raison d etre of government and its intervention
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Raison d ‘Etre of Government
and its Intervention
Paper #1 presented at Dr. Alvin Ang’s
graduate class on Public Finance
Ateneo de Manila University, Quezon City
28 January 2015
Economic
Freedom
Network
Asia
Bienvenido “Nonoy” Oplas Jr.
Minimal Government Thinkers, Inc.
• This subject is contained as
Chapter 4 of my 2nd book, an e-
book, published by the Friedrich
Naumann Foundation for
Freedom (FNF) Philippine Office,
2014, http://fnf.org.ph/epub/
• Raison d’etre = reason for
existence.
• Should governments and their
public spending become so big
to subsidize many things and in
the process, is big and coercive
enough to take away many
things from the people?
• Let point A be anarchy, zero
authority and government, and
point E be socialism/
communism, government owns
and provides almost everything,
and takes away almost
everything.
• Should governments provide
only services B or C, or expand
to services D and E?
• What/where is the raison d’etre
of government?
Chart from James Buchanan’s book, “The Calculus of
Consent” (1962).
“The man of system…is apt to be very wise
in his own conceit; and is often so
enamoured with the supposed beauty of his
own ideal plan of government, that he cannot
suffer the smallest deviation from any part of
it… He seems to imagine that he can arrange
the different members of a great society with
as much ease as the hand arranges the
different pieces upon a chess-board. He does
not consider that in the great chess-board of
human society, every single piece has a
principle of motion of its own, altogether
different from that which the legislature might
choose to impress upon it.”
-- TMS (1759), Part VI, Section II, Chapter II.
Adam Smith on the evil of central planning and BIG government:
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.” -- TWN, Book I Chapter II “In the midst of all the exactions of government, capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their universal, continual, and uninterrupted effort to better their own condition. It is this effort, protected by law and allowed by liberty to exert itself....“
“Every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it…. he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” –TWN (1776), Book IV Chapter II
The whole, or almost the whole public revenue, is in most countries
employed in maintaining unproductive hands... Such people, as they
themselves produce nothing, are all maintained by the produce of other
men's labour... Those unproductive hands, who should be maintained by a
part only of the spare revenue of the people, may consume so great a
share of their whole revenue… all the frugality and good conduct of
individuals may not be able to compensate the waste and degradation of
produce occasioned by this violent and forced encroachment.
-- TWN, Book II, Chapter III
It is the highest impertinence and presumption,
therefore, in kings and ministers, to pretend to
watch over the economy of private people, and to
restrain their expense... They are themselves
always, and without any exception, the greatest
spendthrifts in the society. Let them look well after
their own expense, and they may safely trust
private people with theirs. If their own
extravagance does not ruin the state, that of their
subjects never will. -- TWN, Book II, Chapter III
The wastes of BIG governments
First row: G. Washington, Tacitus, Einstein. Second row: P.J. O'Rourke, Doug Casey, Ludwig von Mises. Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master. – George Washington The more numerous the laws, the more corrupt the society. - Tacitus "Never do anything against conscience even if the State demands it." – Albert Einstein
A little government and a little luck are necessary in life, but only a fool trusts either of them. -- P. J. O'Rourke. Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.- Doug Casey
"The characteristic feature of modern capitalism
is mass production of goods destined for
consumption by the masses. The result is a
tendency towards a continuous improvement in
the average standard of living, a progressing
enrichment of the many. Capitalism
deproletarianizes the 'common man' and
elevates him to the rank of a 'bourgeois'.
"On the market of a capitalistic society the common man is the sovereign
consumer whose buying or abstention from buying ultimately determines
what should be produced and in what quantity and quality...
Wealth can be acquired only by serving the consumers. The capitalists
lose their funds as soon as they fail to invest them in those lines in which
they satisfy best the demands of the public.”
Capitalism, not statism, creates value,
wealth and welfare in society.
T. Hobbes In the beginning, there was no state, no law, nothing is right or wrong. Everyone is free to do as he pleases. Life was nasty, short and brutish. Civilization was not possible in this “state of nature.” Submission to authority, have laws, will result in a life better than that J.Locke: Contract between people and government, latter should protect the life and property of citizens. Failure to do so is breach of contract. Sovereign people have the right to rebel against abusive "servant.” Jean Jacques Rousseau People are "forced to be free”, but also concerned that individual freedom can be incompatible with rising authority of the state.
Why was government invented? The “ocial contract" theoreticians,, from left: : Thomas Hobbes, John Locke, Jean Jacques Rousseau.
Now the worst part of the punishment is that
he who refuses to rule is liable to be ruled
by one who is worse than himself. And the
fear of this, as I conceive, induces the good
to take office, not because they would, but
because they cannot help --not under the
idea that they are going to have any benefit
or enjoyment themselves, but as a
necessity, and because they are not able to
commit the task of ruling to any one who is
better than themselves, or indeed as
good."
-- Socrates - Glaucon, Book 1, The Republic
(~ 380 BC)
The danger of government and rulers
How big or how limited Government should be?
“We want a society where
people are free to make
choices, to make mistakes, to
be generous and
compassionate. This is what
we mean by a moral society;
not a society where the state is
responsible for everything, and
no one is responsible for the
state.”
“I came to office with one deliberate intent: to change Britain from a
dependent to a self-reliant society -- from a give-it-to-me, to a do-it-
yourself nation. A get-up-and-go, instead of a sit-back-and-wait-for-
it Britain.” (February 1984)
A liberating, not nanny state
To help the poor, government
should NOT do many things to the
people -- do not impose many
prohibitions and regulations,
licenses and permits, taxes and
bureaucracies.
Government should focus on its
main function, enforce the rule of
law, apply certain laws equally to
all. Thieves in government is one
clear example of government
failure. Government cannot
effectively catch thieves outside if
the thieves are already inside the
institution.
Populism and
Welfarism:
Promise (above) vs
Reality (below)
"Every time the
government attempts to
handle our affairs, it costs
more and the results are
worse than if we had
handled them ourselves."
-- Benjamin Constant
(1767-1830), Swiss-born
French politician
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