Can More Government Lead to Less Government?
One of the greatest strengths of libertarianism is its ideological consistency. It is also libertarianism’s greatest weakness. When I went back to college in my 30s to complete my BA and MA in history, I found that a lot of aspects of libertarian thought, as intellectually satisfying as they were, simply didn’t fit the facts of history all that well.
The early American republic, for example, wasn’t the paragon of laissez-faire capitalism that many libertarians imagine. State and local governments were extremely active in regulating commerce of many sorts, from alcohol sales restrictions, to granting of monopolies, to generous subsidies to business enterprises. The federal government played an aggressive role in promoting westward expansion (much to the detriment of the Indians) — and through a series of musket contracts, consciously and intentionally dragged U.S. firearms manufacturing from a collection of cottage craftsmen to a modern industrial base.
One of the examples of satisfying but dangerous abstractions is that it is an article of faith that minimum wage laws are always bad. There’s no question that minimum wage laws can have destructive effects — especially for unskilled workers. There is a strong argument that minimum wage laws have played a part in causing high black teenage unemployment. Without the early experience of work, and with the inadequate public school education that many poor blacks receive, it is surprisingly easy to drift into young adulthood with no job skills — and no prospect of acquiring any.
The last several months, I have been working one week each month in Bend, Oregon. Oregon is a rather unusual state in one respect: there is no self-serve gasoline. I am just old enough to remember when gasoline was 29 cents a gallon, and a young man wearing a uniform fueled you up, washed the windshield, and offered to check the oil and tires. Gassing up in Oregon is a bit like going back in time.
The reason that more government will never lead to less government is that more government is about more power, an aspect overlooked by the author. Having more power will not lead to a situation where those in power want their power reduced. In fact the more power that people get, the less they want to reduce it and the more they need to increase it…and increase it they must, because power means control, and ultimate power means absolute control, which can brook no dissent. I suggest tha the author read F..A. Hayek, L. von Mises, Milton Friedman and other libertarian poli-economic philosophers. In the end it comes down to one is willing to take the risks in life to retain individual freedom, to retain options or to lose them and become a slave of the state. There is no perfect system in an imperfect world, and it is better to accept the reality that some will do very well, some will merely prosper, some will fail and some will die because they cannot cope. s Keynes said, un the end we are all dead anyway. When someone comes up with a utopian system that allows for individual freedom and requires no one in charge with the power to coerce others, let me know. But until then, more government only means even more government, which requires more power which requires more coercion to maintain and eventually complete slavery for the masses.
I don’t know why you love poverty so much that you want to make people live on the fringe like this.
Minimum wage should be $1,000 per hour. We’ll all be rich rich rich I tell you. Think of the taxes these people can pay.
….LINO.
I’m against any federal minimum wage; no Constitutional authority is given for this power.
The thought of reducing public largesse through wage control is quite enticing and presented well, but “more government, carefully used” is an oxymoron in my view. But the author nails it regarding poor education.
I believe targeted education is the key to reducing dependency. The agencies that distribute welfare need to become teachers and recruiters. Remember the old adage about teaching the people to fish instead of feeding them?
What if dependents were taught how to combine their resources by following a proven business model? I speak from personal experience here.
Financial statements are combined (could list certain benefits as income), neighbors incorporate and obtain loans, distressed properties are purchased at wholesale cost, crews are hired, properties are fixed up and rented or sold, repeat until financially independent. This is a solid plan anytime, but opportunity abounds in this economic downturn.
Areas of poverty could be reclaimed a block at a time. Neighborhood pride would return as more people get a stake in the community. As property values rise, profits would be put into vacant commercial buildings, and more jobs will follow as the neighborhood solidifies. Why gangbang when landlord and business owner jobs are available?
Welfare to work in a nutshell. By spending to educate, less government dependency will result.
Do you think Pelosi and Reid, spearheaded by Obama, will put this excellent plan on the table?
The bad far outweighs the good regarding minimum wage laws. There might be a small handful of individuals who truly benefit over the long run—but the vast majority are severely harmed. The available studies show conclusively that jobs disappear when employers must pay the higher rate. They find other ways to get the job done. Something is also really wrong when somebody is still employed in a minimum wage job after a relatively short period of time. Opportunities for advancement are numerous in the United States. Libertarians like myself are not utopians. We realize that often we must accept the “good enough.”
More government eguals less government is the academic kind of statement that leads to trouble with applied to real life.
When was the last time more government was carefully used?
Minimum wage should be $1,000 per hour.
You seem to have missed where I wrote: “It isn’t enough to just arbitrarily increase minimum wage by some amount that makes us feel good.”
When was the last time more government was carefully used?
Do you think World War II qualifies? Not perfectly, but better than waiting for the Japanese and Germans to land.
I suggest tha the author read F..A. Hayek, L. von Mises, Milton Friedman and other libertarian poli-economic philosophers.
I’ve actually read quite a bit by all of these writers, and greatly respect them. But the real world is sometimes a bit more complex than beautiful theories.
I’m against any federal minimum wage; no Constitutional authority is given for this power.
I could tell you the rationalization used for it (through the interstate commerce clause), but that’s what it is. State regulation of wages is a lot more clearly constitutional.
The thought of reducing public largesse through wage control is quite enticing and presented well, but “more government, carefully used” is an oxymoron in my view. But the author nails it regarding poor education.
I believe targeted education is the key to reducing dependency. The agencies that distribute welfare need to become teachers and recruiters. Remember the old adage about teaching the people to fish instead of feeding them?
Both of these require more intelligent legislators than we currently elect. And the conversion of AFDC to TANF in the 1995 welfare reforms that Congress passed are an example of intelligent people (Newt Gingrich, in that case) pushing for a more thoughtful and sensible use of the government to reduce dependency.
Something is also really wrong when somebody is still employed in a minimum wage job after a relatively short period of time.
It often indicates a substance abuse problem, or a mental deficiency, or a lack of ambition. It’s still better to have that person employed, and less dependent on government programs, rather than more dependent.
There might be a small handful of individuals who truly benefit over the long run—but the vast majority are severely harmed. The available studies show conclusively that jobs disappear when employers must pay the higher rate.
As I acknowledged, there is a real hazard that raising the minimum wage destroys jobs, especially for those with educational deficits. But my point was this: which causes more harm in the long run: people who are unemployed and dependent on the government for everything, or people who are employed and perhaps only dependent on the government for Medicaid?
Just out of curiosity: do those of you who believe that less government is always better believe that public education can’t improve employment opportunities for the poor? Yes, public education is expensive compared to private education–but part of what drove support for creation of a tax-funded publication education system in the 1830s and 1840s in states like New York and Pennsylvania was the presence of a large population of impoverished urban immigrants. Overwhelmingly, children were getting an education anyway, but the poorest members of the society didn’t have the resources to pay for schooling. They also often had no great interest in seeing their kids educated.
Sorry, Mr. Cramer. While I understand the point you’re making, it is far, far better to have an unskilled worker making $8/hr and receiving public supplements, than the same individual not working at all and living off benefits, because his labor isn’t worth $10/hr. The biggest, hairiest unintended consequence of the ‘War on Poverty” is the complete dissociation of income from work, entitlement from effort: the culture of dependency.
“the conversion of AFDC to TANF in the 1995 welfare reforms that Congress passed are an example of intelligent people (Newt Gingrich, in that case) pushing for a more thoughtful and sensible use of the government to reduce dependency.”
Unfortunately TANF was effectively repealed by the Porkulus this year.
And pray tell, where do you think the money comes from for higher wages? Business either reduces the number of workers or increases their prices, thus negating the “value” of a higher minimum wage. How about the government does what it is really supposed to do, protect the individual rights of life liberty and property. Charity is more than capable of taking care of those with “substance abuse problem, or a mental deficiency, or a lack of ambition.” And even lack of ambition should not be supported, they should wither and die like they have chosen to do.
More government eguals less government is the academic kind of statement that leads to trouble with applied to real life.
Except that I didn’t say that. I said that more government can lead to less government. Even libertarians acknowledge that while an excess of government causes less individual freedom, a complete absence of government can cause less individual freedom as well. Without a method of adjudicating contract disputes, commerce shrinks to what can be done on the immediate exchange system. Without a criminal justice system, accusations of criminal conduct can rapidly turn into lynch law.
While I understand the point you’re making, it is far, far better to have an unskilled worker making $8/hr and receiving public supplements, than the same individual not working at all and living off benefits, because his labor isn’t worth $10/hr.
As I pointed out, if you raise minimum wage too much, it causes unemployment. I was also pointing out that Oregon’s otherwise irrational “no self serve” law has the effect of creating jobs for those who might otherwise be unemployed.
And pray tell, where do you think the money comes from for higher wages? Business either reduces the number of workers or increases their prices, thus negating the “value” of a higher minimum wage.
Someone doesn’t understand economics as well as he thinks he does. Determining the exact result of a regulation is a bit more complex than that. Businesses don’t set prices based on costs; they set prices based on demand for the product or service–whatever price balances supply and demand. Raising costs will reduce profit margins. If the profit margin is reduced enough, a business may stop operation. If enough businesses in a particular market cease business, the remaining businesses can increase prices because of the lack of competition. But even a 2% increase in costs in a business with a 20% net profit margin won’t shut down the business. (If the net profit margin is 5%, it very well might.)
And even lack of ambition should not be supported, they should wither and die like they have chosen to do.
What a perfectly libertarian thing to say. I hope that you don’t wonder why the Libertarian Party hasn’t taken over the country yet.
How about the government does what it is really supposed to do, protect the individual rights of life liberty and property.
You realize that only about 10% of Americans (if that) agree with that formulation?
Charity is more than capable of taking care of those with “substance abuse problem, or a mental deficiency, or a lack of ambition.”
It would be better to have them at least partly self-sufficient, would it not?
“More government = less government” is the idea behind a pillar of Marxist thought, the “dictatorship of the proletariat”.
“More government = less government” is the idea behind a pillar of Marxist thought, the “dictatorship of the proletariat”.
Even libertarians (at least those who have thought about it a bit) recognize that some government is often more protective of individual liberties than no government. As an example, loan sharks operate outside the law, by offering loans at interest rates that exceed the legal limit. Because they can’t use the government’s criminal justice system to enforce these loans, they enforce them with hammers, blowtorches, and fists. Which is better? No government, a little government, or too much government?
Mr. Cramer, throwing money at schools has not improved them one iota. Check the data.
I home schooled my daughter and she is a stellar example of self-reliant parenting/schooling. I hate the government reaching into my world overtly. Fortunately, I live in WA state where it is legal to ‘home-school’. My daughter got her G.E.D. and her performance was in the highest 90th percentile.
The more ‘Government’ we have, the more people we need working their butts off in the ‘private sector’ to pay for said GOV programs and whatnot.
One thing that infuriates me is forcing parents to put their children in public schools in some states, or the rules that make it extremely difficult to home-school [if not impossible].
Luckily, I home-birthed my daughter and we didn’t put her in the ‘system’ from the get-go and that gave me a lot more freedom as far as home-schooling.
Clay, how will you feel when the big, bloated gov [because the 'bigger' it gets the more 'power' it gains] starts forcing sterilization, mandating forced labor, forced abortions, forced death aka denial of medical care, forced property take-overs, forced food purchase caps, forced gas caps, forced energy usage caps, forced EVERYTHING.
More government is NEVER a good thing.
“Still, consider this: someone making $8 per hour is scraping by every week. They are likely dependent on the government for assistance of some sort: food stamps; WIC; S-CHIP, maybe taking their sick baby to the emergency room because they don’t have health insurance.”
Except that over half of minimum wage earners are teenagers or young adults, they are almost never the sole breadwinner, and the majority will have higher paying jobs in a year or two.
These jobs are sensitive because they are in high-volume, low-profit margin industries such as retail or food service. They are not intended to produce a ‘living wage’, and the vast majority who have them use these jobs as supplemental income for a family or while in school.
True there are those who for one reason or another remain in these jobs, yet to raise the wage based on the myth that there is this army of $8.00/hr moms and dads out there waiting the the hospital emergency room with a sick child is just nonsense. There are poor and working poor but you cant eliminate that fact by raising the wage. It never has and it never will.
Raising the wage reduces the number of jobs for those trying to enter the job market, or needing supplemental income. That is not a “danger” it is a fact.
Spindok
Mr. Cramer, throwing money at schools has not improved them one iota. Check the data.
Where did I propose “throwing money” at schools?
I home schooled my daughter and she is a stellar example of self-reliant parenting/schooling.
Excellent. There are a lot of parents who do this, and do it very well. There are a lot of parents who could not do it well. And there are a fair number of parents who couldn’t do it, and would produce children as ignorant as they are.
One thing that infuriates me is forcing parents to put their children in public schools in some states, or the rules that make it extremely difficult to home-school [if not impossible].
I agree.
Clay, how will you feel when the big, bloated gov [because the 'bigger' it gets the more 'power' it gains] starts forcing sterilization, mandating forced labor, forced abortions, forced death aka denial of medical care, forced property take-overs, forced food purchase caps, forced gas caps, forced energy usage caps, forced EVERYTHING.
More government is NEVER a good thing.
What astonishes me is how many people here are reading what I wrote as a call for unlimited governmental power. This isn’t a binary decision: no government vs. death camps. There are certainly areas where we have way more government than we need. There are areas where the government’s actions aggravate problems, requiring more government. As an example, the way that Association Health Plans are regulated pretty well precludes such AHPs crossing state boundaries–creating a situation where small businesses that might otherwise be able to create large insurance pools, and thus provide group health insurance–can’t. And this drives the demand for the government to be in the health insurance business.
But there are situations where your statement “More government is NEVER a good thing” is simply an ideological claim–not a factual statement. Why is it that every group of settlers in American history set up some sort of government, even if only at the city level? In 1760s frontier South Carolina, along the trans-Appalachian frontier, a relatively small number of troublemakers created horrendous crime problems because there was no government.
Except that over half of minimum wage earners are teenagers or young adults, they are almost never the sole breadwinner, and the majority will have higher paying jobs in a year or two.
These jobs are sensitive because they are in high-volume, low-profit margin industries such as retail or food service. They are not intended to produce a ‘living wage’, and the vast majority who have them use these jobs as supplemental income for a family or while in school.
Fast food is actually a high profitable business. That’s why there’s no shortage of fast food places in America.
And yes, the majority are minimum wage for relatively short periods of time, before moving on to something else. And yes, most are not raising families on minimum wage. But a fair number are uninsured, even when they are making $10/hour a year or two later, and that’s driving a worse evil–the demand for universal health coverage.
Raising the wage reduces the number of jobs for those trying to enter the job market, or needing supplemental income. That is not a “danger” it is a fact.
It depends on what the minimum wage is relative to the market wage. And of course, part of what depresses market wages is the influx of illegal aliens.
“Even libertarians (at least those who have thought about it a bit) recognize that some government is often more protective of individual liberties than no government. As an example, loan sharks operate outside the law, by offering loans at interest rates that exceed the legal limit. Because they can’t use the government’s criminal justice system to enforce these loans, they enforce them with hammers, blowtorches, and fists. Which is better? No government, a little government, or too much government?”
It’s called personal responsibility. If you don’t want to pay huge interest (or have your thumbs broken) don’t take loans from shady, scummy people.
But hey, if the government relaxed their arbitrary interest limits, maybe then these shady loansharks could be dealt with inside the confines of the law!
Charity and self-sufficiency are not contradictory. Talking with my aunts and uncles growing up (they had been born pre-Depression era) brought out that before the regular public education system was in place the local Catholic schools had services to teach children up to 8th grade, which was at that time considered enough to get by on to get a job. What came with help via charity, however, was the feeling that you were mooching off the system and taking things that the truly needy required. The idea that you were NOT needy and that it was a shameful thing to go ON charity was one that was a prime motivator to GET a job.
Yes, you did have listless members of society who would live off of charity, but they were not enshrined as ‘victims of the system’ and often recognized that charity was about all they could understand in life. Those that went beyond that were looked down upon: ‘Get a job’ was not only an indictment of one’s condition but one’s unwillingness to take a hand in their own life to change that condition. For all the federal jobs programs that were available during the Depression, those taking such jobs were looked down upon as not having a ‘real job’. Government ‘support’ was seen as taking money, via taxes, from those who needed money to survive and giving it to those who should be finding worthwhile employment.
Pumping gas is a step up from nothing, and Oregon is more than free to explore that venue. There is no demeaning labor done to good ends. That said those individuals who are young could be learning a trade so as to get life-long sufficiency. To do that requires a good vocational system and supporting the manual and technical skills that make our world work properly. As our local, State and federal governments insist on book learning to the denigration of manual skills, charity based schools could be encouraged to help young people learn worthwhile manual skills. From the basics of carpentry, metal working, laying out electrical circuits all the way to food preparation and things like animal husbandry have value in our society and worthwhile job positions available in them. Learning a trade that allows one to build their skills is just as worthy, and considering the infrastructure of our Nation perhaps MORE worthy, than just book learning.
More government that does not support the basic underpinnings of our infrastructure and our society is not worthwhile government and is money ill-spent. And those with the highest skills should be able to work until they no longer want to and not be forced to retire from their professions. Forced retirement is a great ill and puts some of the most skilled and capably trained people on the planet out on golf courses. The retirement age used to be the average life expectancy… so you were lucky to live to it and have a few years left beyond it, not decades. That is not government money well spent, either, as those who have worked in their life have the opportunity to save and invest via modern means unlike our ancestors without the technology that allowed that to take place. And those who make more, invest in themselves and are encouraged to give to charity build society and demonstrate that being of value to yourself by having skills to earn your way is a worthwhile endeavor.
Such is what I learned from the generation born just before the Great Depression.
This ‘good idea’ for a little more government doesn’t seem to be working out too well.
Now don’t go telling all of these people that John Galt isn’t the Real America. If they wanted the real America, they’d read History books instead of blogs and Ayn Rand. No, even though there are some of us that have studied actual libertarianism, we don’t know anything… after all, they’ve listened to a few dittoheads, a couple talking heads and all the blogs they could gorge on. Government is evil and our government was never meant to do anything other than national defense and interstate commerce… who cares how our government was run under the first generation of Leaders… I mean its not like they fought for our freedoms or wrote the Cosntitution or anything.
America, where the left, right, libertarians and anarchists have all forgotten the actual political philosophy they claim, replaced instead with puerile nonsense. (Seeing ‘anarchists’ protest at a library which was losing federal funds is only slightly more funny than reading Pajamas Media).
*sigh*
Notice I said “MORE government is never a good thing”.
NOT “NO GOVERNMENT”
*bangs head against desk*
Checks and balances.
Yes, we also need ‘law’ too.
We need our constitution and ‘somebody’ or bodies to enforce that.
Aye yaye yayeeeeeeeeeeee!!!!!!!!!!!
*Gives Clay a spankin’*
Just for accuracy, NJ also doesn’t allow self-serve gas, I’ve never been able to uncover a consensus reason why.
Mr. Cramer,
The main problem that I can see with your argument is that it takes welfare as a given part of the total service package that government is supposed to provide. If you take that as a given, then it might make sense to impose additional controls to minimize the negative impact of the welfare services.
However, for a libertarian like me who believes that government ought to exist but only to protect my life and my property, your essay is just an example of more government leading to more government. Government expands in order to provide welfare services. Taxes are increased which causes some businesses to cut jobs which increases unemployment. Other people voluntarily leave the labor force in order to take advantage of the welfare system. So we take your advice and increase the minimum wage in order to reduce the incentive for leaving the welfare system. But this pushes other people out of jobs and does nothing to help those who were pushed out before. So we increase welfare and pass subsidies to businesses to encourage them to hire more. The cycle just goes on and on like that.
To respond to your specific example, you say it would be better to have a law that encourages people to work rather than more people on the welfare rolls. But if the gas stations in Oregon didn’t have to pay the workers to do a job that most people would be willing to do themselves for free, they would likely be able to lower the price for gas. This would give people more money to spend, make small businesses more profitable, and probably allow some small businesses that were previously unprofitable to start up, increasing employment.
Obviously there are a lot of “probably”s and “likely”s in that scenario. But if we are going to consider the cost of any particular government program, we have to consider opportunity costs. And obviously the opportunity cost for any make-work law is that money is spent on people who are doing work valued at $0 for most people instead of being spent on services that people actually value.
So for the sake of argument, let’s assume that the value of having your gas pumped for you is $5/hr, and the state sets a minimum wage of $8/hr. So to the extent that the extra $3/hr permits someone to get off of government assistance, that burden is shifted to a mix of the employer and the consumer. (The initial $5/hr is real wealth, because that’s the value of the service.) In this case, the minimum wage only works at all because I’m required by law to provide the pumping service.
There are also some administrative savings, as the $3 needn’t make the detour through the bureaucracy. Let’s also hope that this savings doesn’t permit us to fire any bureaucrats, because that would worsen the problem we’re trying to solve.
As I understand it, your contention is that there are significant non-economic benefits of having someone employed to do this job, and of that person’s being employed rather than idle, and of the $3/hr coming from the business rather than the government.
They don’t have to exceed the $3 itself, because the public’s paying that anyway in taxes to support Gomer regardless. That maybe, Gomer, instead of hanging around Mayberry, decides to enlist.
The main problem with your argument (aside from the black entry=level unemployment issue you’ve admitted to), is that there’s no real way to measure these benefits or to prove they exist. Moreover, we don’t even know that the benefits outweigh the additional costs, which could be even better-hidden.
Why stop at gas station attendants? Gomer enlisted and now he’s out serving his country. Why couldn’t we do the same thing for some young man who’d rather bag groceries?
Since these benefits are both unprovable and unmeasurable, isn’t it better if we begin with the presumption that it’s better not to interfere?
As for the issue of meddling state and local governments in the early republic, one can usually move to another city or state without damage to the country. Not so with federal mandates.
The main problem that I can see with your argument is that it takes welfare as a given part of the total service package that government is supposed to provide. If you take that as a given, then it might make sense to impose additional controls to minimize the negative impact of the welfare services.
It isn’t just me that takes that as a given. So does about 90% of the rest of the country.
However, for a libertarian like me who believes that government ought to exist but only to protect my life and my property, your essay is just an example of more government leading to more government.
My point was that within the context of “government has a responsibility to help those who in need” there are more intelligent and less intelligent solutions possible. If we can find a way to make the poorest Americans at least partially self-sufficient, that’s a good thing–and getting trapped in narrow ideologies (government is never a solution, welfare is only for lazy people, or poor people are always victims, single payer is the only solution to health care) may not accomplish those ends.
There are also some administrative savings, as the $3 needn’t make the detour through the bureaucracy. Let’s also hope that this savings doesn’t permit us to fire any bureaucrats, because that would worsen the problem we’re trying to solve.
Except those bureaucrats are probably college educated, or at least high school educated, and likely to be able to get some sort of productive job. Alas, the major beneficiaries of the welfare dependency state are probably not welfare recipients, but those who administer the programs. I remember some years ago doing the math on this and discovered that less than half of the AFDC budget actually went to AFDC recipients.
If I can find a way to knock some of the bureaucrats out of the way, that’s a good thing. That’s part of why President Nixon at one point suggested a negative income tax as an alternative to the welfare state–because it would put the money directly in the hands of the poor, without filtering it through several layers of bureaucracy. I’m not sure that it would have worked, but it was an example of thinking outside the box–and the poverty pimps were furious at him for suggesting it.
To respond to your specific example, you say it would be better to have a law that encourages people to work rather than more people on the welfare rolls. But if the gas stations in Oregon didn’t have to pay the workers to do a job that most people would be willing to do themselves for free, they would likely be able to lower the price for gas.
Why would they lower the price for gas? (Gasoline in Oregon is about the same price as in adjoining states–even though I pump my own gas in Idaho.) Remember: the price of gasoline (like other commodities) is set by the station owner at whatever price equalizes supply and demand and maximizes profit. If the station owner suddenly had aliens filling his tanks for free, he wouldn’t charge ten cents a gallon for it. The only way that he would reduce the price is if aliens started filling his competitor’s tanks for free, and they cut their price to ten cents a gallon.
It’s called personal responsibility. If you don’t want to pay huge interest (or have your thumbs broken) don’t take loans from shady, scummy people.
But hey, if the government relaxed their arbitrary interest limits, maybe then these shady loansharks could be dealt with inside the confines of the law!
But again, you are arguing for government to maintain a system of coercion for contract enforcement. For those who argue that more government is always bad, regardless of the level of government that exists, then the loan shark operates effectively like there is no government. He has no other mechanism for enforcing a contract except the threat of force.
As for the issue of meddling state and local governments in the early republic, one can usually move to another city or state without damage to the country. Not so with federal mandates.
Agreed, and it is a strong argument for federalism (along with the minor point that the U.S. Constitution mandates federalism). My argument was with the myth of a libertarian early America. Compared to today, yes. But state governments were quite prepared to engage in all sorts of economic intervention in the public interest, or at least in the interest of those with money and influence.
And obviously the opportunity cost for any make-work law is that money is spent on people who are doing work valued at $0 for most people instead of being spent on services that people actually value.
What you are leaving out of the equation is that the person whose work is valued at $0, if he isn’t working, is going to be a drain on government services. So the question is whether the cost of a make-work exceeds the cost of taking care of someone who can’t otherwise find a job.
Conversely, without government, the loan shark’s customers have no recourse if the loan shark violates the terms of the contract by demanding more in interest and fees than originally agreed. We need some government to be able to arbitrate disputes and do justice to those who are victimized (and by that I mean legitimate victims, those whose persons or property have been unjustly harmed by malice, recklessness or neglect). We also need standard weights and measures, so that everyone agrees what one unit of a product is.
More government leads to more power which leads to more government; it never leads to less government. The bigger government grows, the more corrupt the politicians become. The bigger government grows, the more inefficient government becomes. Government is meant to be small.
But cross the river into Washington, and gas prices go up. Bad taxes will trump bad regulation every time.
But to the heart of the argument – the head fake that the left makes is talking about the quantity of regulation, as if it’s some juice in a barrel. 0bama made a point of yammering that the financial problems are due to not enough regulation. No mention whatsoever of the content of the regulation. No hint that there’s smart regulation, dumb regulation, and dumber regulation.
In some cases, regulation can facilitate a more open market, by lowering barriers to entry. An example of that would be generic drugs. We buy the generics because we trust that someone (the FDA) is monitoring them, and making sure that they’re safe and effective. If not for the FDA, we’d have a small oligopoly of name-brand firms, charging several times the price, and the cost of entry into the industry of a new competitor would be prohibitive.
The other consideration is that often regulation and tort are two alternative mechanisms for accomplishing the same thing. Most businesses prefer the predictability of regulation to the capriciousness of juries. Tort law allows lawyers, judges, and juries, to in effect, write ex-post facto regulations. And in the process, major corporations have been run out of business. Regulatory compliance is often a defense in a tort suit.
So regulation is not an inherently bad thing, it’s what the regulations actually say, and who’s writing and enforcing them that really matters. The real danger is when an agency is taken over by true believers with a mission. Then we have problems. Like it or not, our best chance for reasonable regulation is a professional, non-political permanent bureaucracy who take their mission seriously and literally, and don’t try to use it as an ideological launchpad.
Those who don’t understand Libertarianism often ignore the base concept of free markets – Incentive. If somebody has a crap job due to no job skills, and no welfare safety net, they have INCENTIVE to improve their situation. The government, and thus the taxpayer bears zero responsibility to care for this individual or pay him a “living” wage. If he is paid what he is worth, he has incentive to be worth more money. This country flourished without welfare and minimum wage laws and “make work” projects for 200 years. Those who wanted, by their own choosing, to help the poor or unfortunate in life did so, those who didn’t, gave those individuals INCENTIVE to find a way to take care of themselves. They couldn’t turn to crime, as a large percentage of the population was armed, and penalties for committing crimes were severe.
“Businesses don’t set prices based on costs”
Yeah, business costs have NOTHING to do with setting price. It costs me say 5 dollars to produce a good, but I can sell it for 3? What are you stupid? Yes, supply and demand are a factor, but it is still impossible for a business to survive by selling their good at a price below its cost to produce.
“I hope that you don’t wonder why the Libertarian Party hasn’t taken over the country yet.”
I don’t wonder at all. People are no longer interested in being responsible for their own lives. They rather suck of the work/life of others. The statists have convinced the populous that they don’t have to work to survive. And you just help them. Stop stealing from me and earn a living yourself. If I want to help someone, I am more than capable of voluntarily donating money. I don’t need to be forced at the point of a gun to do it.
Anyone that believes in more government than is necessary to protect the individual rights of life, liberty and property is a thief and worse than a mugger. At least the mugger isn’t pretending to be doing good when he puts a gun to your head and demands your money/life.
“So does about 90% of the rest of the country.”
So if 90% of the country thought we should kill all cripples, it would be OK? Just because the majority thinks something, doesn’t make it right. But obviously you do think the mob rules.
“Businesses don’t set prices based on costs”
Yeah, business costs have NOTHING to do with setting price. It costs me say 5 dollars to produce a good, but I can sell it for 3? What are you stupid? Yes, supply and demand are a factor, but it is still impossible for a business to survive by selling their good at a price below its cost to produce.
As I pointed out. But yes, business costs have nothing to do with setting of prices, except to the extent that if the costs are too high, the business may not make sense. I manufacture telescope accessories. I set prices based on market demand. True, if the price of acetal quadrupled, I might stop manufacturing some of these products. But right now, I’m looking at an alternate design using aluminum tubing instead of acetal rods, partly because it will lower cost of goods sold, and reduce labor costs. But when I am done with that engineering effort, I will not lower prices just because I figured out how to make a better product at a lower price.
“I hope that you don’t wonder why the Libertarian Party hasn’t taken over the country yet.”
I don’t wonder at all. People are no longer interested in being responsible for their own lives. They rather suck of the work/life of others.
You don’t suppose that there might be more than one reason? I agree that there are people who fit the description that you provide. But there are a lot of other reasons as well.
The statists have convinced the populous that they don’t have to work to survive. And you just help them. Stop stealing from me and earn a living yourself.
I would be very surprised if you pay more income taxes than I do. VERY surprised.
“So does about 90% of the rest of the country.”
So if 90% of the country thought we should kill all cripples, it would be OK? Just because the majority thinks something, doesn’t make it right. But obviously you do think the mob rules.
I hope that this isn’t a surprise to you, but if 90% of the country thinks that the government should do something, it is rather difficult for the other 10% to stop it (unless that 10% includes judges). I mean, you could have an armed revolution, but I’m guessing that the results wouldn’t be very successful if you only have 10% of the population on your side.
If somebody has a crap job due to no job skills, and no welfare safety net, they have INCENTIVE to improve their situation.
They may have incentive, but nothing else. Some people are born with fundamental deficiencies that prevent them from advancing (mental retardation, certain learning disabilities, and for a few, a predisposition to mental illness).
Some people are born with a full deck of cards, but grow up in abusive or neglectful homes, which impairs their ability to use that incentive. I knew a woman many years ago who, starting at age 8, was repeatedly violently raped by her father. As you might expect, this impaired her ability to move up in the world.
Some people end up in abominably bad communities, where violence, degradation, and bad schools encourage destructive behaviors and limited horizons. There are people that come out of those communities made stronger by the experience (“That which does not kill me makes me stronger”), but those are remarkable success stories.
“You don’t suppose that there might be more than one reason? I agree that there are people who fit the description that you provide. But there are a lot of other reasons as well.”
The only arguments against the libertarian philosophy come from those that think it is OK to use force to accomplish their desires.
“I hope that this isn’t a surprise to you, but if 90% of the country thinks that the government should do something, it is rather difficult for the other 10% to stop it (unless that 10% includes judges).”
So you don’t believe in the Constitution? It explicitly denies to “right” of the majority over the minority. You obviously believe in the concept of might makes right. I weep for our world because people like you exist.
“You don’t suppose that there might be more than one reason? I agree that there are people who fit the description that you provide. But there are a lot of other reasons as well.”
The only arguments against the libertarian philosophy come from those that think it is OK to use force to accomplish their desires.
The only arguments? You must not get out much.
“I hope that this isn’t a surprise to you, but if 90% of the country thinks that the government should do something, it is rather difficult for the other 10% to stop it (unless that 10% includes judges).”
So you don’t believe in the Constitution? It explicitly denies to “right” of the majority over the minority. You obviously believe in the concept of might makes right. I weep for our world because people like you exist.
No. I recognize that if 90% want something, only bloodshed will prevent it. And the Constitution’s guarantees of minority rights are a bit more limited than you seem to think. There are specific protections written into the Constitution, the Bill of Rights, and some later amendments. But it is hardly a generalized guarantee of minority rights in all areas.
If we did not have open borders, minimum wage would not be necessary as wages would be set by the natural supply of labor. Since we have open borders to masses of third world immigrants who work at home for five cents a day, we need minimum wages. Violate one part of freedom (protect the country from invaders) and you ended up with unfree reactions to fix it.
Libertarians are for open borders…but they want no action to handle the mess this causes Americans.
The author sets up a poorly designed strawman (I hope he doesn’t engineer critical software, just gaming software.)
The libertarian would ask “what actions do I need to take to better myself and have the resources to raise a family, and support the community of my choice?”
I’m sure getting high, dropping out of school, and knocking up the girlfriend are not conducive to moving beyond pumping gas for beer money.
Giving the gasoline pumper just enough more to live on is enough to enslave that individual to that life.
More specifically, poor Catholic immigrants – and protestant America didn’t want them taught in church schools.
“I suggest tha the author read F..A. Hayek, L. von Mises, Milton Friedman and other libertarian poli-economic philosophers.”
“I’ve actually read quite a bit by all of these writers, and greatly respect them. But the real world is sometimes a bit more complex than beautiful theories.”
These are hardly “beautiful theories”. They are based on historical fact, historical events. If you have read Hayek, you will know that “The Road to Serfdom” was written in 1944, and was the first to clearly iterate that there was no significant difference between the tyranny of Nazi Germany or Stalinist Russia. Neither was right and neither was left. They were simply murderous dictatorships with central economic control as the foundation of each one (and, of course they were both “socialist”). If you have read all of them, you know that they did recognize that people could be given government assistance if and only if they were unable to help themselves, and there was no other source of assistance. That assistance should be in a form of helping them to help themselves, not a never ending dole for those who get enough out of the government that they refuse to work. At any rate Hayek, von Mises and others looked at all economic systems. They were well aware of the complexities of the world and were able to explain their position that individual freedom to sink or swim with minimum government interference brings more prosperity than any other system ever has, provided it is under the Rule of Law. As far as your “beautiful theory” that big government can lead to small government, there is no historical instance of that happening to my knowledge. Perhaps you can provide some examples where it was successful. As for me, I will be watching the unemployment statistics following the increase in the minimum wage, the higher taxes on business implemented by the Marxist in Chief and his Congressional cronies through many legislative acts, and we will see how big government will downsize to control it all. In the meantime if/when the Obama DeathCare legislation is passed, I will be waiting for that call to get my first and probably last 5 year “consultation (see section 1233 of the House Act)”, so I can be told that I should commit suicide and the sooner the better – for the “greater good” of course.
Clayton,
You have contradicted yourself. You say products of labor have their prices set by supply and demand. But you the argue that the labor price is not set by supply and demand. The labor market is fundamentally no different than any other market, supply and demand determine prices. Make up you mind, how are prices set?
There are no contradictions. When you come across a contradiction, go back to your premises.