I. Socialism and Central Planning
When government ownership or control extends to the entire productive system, then the economic system is called socialism. Socialism, in short, is the violent abolition of the market, the compulsory monopolization of the entire productive sphere by the State. There are two and only two ways that any economy can be organized. One is by freedom and voluntary choice—the way of the market. The other is by force and dictation—the way of the State.
Many policies are supposedly justified because they would “take from the rich and give to the poor.” While that fits with the view that theft “for a good purpose” makes one a philanthropist, from the perspective of self-ownership, it is an assertion that the majority’s might makes their coercion right.
While I was out for lunch, I decided to get a haircut and renew the tag for my vehicle.
So I got all my paperwork together and pulled around the rear-facing Lee County Satellite Department of Haircutting and Styling Annex, Building 32.b.5 and carefully zigzagged through the tightly packed and confusingly arranged parking lot.
I glanced through all of the signs posted out front about cell phone use (prohibited), accepted forms of payment, new charges for people with various hair colors, new forms required for different haircuts, etc.
Mises Daily Monday by Matt Palumbo:
Economists long ago disproved the idea that if the rich get a bigger slice of pie, everyone else’s slice must be getting smaller. In fact, the data continues to show that inequality and growth are not at odds.
60 Minutes did a segment on David Rubinstein, one of the founders of Carlyle Group which was established in 1987. Carlyle is one of the largest private equity firm and the only major private equity firm to be based in Washington DC. The company controls enormous assets all over the globe and is noteworthy for being connected to many influential political figures including George H. W. Bush, James Baker, John Major, and Frank Carlucci.
I am regularly asked what can be done to solve the problem of “urban blight” in places like Detroit. The question is usually asked with exhausted desperation and a shrug, as if there are no possible answers. The cause of this “blight” is the root of the problem, and when ignited by police brutality, sets off riots in cities like Ferguson and Baltimore. There are a whole range of answers that we know will work to at least improve the situation.
9. Binary Intervention: Government Expenditures
A. The “Productive Contribution” of Government Spending
Government expenditures52 are a coerced transfer of resources from private producers to the uses preferred by government officials. It is customary to classify government spending into two categories: resource-using, and transfer.
B. Subsidies and Transfer Payments
Let us delve a little further into the typology of government spending. Transfer spending or subsidies distort the market by coercively penalizing the efficient for the benefit of the inefficient. (And it does so even if the firm or individual is efficient without a subsidy, for its activities are then being encouraged beyond their most economic point.) Subsidies prolong the life of inefficient firms and prevent the flexibility of the market from fully satisfying consumer wants.
C. Resource-Using Activities
Let us now return to the resource-using activities of government, where the State professes to be providing a service of some sort to the public. Government “service” may be either furnished free or sold at a price to users. “Free” services are particularly characteristic of government. Police and military protection, firefighting, education, parks, some water supply come to mind as examples. The first point to note, of course, is that these services are not and cannot be truly free.
