If you want to be a better voter, activist, lawmaker, or caretaker for the poorest and most vulnerable members of society, you have to understand macroeconomics.
The good news is that you can understand macroeconomics in just one lesson…
It starts with understanding what economic actions are and why they happen at all.
An economic action happens when people exchange resources with each other.
So why do people exchange at all?
Why do consumers exchange money for goods and services (consumables) from sellers?
Why do sellers exchange consumables for money from consumers?
Why do employers exchange money for services from employees?
Why do employees exchange services for money from employers?
If people exchange to get more money, then why do they want more money?
If people want more money to trade it for (buy) more or better (greater) consumables, then why do they want to buy greater consumables?
Because greater consumables gives them more satisfaction, and what satisfies is subjective and unique to each person for their own reasons.
That is the only reason why people exchange at all.
But what makes some exchanges better than others?
If people have to give up some possessions, time, or money (resources) and maybe some satisfaction in every exchange, which is the cost of the exchange, would people exchange at any cost?
Would anyone pay for a satisfying massage if it meant missing the even more satisfying experience of their child’s birthday?
So if people won’t make an exchange that costs more in resources or satisfaction than what they get in return, then will people always prefer to exchange at a lower cost?
If one seller charged a higher price than another for the same consumable, which seller will the consumer buy from?
Then wouldn’t the best exchanges cost the least?
So if people make the lowest cost exchanges to get the most subjective satisfaction possible, then the best exchanges maximize satisfaction at minimum cost, meaning the best exchanges maximize subjective profit.
Therefore good macroeconomics maximizes growth in subjective profit for the greatest number of people without reducing anyone’s growth in subjective profit…
and bad macroeconomics reduces at least one person’s growth in subjective profit, even if it maximizes everyone else’s growth in subjective profit.
But no one can measure the subjective profit each side gets from an exchange…
And each person gets different amounts of unmeasurable satisfaction from a consumable…
So it makes no sense to try adding up everyone’s subjective profit to measure its growth or drop.
But there’s a way to best approximate changes in subjective profit…
Most consumables available cost the buyers money, and the units of money it costs to buy a consumable is the consumable’s price…
So the closest way to measure changes in total subjective profit is to measure the changes in the prices of consumables sold.
Therefore the most approximate macroeconomic goal is to get everyone the greatest consumables possible for the lowest price.
Now the amount and quality of consumables that can be bought at a price is the money’s purchasing power…
If people can buy greater consumables at equal or lower prices than before, money’s purchasing power rises…
If they can buy fewer or worse (lesser) consumables at equal or higher prices than before, money’s purchasing power falls.
And the type of money that the greatest number of people in a society can use to buy the most consumables available is that society’s currency…
So every society’s most positive, measurable economic outcome is to maximize the growth of their currency’s purchasing power.
Therefore maximizing currency’s purchasing power growth (CPPG) most approximately maximizes the greatest number of people’s subjective profit without reducing anyone’s growth in subjective profit.
That makes maximizing CPPG the most valuable, measurable macroeconomic goal…
It gives the poorest, most vulnerable people the greatest essential consumables possible whether they pay with their own money or get donations, so nothing would help them more than maximizing CPPG.
Therefore, good macroeconomics maximizes CPPG for all currency holders, while bad macroeconomics reduces CPPG for any currency holder even if it maximizes CPPG for other currency holders.
Anything that reduces CPPG reduces everyone’s welfare while maximizing it maximizes welfare for the most people.
In other words…
If it maximizes CPPG, it’s a good macroeconomic policy.
And if it hinders CPPG, it’s a bad macroeconomic policy.
Now it’s hard to measure which macroeconomic policies maximize CPPG directly because a consumable’s quality is subjective…
But the logic of economic laws reveal which of these policies maximize CPPG or not…
And economic law proves that policies that enforce everyone’s private property rights almost always maximize CPPG, while policies that violate these rights almost always reduce CPPG.
Private property rights are the rights to exclusively control any non-stolen object they own, which outlaws theft, assault, battery, rape, murder, property damage or any other obstruction of property usage.
These rights maximize CPPG because they incentivize the most people to produce the greatest consumables possible while preserving the most consumables available.
That reduces the prices of the greatest consumables at the fastest rate for the most currency holders indefinitely, maximizing CPPG.
But policies that violate private property rights reduce CPPG because they disincentivize or prevent some people from producing the most greater consumables possible.
That raises the prices of some greater consumables higher than otherwise, reducing CPPG.
Here’s how some policies that violate private property rights reduce CPPG…
Taxes, including tariffs, reduce CPPG by transferring money from people that invest into or earn money by producing greater consumables efficiently to people who don’t…
This disincentivizes and may prevent many people from producing as many greater consumables efficiently, pushing up prices of greater consumables and denying taxpayers access to as many of them, both of which reduce CPPG.
Government spending reduces CPPG because it transfers resources away from producing the most urgently wanted greater consumables to lesser consumables at prices higher than consumers would pay otherwise…
This also makes the most urgently demanded greater consumables less available or raises their prices, reducing their purchasing power which reduces CPPG, especially for groups that receive less or no government spending.
Government regulations that violate private property rights reduce CPPG because they add man-made costs to investments, reducing investment into jobs, tools, and businesses that produce greater consumables efficiently.
This either delays or restricts the production of some greater consumables, which may push up their prices and prevent some upcoming and urgently demanded greater consumables from being produced at all, both of which reduce CPPG.
Currency inflation, such as fractional reserve banking, reduces CPPG directly by creating money and credit without producing consumables, so more money chases the same consumables which raises their prices…
and people who receive the new money early have the incentive to produce fewer greater consumables efficiently and spend more before prices rise, which both reduce CPPG, especially on people who receive the new money later.
Welfare and other programs that forcefully transfer resources from richer to poorer groups, like Medicaid or food stamps, reduce CPPG because they disincentivize or prevent both groups from producing greater consumables…
The richer earn less for producing greater consumables, disincentivizing them from producing as many greater consumables and preventing them from investing as much into producing more later, both of which reduce CPPG.
The poorer get money without producing greater consumables, disincentivizing them from producing as many greater consumables as soon as possible or at all, which reduces CPPG.
They also spend more on fewer consumables available, driving up prices to where more forced redistribution may be repeatedly needed for constantly increasing prices of essentials, constantly reducing CPPG at faster rates.
War reduces CPPG because it destroys available consumables and the people and resources needed to produce greater consumables, spiking prices and plummeting the quality of many greater consumables sold, reducing CPPG…
War also forcefully transfers people and resources towards conducting war and away from producing greater consumables consumers want more urgently, raising their prices higher than otherwise and again reducing CPPG.
Price controls reduce CPPG because price ceilings incentivize early buyers to overconsume, creating a shortage for later buyers and depriving sellers of the money needed to produce enough to end the shortage, reducing CPPG…
And because price floors directly force the consumable’s price to be higher than otherwise, which directly reduces the purchasing power of all currency holders which reduces CPPG.
Even price floors on wages, like minimum wage laws, are an extra compliance cost that delays or prevents unemployed low-skilled laborers from producing the greatest consumables at the lowest cost, reducing CPPG.
Nationalization, where only the government produces a consumable, plummets CPPG because they have no real profitability signal that shows they are making the consumable well or efficiently enough, wasting resources endlessly…
This can plummet the consumable’s quality and skyrocket its price, while increasingly taking away resources from producing other greater consumables, raising all of their prices and plummeting CPPG.
Government-guaranteed loans, like student loans, reduce CPPG because producers are incentivized to raise the consumable’s price to the higher maximum loan amount that people qualify for due to government backing…
This raises its price and transfers resources away from producing other greater consumables to producing more of that consumable than would have been otherwise demanded, which both reduce CPPG.
Immigration controls reduce CPPG because fewer people can relocate to where they can produce the most urgently wanted greater consumables efficiently, leading to lesser consumables produced, which reduces CPPG.
Patents reduce CPPG because they prevent producers who did not create the patented consumable from producing it, blocking the competition needed to make greater versions of consumable sooner, reducing CPPG.
Slavery plummets CPPG because slaves can’t freely choose and orient themselves to efficiently produce the greatest and highest demanded consumables possible, reducing CPPG…
and slaves can’t maximize their income and satisfaction on their own terms, nor choose which greater consumables they want to consume, which plummets their purchasing power and thus plummets CPPG.
Segregation reduces CPPG because it blocks segregated groups from accessing greater consumables produced from other segregated groups, reducing the consumables many currency-holders can buy, reducing CPPG.
Lockdowns plummet CPPG because they inhibit the production of greater consumables that are locked down and greater consumables that depend on locked-down consumables to be made, plummeting CPPG.
Union strikes reduce CPPG because they attempt to force employee wages to increase under unprofitable conditions, reducing employer profit and thus profit used for investing into producing greater consumables, which reduces CPPG…
and striking may also force companies to reduce the total employees they employ now or later, preventing many laborers from producing as many highest priority greater consumables as efficiently as possible, reducing CPPG.
Population Controls reduce CPPG because they reduce the number of people producing greater consumables later, reducing the total greater consumables that would have been produced otherwise, reducing CPPG.
And if we keep going, we’ll see that pro-free market policies almost always maximize CPPG while the anti-free market policies almost always reduce CPPG.
And since desires are endless and everyone can always get more satisfaction, maximizing CPPG will always be the best macroeconomic policy.
So to sum it all up…
If it maximizes CPPG, it’s good macroeconomic policy.
In just one lesson, you now understand macroeconomics and how to be a better voter, legislator, activist, or otherwise better care for everyone, especially the poorest and most vulnerable among us.
The rest is understanding how macroeconomic laws affect CPPG they way do…
And there are many other resources for that.
For now, go make a positive difference with your new understanding.