You hardly have room to be calling anyone’s arguments bizarre. In the first place, “wealth” generally refers to the value of one’s holdings, not to the holdings themselves. In other words, a person’s car may be a part of his wealth, but virtually nobody would say his car is wealth. Same with his house or his boat or his furniture. So for that reason, no, Mr. Artist does not contend that pipelines and wires are wealth. Nor does he agree that highways and dams are wealth. In combination with other assets these items constitute wealth, but they aren’t wealth on their own according to any normal and logical use of the term.
But be that as it may, you’re missing the point entirely, which is that government doesn’t generate money (or ‘funds’, as you put it) on its own. The money it uses to build highways and dams and everything else it pays for has been taken from people who earned it originally in the free market. I don’t believe for a minute you don’t know this. Further, when a Pepsico employee buys an iPhone, he’s making the decision to part with his money voluntarily in order to receive a specific item which he feels is worth the trade-off. It’s a voluntary transfer of money in which both parties feel the exchange is worthwhile. The money the government takes in is a transfer made under pain of law, in which the payor has no control over what it buys or how it’s spent. He makes his transfer primarily in order to stay out of jail, and as such it’s an involuntary transfer. So while it’s true that in both cases money gets transferred, the similarity pretty much ends there.
And of course the fact that in both cases money gets transferred is completely beside the point and meaningless. Free enterprise creates wealth and grows the economy. Government regulates free enterprise and takes from it’s participants the funds it needs to finance its expenditures. This is unquestionable. I can’t imagine why you seem think you’re going to accomplish some sort of point by trying to refute it.
I’m not going to answer your post point by point. Every single point you make is either wrong or irrelevant.
For one thing, you define wealth as individually-owned wealth and then delight in the tautology that government-owned wealth is, by definition, not wealth. Moreover you take pleasure that the government extracts its income at gunpoint, while Madoff’s investors relinquished their wealth voluntarily. Even if valid, this would be completely irrelevant.
I’ll leave you with one very simple question. Consider it objectively and learn. Or prattle about the eevul gummint stealing from you at gunpoint and remain ignorant.
Did it grow the economy (and lead to continued growth) when government built the Golden Grate Bridge? How about the Panama Canal?
How about the Bridge to Nowhere, or airports where almost no planes land, or bases the military doesn’t want or need, or benefits that encourage people not to work?
Unlike Starving Artist I haven’t disputed that the government does create wealth. I just think it gets far less bang for the buck than your average private citizen just making everyday decisions. That’s because a citizen a) buys what they need or want, whereas government buys what will do officeholders the most political good, and b) citizens have limited resources and know it, whereas government doesn’t consider financial realities unless the deficit gets out of control.
Milton Friedman observed that there are four ways to spend money:
Money you made, spending on yourself
Money you made, spending on someone else
Money that you got from someone else, spending it on yourself
Money that you got from someone else, spending it on someone else
The first case is where you will tend to spend the most wisely. Even if you’re not good with money, you’re going to spend your own money on something you know you want or need. The last case is where you will have the least concern for your spending. It’s not your money, and someone else is getting the benefit.
Consider prison labor, where the government puts inmates to work on, say, a farm; does that count as creating wealth? Wiki says that federal prisoners are currently producing everything from furniture to clothing to electronics; it’s worked down in the mines, it’s worked out in lumber yards; is that industry?
Slave labor is definitely industry. It fed our country for quite some time, actually. It’s not the most efficient industry around though. Incentives matter. They explain nearly everything in economics. A person working to better themselves will be a far better worker than someone with no stake. Do you think many slaves offered suggestions on how to produce more? I’m sure some did, but not many, for obvious reasons. We also didn’t see that much in the Soviet Union. When a worker did do something like that and increased his productivity by triple, he became such a sensation that the Soviet press tried to make a positive example of him and the idea of innovating more efficient practices was even named after him. But not many are willing to drink the Kool-aid and work just to make the masters happy, which is why the Soviet press had to make a huge national story about something that happens in every half decent workplace every day in the free world.
It does create wealth, but mostly it redistributes, because the first rule of government allocation of taxpayer money is, “What’s in it for the people voting on how to spend it?”
It’s actually one of the few areas where democracy is bad. Our money is spent most efficiently when unelected bureaucrats are allocating it. Then at least it’s about where the government perceives need. When Congressmen have direct control, they just build in their districts, whether or not the district needs whatever is being built, or whether or not a nearby district might need it more.
It wouldn’t surprise me in the future to see all tax and spending decisions to end up in the Fed’s lap.
Interesting how you put words in my mouth, then criticize me for those very words. The moon landing – which I never mentioned – was a supreme achievement which I supported at the time. But not for economic reasons, which is what this thread is about. Space travel would have happened without the government, in due time, but not in time for the government’s irrational space race. But again, that isn’t what this thread is about.
Once again, you put words in my mouth, then criticize me for those words. First, I am not a libertarian anarchist, so please don’t criticize me as one. Second, fighting a war may be a totally proper activity of the government, and totally improper for private citizens . . . but not for economic reasons. Contrary to what some people think, war is not good for an economy, it’s a drain on it.
I really like the baseball analogy above. The players are private industry and the umps are the government. There is no reason to go see a game with out the players but the umps only matter if you care how exactly they follow the rules. The players are much more important.
The government doesn’t add to the economy it is just there to help it function more efficiently wether it is by building infrastructure to allow for ease of transit or by regulations such that the populace can have greater trust in what they are buying. Greater efficiency is a good and important thing but the economy would exist in much better shape without the government than without private industry.
I didn’t put words in your mouth. You wrote “Government creates very little wealth; all it mostly does is redistribute what has been created in the private sector.” I asked you — and you still haven’t answered — whether the highway system is “little.”
If you answer that “all it did” was redistribute money from taxpayers to road builders, explain how that differs fundamentally from a private company collecting money from gasoline sales and distributing it to well owners.
Eh, I don’t know. With no rules, there’s no guarantee I’m going to get to see a game of baseball and not the pitcher beaning the batters at every opportunity, followed by a fight that ends the game since there’s no-one there to get them to stop. I’m not getting baseball either way.
Actually the car itself is the wealth. A bushel of corn is wealth. The currency value of wealth is a different and sometimes problematic metric. Even without currency being invented. The tribe with 20 cows and 40 swords is wealthier than the tribe with 2 cows and 8 swords.
The private sector is what the government allows it to be. All the “private sector does this” and “private sector does that” depends a great deal on whether or not you’re in the US, France, Mexico, 1960’s USSR or Cuba.
You can have all the shale oil in the world, but if the government doesn’t let you tap it, it’s just a bunch of oily rocks. You can have the greatest idea for a website, but if you live in Cuba, you may not have the opportunity to create it. You can build an efficient factory, but if your Mexican workers can’t get to work without being killed by drug cartels, you’re shut down before you open.
That’s true, but it is sort of beside the point. The government can actively support and regulate, or oppose and suppress, the private sector, but it is always acting for or against something that comes before it.
You can have private sector economic activity without a government, or even against the government’s will. That is why the USSR had such a large black market. It doesn’t always work as well as it would a regulated free market, but it can and does exist. You can’t really have much of a government unless there is a private sector to supply the money for the government to use.
Production precedes predation. There can’t be a government taking from producers without there being producers. The “private” sector is indispensable to government. The fact that government has monopolized essential services like transportation does not change this basic truth.
Moreover you take pleasure that the government extracts its income at gunpoint, while Madoff’s investors relinquished their wealth voluntarily. Even if valid, this would be completely irrelevant.