with which to pay their paychecks. We still have a large number of people receiving money they didn’t have before, just like in the former scenario, but there is no devaluation of currency, because that money is divided among a now larger number of stores, a larger number because of the new businesses employing the unemployed.

Now if you know Latin, you know the title of this note is “Against Charity.” And I’m not really against charities. They catch people who fall through the cracks. But if the government is to have a job, it can’t be to catch people who fall through the cracks, it has to be to just patch the cracks. If the government is to be concerned about the economy (and I’m not saying to what degree it should or shouldn’t be involved, or to what degree, at least not here) for these reasons it has to address the matter of employment predominantly, and leave charitable ambitions to other entities. The key to wealth from within the economic system is steady employment, nothing else.