May 7, 2009
-- by Dave Johnson
This post originally appeared at Speak Out California.
Watch this great video:
The video is funny, but it makes a point: We need government. Republicans say "government is the problem" but just who is government a problem for? If you are a top executive in a large chemical corporation and your bonus depends on lowering the cost of discarding toxic wastes, government stands between you and the river into which you want to dump the wastes. It costs the company less to dump the waste into the river, you will get your bonus, but We, the People don't want that stuff in our water. So for you, government is the problem. And that is a good thing. But our government is us. Our government protects us.
Government also empowers us. In the 1950s President Eisenhower proposed building the interstate highway system. That was an example of government spending, and the top tax rate was over 90% on income above a certain amount, so after executives and owners of big companies made several hundred thousand dollars additional income was taxed at a very high rate. (They could still become very, very wealthy, but more slowly.) This meant that the major beneficiaries of our government helped pay for our government. And it paid off. The interstate highway system triggered a surge of economic growth, new industries, new products -- and even greater income for the very people who were taxed to help pay for it.
Of course, at the time, some (not all) of the wealthiest objected to being taxed, even though the taxes led to even greater gains for them as well. They were shortsighted and considered government to be a problem. Lucky for all of us, even for them, it didn't turn out that way.
P.S. They're serious about hating government, and they really do hold up Somalia as an example of what they want! Go see for yourself at the libertarian Mises Institute, which "defends the market economy, private property, sound money, and peaceful international relations, while opposing government intervention as economically and socially destructive" where they write in Stateless in Somalia, and Loving It,
Somalia has done very well for itself in the 15 years since its government was eliminated. The future of peace and prosperity there depends in part on keeping one from forming.And see for yourself at the libertarian Reason Magazine, "the monthly print magazine of "free minds and free markets," where they write about The Anarchy Advantage in Somalia.
I guess if Cholera and lawlessness don't bother you, maybe you don't need government. The rest of us, however,...
Click through to Speak Out California and leave a comment.
Posted by Dave Johnson at May 7, 2009 11:03 AM
I think you may have a misunderstanding of conservative values. Republicans and even libertarians consider government a necessity, just as liberals do. We differ in opinion on how the power of government should be distributed (whether it should culminate at the federal level or the state level) and the extent to which the government should regulate our country.
I also believe you have made a few unwarranted assumptions in referencing Eisenhower's tax policy to suggest higher taxes would have the same effect today. In Eisenhower's day, the world had hardly begun to take steps toward globalization, relative to today. After WWII, the US was leaps and bounds ahead of other developed nations and we weren't competing with any of the countries we compete with now. Substantial tax increases would cause our country to be less competitive in the global market of our era. There would be an exodus of businesses to countries where the tax burdens are smaller. The same goes for executive salary capping. If we place low caps on salaries, the best executives will leave the country to work for companies in other countries. In the US, we'd be left with the mediocre leftovers.
Posted by: Terminum at May 7, 2009 4:46 PM
Why people think that a dysfunctional group like Congress has the ability to minutely control everything is beyond me--the only expertise they have is the distribution of pork. Historically you will be hard pressed to find any type of sustained period when this has worked.
What people like yourself never seem to understand is that this benevolent government is only to your liking when your team is in charge. Progressives found out that all the centralized power was not all that cool, when the government was headed by George Bush.
That is the reason why those truly committed to collectivism and big government, such as Stalin and Mao, realize it is necessary to dispense with the problem of democracy.
Posted by: Becky C. at May 8, 2009 10:00 AM
It's a bit silly to compare Somalia with the United States, declaring "ah-ha!" the U.S. centralized, all-powerful government is clearly superior! It might be a bit more useful to compare Somalia to neighboring countries and even that will be highly problematic. For now all there is to go off of are some statistics with an admittedly small sample size. Conclusions at this point, one way or the other, will highlight bias - either in favor of anarchy at the Mises Institute or in favor of central government here.
Your post is riddled with such bias, for example your contention that the rich are the major beneficiaries of our government and therefore should shoulder the greatest tax burden.
Let's work out the implications of such a statement:
The rich are the greatest beneficiaries of our government.
Well you can't be asserting that the reason these people are rich is due to government assistance. That would be asserting that our governmnet engages in Fascism (which they do, but that's not your point).
You believe that govenment provides the "stability" and "protection" needed for corporations to thrive. This view is in stark contrast with most liberal revisionist historians. I wonder if you have ever read Thomas Zinn, Gore Vidal, or Peter Novick, all of whom would find your belief that government provides an environment of stability and protection, enabling the function of capital markets, quite amusing.
The reality is that the government attempts to plan and micromanage every aspect of the economy, enabling certain individuals, those who provide patronage to government officials, the opportunity to amass vast fortunes on the backs of wage earners and small business owners (traditional free market entrepreneurs.)
What proof do I and the other revisionist historians have to make such a claim?
1. The Federal Reserve centrally manages the price of money (the interest rate) by increasing or decreasing the supply of dollars. (Almost always increasing the supply.) The Cantillon Effect of money creation means that the people that get to use the money first - the politically connected, the banking class, the government, defense contractors, Wall Street - benefit, while poor schmucks like us see our savings eroded and higher prices as the money steps through the economy. Wages rise last, after consumption (goods must be sold before entrepreneurs can determine demand), forcing us into a race against the inflationary policies of central banking. Our central bank, the Fed, is a government granted monopoly.
2. Every monopoly or cartel that has ever existed has done so with the assistance, either direct or indirect, of the government.
3. We have government monopolies and cartels dominating the banking, investement banking, housing, and energy sector - and these are the least stable and secure areas of our life. These monopolies and cartels cause instability by distorting the relationship of supply and demand. These are axioms of economics, not theories, provable in all walks of life.
4. The government has a monopoly on the use of force and the creation of law. To view it as some benelovent overlord corrupted by outside forces of greed is to ignore its power, while at the same time giving it credit when it uses said power wisely. The contradiction should be evident.
5. Markets, money, and social contracts did not come about through government decree. In every case, particularly money creation and contract law, the government forced its inferior solutions on the people, driving out superior alternatives. I recommend Professor Hulsmann's The Ethics of Money Production for an excellent review of the history of money. (Free pdf available - google the title.)
I'll stop there since that is a lot to consider.
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